Wage Justice for Early Childhood Education and Care Workers (Special Account) Bill 2024

The Prime Minister was the last one to speak to this bill, and I would like to address his remarks before I move on to mine. I want to reject his declaration of 10 years of neglect under the coalition in the early childhood education and care portfolio. I’d just remind Australians that he is all about spin and not about substance. The facts are that in that period the coalition took the childcare subsidy from $6.5 billion to around $11 billion a year. We locked in dedicated funding for preschools and kindergartens valued at about $2 billion, which is $500 million over four years. We increased early childhood education and care places by a remarkable 50 per cent over that decade, and this was outlined and highlighted in the recent Productivity Commission report. We increased four-year-olds’ enrolment in childhood education and care to a staggering 90 per cent, and, indeed, we increased women’s workforce participation, which is so very important for women across our nation. So the coalition are incredibly proud of the work that we did over the last decade in this sector.

Today we’re talking about wage increases for about 200,000 early childhood education and care workers. It is not often that I find myself agreeing with the sentiments of those opposite, but what both sides of the chamber can agree on is the incredible role that early childhood educators and teachers play in shaping the lives of our youngest Australians. The coalition values the work of early childhood educators. We understand that, without you, many families couldn’t return to work or to study. Unfortunately, not only are families living in areas with little to no access to early learning missing out on support to help them return to work but their children are missing out on the educational benefits of early learning, particularly in the year before school, which I highlighted before.

The coalition has many concerns, however, with this policy. There’s the impact on inflation, the administrative and financial burdens placed on small and medium businesses and the fact that this policy comes with a $3.6 billion price tag and delivers not one additional place for families, remembering that it is a taxpayer funded pay rise for the sector. But we won’t stand in the way of a pay rise for early childhood educators, and so the coalition will support this legislation today.

However, while we support higher wages for early childhood educators, it would be remiss of me not to call this policy out for what we believe it is, which is a pre-election sweetener—a sugar hit that Labor hope will win them votes ahead of the impending federal election next year. The proof of that is the absolute lack of detail following the announcement of $3.6 billion for those higher wages. The Prime Minister, with his education ministers and, of course, the unions in tow, made this announcement two months ago and then said that further details were to come. I would say that, if this were such a long-term plan of the government’s, as they claim it is, then why wouldn’t they have all the details sorted already, all the questions answered, before they used early learning as a political prop? That’s something that this Labor government really is so adept at doing.

This policy shows that the Albanese government is all about spin and not about substance, as we saw when the Prime Minister spoke to this bill before jumping on a plane and heading off overseas on his Airbus. It’s abundantly clear that this Labor government does not have a meaningful plan to restore the Australian way of life.
For over 12 months the early education sector has been going through the multi-employer bargaining process, and it has been the first to do so under this government’s legislation. Instead of waiting for their own process to be finalised, they bypassed the independent Fair Work Commission, all at the behest of their union masters. They’ve traded away billions of dollars for a cap on ECE fees that only lasts for 12 months. They won’t say how much the cap will be in the second year of the funding agreement. This is putting further financial pressure on small and medium-sized early childhood education providers, who have already watched their rents and their electricity, gas and food bills skyrocket under this government, like all other Australians around the country.

We know that over 11,000 small businesses across the country have become insolvent in the last 12 months. That is a higher number than ever before. It’s a record. It’s a record number of small businesses, in the last quarter—that’s families and that’s jobs—that have gone to the wall. This policy offers no real relief to families who can’t afford or can’t access early childhood education, remembering that $3.6 billion is a lot of money to spend and not deliver one new place for families, particularly for those in regional Australia. We have thin markets in childcare deserts all across the country, and I’ve visited a lot of them. I’ve spoken to families, with their children crying on their laps, who can’t go to work and can’t pay their bills in a cost-of-living crisis caused by this government.

I think all that will happen with this policy is that it will add to the pressures of the cost of living and of inflation, which will continue to stay higher than it should be and which has already spiralled out of control thanks to the economic mismanagement by the Albanese government. What this government absolutely fails to understand is that as inflation rises, things get more expensive. That’s what inflation does. It’s the thief in the night that takes away your savings and where you get less for your money. While educators may be thinking that they’re getting a pay rise this year and the next—firstly in December and then the following December—all that will happen is that more government spending will equal high inflation which will equal higher bills. Your pay rise, that extra $155 a week that the Prime Minister has promised you, will go straight into paying your higher electricity, gas, water, rent, mortgage—remember, there have been 12 mortgage increases under this government’s watch—and grocery bills, and this is under his watch.

