Speech by The Hon Scott Morrison MP

Address to the Australian Childcare Alliance QLD National Conference, Brisbane


Can I acknowledge the traditional owners and any elders past and present in coming to the address here today. It is a great thrill to be here. There are so many of you here today. Gwynn thanks very much for the invitation. It has been a busy week which has taken me from one end of the country to the other and I bumped into some people in Perth who said they were coming along to this event. It is wonderful to see the industry coming together in such strong numbers. It demonstrates the vibrancy and passion which I have come to observe first-hand all around the country when it comes to early childhood education and child care.

I have something in common with you – I love my job. You love your job, I love the job I have to do on behalf of the Australian people. It is an exciting job. It is quite different to some of the jobs I have had in the past. I didn’t speak to many conferences in the past which involved young children performing. In previous jobs I didn’t do the ‘Wombat Wobble’ or read stories or chase chickens around backyards or those sorts of things. You get to do that every day. I only get to do it once a week!

It is an enormously exciting sector to be in and it is a growing sector to be in. It is a sector that has an enormous sense of the importance of what it is doing in the lives of young children and frankly in the broader life of the nation. It is often clich? children are the future but these clich?s start from a point of truth often and that is a truth. That is what brings us all together around the issues we are so focused on from a public policy point of view but in our day to day dealings.

It has been a busy time of reform for this sector and it has been a long time coming. Child care and early childhood education has been on the agenda for a very long time. As a young boy myself I went to one of the first centres in New South Wales which were experimenting in this area in the 70s. We came from a fairly modest family and we had the opportunity to go along to that centre in New South Wales. Jenny and I made sure that our kids also had the opportunity to get out and experience early childhood education as well because we believe it is important that, in our case, it didn’t involve receiving subsidies or anything like that but nevertheless if you believe in it as a parent then you make it a priority to ensure that your children have the opportunity to have the best possible start in life. There are responsibilities of parents, of governments and others working in the sector to try and provide for these opportunities. What we have been working on for the last couple of years is to achieve a once in a generation reform to the child care and early childhood learning sector. A once in a generation set of reforms which I have been so pleased to have the strong support and participation of Gwynn Bridge. Gwynn has been an outstanding leader in coming and representing the sector’s views very forcibly on occasion privately in my office and you should feel very encouraged by the work Gwynn does in representing the broad interests of this sector. Working with others in the sector as well our process has been to be as consultative and participative as we possibly can. It began with the Productivity Commission report and that was a very good, positive process. It brought together and was able to identify a series of shared learnings about what had been going on in the sector and what were some of the issues that really did need to be addressed. My predecessor Sussan Ley who is now doing a great job as Health Minister really did lead and drive that process to ensure that when I became Minister in December last year we were on a very strong footing to be able to go forward in developing the response to the Productivity Commission report which we have done in partnership with the sector, with families, with all of those involved over the last six months.

We were very pleased to be in a position in this last Budget to announce a $3.5 billion increase in funding for child care and early childhood learning through a reform system. In addition to that, to be able to continue the Commonwealth’s commitment to Universal Access to preschool education on top of that which was over $800 million. As you know this is a budget environment where increasing spending on particular things is not an easy thing to do. In fact it is a very difficult thing to be able to ensure increased investment in areas of public service at the moment, particularly because of the fiscal situation we find ourselves in. But you should take the vote of confidence of that increased investment in acknowledgment of the important role of early childhood education and child care in the life of our country and importantly the life of the children.

The new package – the Jobs for Families package invests some $40 billion over the next four years. It is the single largest investment in early childhood education and child care this country has ever seen. The single largest investment. This followed clear indications from the Australian community that the government needed to prioritise assistance to increase labour force participation – getting people into jobs – and I know this is something the ACA strongly welcomed.

We know families want accessible, flexible, affordable and I underline quality child care and service providers want to spend more time educating children, not tied up in red tape. Under our reforms, informed by the Productivity Commission report but also our direct consultations, it will be more affordable for middle to low income parents to get the child care and early childhood learning they need to hold down a job and give their children the best opportunities and best start in life.

One of the things I am very pleased about what we have been able to put together under the Jobs for Families package is that we are investing considerably more. When the scheme comes in 2017/18 we will be spending around $10 billion. This is a significant investment in the future of our young people. But we are focusing it in a way that benefits those who need it most. We are focusing it on low to middle income families. Those on higher incomes will continue to get the same level of support they have been getting over the years and the reason we have maintained it at that level is because we don’t want to see a falling away in labour force participation for those who are getting that support. Where we wanted to change the game, where we wanted to provide the opportunity for a choice that many low and middle income families don’t have at the moment that is where we wanted to target the investment. That is the advice that we received from you as well – to deal with families that struggle with these issues every single day. That is why we have ensured with the introduction of the new single child care subsidy, the centrepiece of the package, that it will focus on those on low and middle incomes in terms of the increased assistance provided.

Currently families earning less than $65,000 effectively receive around 74% of child care fees through the Child Care Benefit and the Child Care Rebate, under the government’s new package this subsidy will increase to 85%. A family on $85,000 which receives approximately 70% currently will receive approximately 78% up to the value of fee cap while a family on $120,000 receives about 60% currently and will receive around 67% up to the value of the fee cap.

This is also a simpler system. If there was one thing that was screamed at us from the sector and families alike it was ‘for goodness sake make this simpler, it is far too complicated’. We are not only going to do that by collapsing the subsidies into one single subsidy for the mainstream support but we will be looking and investing in some $200 million or thereabouts in new technologies and new systems that will make the system more seamless for parents, more seamless for providers and more efficient for government to ensure we can focus resources that we have in this area on those that need it the most.

The Subsidy is also underpinned by a new activity test. Now I know that has been the topic of some discussion. We believe that there needs to be, for those on lower incomes under $65,000, two days of early childhood education a week and that is what we are providing. Two can be in six hour blocks over two days which is the same amount of time that young children at school receive to get that education and over the next few years what I am looking forward to happening is the sector working with families and others to ensure that they are in a position to be able to deliver that support in that way. The sector is changing fast. In the last six months alone I have been in this portfolio I have seen changes in the sector. With new centres opening, new technologies they are using and new ways of working with their staff and their training and all of these things – and you will be talking about these things here over the next two days – this is a sector that can adapt, change and improve because its passion and capacity is as good as anything anywhere else in the country, if not better.

There are tiers that are part of the activity test. For eight hours of work a fortnight parents will be able to access up to 36 hours of subsidised care for their children – that is for those earning over $65,000. The activity test doesn’t just include work, there will be other activities included such as volunteering and looking for work I should stress. We are also keen to ensure that the way we assess work understands the difficulties that parents, particularly on lower incomes have in getting a continuity of work and ensuring there is a way of assessing this which means that we do not needlessly disrupt or indeed disrupt at all the early childhood learning of those children. So we are aware of that. One of the virtues of being in the social services portfolio is the Department of Social Services does have a very good understanding about the inconsistent nature of work patterns, particularly for those on lower incomes. They deal with it every day in a policy sense as the Department of Human Services deals with it every day as a matter of their normal practice.

So these are things we understand and that we know. That is why we are not rushing into this new system. Many have said ‘well why can’t you bring it forward?’ One of the things I have learnt in my political life and my more general experience is you never rush to failure. You get it right and then you implement it. Over the next couple of years we have the opportunity to get this right and to implement it properly. Great ideas are great ideas, politicians can announce them but frankly the true test of public policy is an idea implemented otherwise it is just a dream. We want to make sure these reforms actually come into place and we are going to need your help as we continue to work with you to ensure they get made.

One of the areas I am most proud about in the package is the Child Care Safety Net. As the Minister for Social Services I know very well the transformational impact that early childhood education can have on disadvantaged young Australians. It is an absolute circuit breaker. Nicola Forrest has spent a bit of time in my office educating me on the incredible transformation that happens with young Indigenous children with the ‘Challis model’ that is not only seeing young Indigenous kids going through the programme equal the performance of other children in primary school but exceed it. If we are going to have a once in a generation change in Indigenous communities then early childhood education is clearly a part of achieving that change. It does have the ability to break generational cycles of welfare dependence, generational cycles of aspirations never coming to be. So it is incredibly important from a social services policy perspective that we utilise early childhood education in order to break the downward spiral that we too often see with too many families and they become trapped not just themselves but they pass on that welfare dependency to their children as well.

We recognise that not all parents can work and that is why we have the safety net provisions in place. But in addition to that it will flow in the following forms – The most disadvantaged and vulnerable families will be able to receive extra support through the Additional Child Care Subsidy which replaces the Special Child Care Benefit and the Jobs Education and Training Child Care Fee Assistance programme. But it’s not a one to one replacement and will support families transitioning from income support to work and also low income families. In the Child Care Safety Net overall we will be spending around $840 million over the budget and forward estimates extra. So what was previously there and in budget based funding and special child care benefit and the JETCCFA subsidy – we are spending all of that and on top of that an extra $847 million or thereabouts in the additional programmes we are running.

We are introducing a Community Child Care Fund, a competitive grants programme for services to reduce barriers to access for child care. From July next year there will be $10 million a year programme to integrate child care, maternal and child health, and family support services in certain disadvantaged Indigenous communities. This was a recommendation of the Forrest Review into Indigenous Jobs and Training – Creating Parity. Approved services in other pockets of disadvantage will also be able to apply for the Fund’s grants to improve access for disadvantaged children. The Fund is not simply a replacement of existing programmes, it goes above and beyond. It is better targeted, more streamlined, and a more flexible way to achieve our goals, one which will promote innovative community driven solutions to help our more vulnerable families.

I understand there is concern about competitive grant rounds; I want to assure you that we will be providing assistance to providers to ensure that services are delivered in areas of need, particularly those areas being supported by budget based funded services. I want to stress however that we do need accountability in the use of taxpayer funds and centres need to adopt and maintain viable business models.

This whole sector is like a three-legged stool. The public sector, not for profit sector and private sector, particularly represented here today. We need all three and all three to be viable. If any one of them fails to perform or measure up then the system does not work as well as it could. I am always encouraged particularly by the role of the private sector in this industry which is sometimes derided. But one of the things I know and read the Productivity Commission report, deep back in the appendices, was a simple little research finding that said in the most disadvantaged areas of the country those providers with the lowest prices to disadvantaged families in those sectors were actually privately run child care operators. That said to me that there is no mortgage on virtue in this sector. It is a virtuous sector all the way across from the private to public sector. Everybody believes in providing a quality, affordable and accessible service. If you didn’t you would not be in the service in the first place, or you wouldn’t be working in the policy space which is trying to improve things in this area. So it is important to recognise the virtuous motive of all of those working to the right ends in this area.

A new Inclusion Support Programme will start on 1 July 2016, a year ahead of the new child care system, and it will assist services to develop and improve their capacity and capability to provide inclusive services for children with additional needs. There is a child care and early childhood centre in my electorate within the Sylvanvale Foundation. They have for many years been providing mainstream access for children with disabilities to be learning alongside children without disabilities. I have seen it for many years and when I saw this many years ago it was one of the things I was keen to be improved in the system right across the country. To see young people with disability learning alongside those who don’t completely normalises the situation for those young kids as you know as they grow up. They grew up with a very different understanding of those who have differences, of those who might struggle with other things they don’t struggle with and the inclusion support programme I see as pivotal on ensuring a fair go for young people with disability right from the get-go. Right from the start. That they get the opportunity to go to mainstream centres. Now that doesn’t mean we don’t still need to maintain our support for some very specialised services for children with disabilities but the Inclusion Support Programme is exactly about that. That is why we didn’t change the name because I thought the name was right.

On the rebate I am aware that this has not been increased since indexation was paused in 2011 under the former government. The former government amended the Family Assistance Law to maintain the limit at $7,500 per child for three years until 30 June 2014 and this has been extended out to the start of the new package. We don’t have plans to review the limit before we introduce the new scheme however, under the new Child Care Subsidy, there will be no annual cap for families earning less than around $185,000 per year. An annual cap of $10,000 per child will apply for families earning around $185,000 or more. This will support many more families than the current CCR cap. This was a very deliberate decision to make child care affordable for more families. I heard from families around the country – ‘I would take the extra few hours, I would take the extra day if I didn’t hit my head on the cap’. Now you would have heard that from your own families on a pretty regular basis, as often as I have. So we had to structure the programme to ensure that those not on exorbitant incomes but on middle and lower incomes would have the opportunity to take on more work and not have a disadvantage by taking on more work when it came to accessing child care. This is one of the most important parts of the changes we have introduced. It is a licence to work for families who want to work more. Because they need to work more in most cases. You probably heard me say on many occasions whether in the Parliament or elsewhere, I do not consider the support we give to the child care and early childhood learning sector as welfare. It is not. A welfare payment is a payment I make to a person or a family straight out. A child care subsidy is being paid to the service provider to reduce the cost of that service so that a family can access it. You don’t get it unless you are actually acquiring the service. So it is not a welfare payment. It is actually an enabling payment. It is a payment that is allowing families to work more and more and more families as we know need to work more through their own choice and have been denied those choices because of the way the system currently works.

I do want to thank people for their participation in the Regulatory Impact Statement (RIS) consultation that we are engaged in. Nearly 800 people have attended 18 sessions in person with a further 650 people registered to attend the remaining 20 sessions that we have. Over 3,000 people have looked at the RIS homepage. I am told those who attended the sessions have appreciated the opportunity of feedback. A few have provided feedback to me on twitter who thought it should be a bit better here or there but that is the nature of a consultation process and there are still sessions to go and I encourage you to get involved in that. The consultations this month involve meetings, forums and on-line input via email or survey.

We have heard very different views about temporary financial hardship around the country. Many services agree that allowing people to receive the additional subsidy for 13 weeks in these circumstances is a fair amount of time but many others consider this might be too restrictive. Farmers in drought affected areas or families that have a family member with a serious medical condition may need more flexibility for example.

At the same time, you want families and services to provide some evidence before accessing additional funding but you want us to be flexible about what that evidence might be.

There is also an acknowledgment on the need for simpler administration, particularly around the Subsidy and the Safety Net. There is a commendable desire to be accountable for the extra funding people receive with performance reporting to measure outcomes. Support for an alignment of provider approvals with national quality standards. More flexible operating hours that will suit services in regional and remote areas, making them more viable and helping them respond to their families and, one that resonates particularly with me is that you want to spend your time educating and caring for children and not filling in unnecessary paperwork.

Around Inclusion Support, I am really pleased to hear the sector is unanimous in its support for the increase in the Subsidy. We are hearing that the new programme should be flexible to deal not only with children who have diagnosed medical conditions, but also children with behavioural issues, and those who have not yet been diagnosed because there is a shortage of medical professionals – a key issue for regional and remote Australia.

I think there has been an enormous level of good faith in the discussions I have had with your sector leaders. There has been a lot of good faith as I have gone around and spoken with the sector directly as I meet with child care educators and workers around the country, spoken to families and seen the almost universal, I would go further to say universal appreciation, of the young ones. The smiles on their faces and the love and care that they are receiving all around the country is something we should all feel very proud about and you should particularly feel very proud about. We want to maintain that system but have to continue to do it in partnership. We have to do it in partnership as a government. We are currently providing about two-thirds of the child care bill in the country today. With the states and the territories there is a federation review process underway now which I think is going to have to draw them more to the table, particularly in New South Wales and Queensland. Other states such as South Australia I will note, are putting a very serious investment into early childhood education as is Western Australia. But in terms of the relativities of investment in preschool education in New South Wales and Queensland there is a lot of cost shifting going to the federal government and reliance on the child care subsidy system. There really needs to be a much stronger level of base support coming out of those states to ensure a broader, more universal access for that level of education.

The responsibility for education of young people in this country does rest with the states and territories. It is our responsibility as a Commonwealth Government to add value to that, to facilitate that, to ensure the other objectives and responsibilities we have at a federal level are being met. That is why in many elements of the package I have focused strongly on the issues of social services policy objectives of supporting young and disadvantaged families, to support those on lower and middle incomes, to facilitate more of those families into work. That is why there has been such a strong focus because that is the job I have as the Minister for Social Services. Early childhood education is an outstanding tool to change the fortunes and outcomes of those families in this country.

So we do need to continue to work together, we are pleased to have been able to provide the support we have. We have a long way to go before we get to July 2017. I wish you well for the next few days of your conference and look forward to seeing some of you at a child care and early childhood education centre around the country and suppose I will be chasing chickens again and reading stories and dancing or whatever you have in mind for the visit and I look forward to seeing you and the kids there.

Thank you very much.