The Prime Minister has failed Australians when it comes to this cost-of-living crisis, and they know it. You know it. You know the price of groceries and everything else that you are having to pay at the moment. So educators and the workforce in the ECE sector won’t necessarily feel better off because you probably won’t be at the end of the day. But the question is: why does the Labor government actually care about it? They are hoping that you will think about it long enough to vote for them at the next election. When that shine wears off, they’ll move onto the next announcement and the next policy that they can play politics with—the next new shiny thing.

Don’t take my word for it. According to the Australian Bureau of Statistics, the ABS, since Labor came to government in 2022, living costs have soared by over 18 per cent for working families, and the Australian standard of living has gone backwards by nearly 10 per cent. That is for sure. In the more than 12 months since the cheaper childcare policy came into effect, we’ve seen out-of-pocket costs for ECE rise by a whopping 8.4 per cent. There has been an 8.4 per cent increase in out-of-pocket costs for fees in early learning. Parents know that. Do you still feel like you can trust this Labor government with your money?

The coalition wants to see higher real wages for Australians, including for hard-working early childhood educators, but the key to meaningful wage rises is to bring down inflation and boost productivity, not a temporary taxpayer funded pay rise. We are also concerned that the Labor government is forming a habit of funding taxpayer wage rises for other sectors as well. It cannot become long-term policy where the government in ten years time is funding the wages of multiple sectors, especially when you consider that productivity in the last quarter was 0.1 per cent. It’s nearing zero productivity, yet the government is funding workers’ pay rises. The budget can’t afford it, and neither can Australian taxpayers.

We know that when the two years end and grant funding is no longer available, providers will have to pick up the tab for the increased wages. There is uncertainty around that right now for providers. That is something that they could plan for, but should they opt into this policy with the government, they’ll be hamstrung on fee increases and drowning in admin burdens and costs—more and more red tape that this government keeps wrapping small and medium enterprises up in. This makes financial liability for small- and medium-sized providers difficult, because 65 per cent of centre based daycare providers have less than 25 services. So there’s a big chunk of long-daycare services that will seriously have a problem with the stress that they will be under. If you can’t make money and you can’t pay your bills, then you can’t reinvest in your business. That’s something that both the for-profit part of the sector and the not-for-profit part of the sector do. They reinvest in their business, and they reinvest in their people.

Providers cannot be forced to run their services off the smell of an oily rag. That leads to cutting corners, diminished quality and, at the end of the day, going broke. The last thing we want to see in the sector is a drop in safety and quality standards. That’s what happens when centres face being squeezed from both ends. Unfortunately, this policy is going to affect the financial viability of many of the services that I was talking about. If you’ve never run a business, then you don’t understand all the costs associated with running a business. Those opposite just don’t get it. And why don’t they get it? Because none of them have ever run a small business. None of them have ever held one job before entering this place. They’ve all worked in unions. If you google them as they speak, if you google all of them, you will see that most of them have been secretaries of unions or worked for unions. So they simply don’t understand the sort of red tape and administrative burden this places on small and medium-sized businesses. They don’t understand that it costs them money to apply for these grants. It’s going to cost services money to apply. It’s going to cost them money to seek legal advice and set up a workplace instrument, which they have to do, because less than 20 per cent—in fact, it’s 16 per cent—of the sector currently has an enterprise agreement in place. So centres have to put one in place in order to apply for this pay rise that they then have to pay their educators.

Then it costs money to pay the staff the additional wage from December, in which they will be back-paid. It costs money to cover the additional on-costs of superannuation, of leave entitlements like long service leave and the like, and, for some, of the payroll tax that they’ll have to pay to the state. The government is going to cover only a small proportion of that with this bill, and we don’t know exactly what that is—10 per cent, 15 per cent or 30 per cent? We don’t really know at this point. These are some of the details that the government has not told the sector.

On top of all of those extra costs to your business, the government then turns around and puts a fee cap in place—a fee cap that is significantly less than what most services increase their fees by in July. For the fee cap, they just put some numbers together and said, ‘Yeah! Let’s just pick a number out. Four point four per cent is what we’re going to put in place. It sounds like a good cap.’ That’s 4.4 per cent, when groceries have increased by 11 per cent, electricity by 22 per cent, gas by 33.8 per cent and rent by 16.3 per cent under this Labor government, on this Prime Minister’s watch.

The cherry on top of this whole process is that they are forcing providers to sign an agreement with them for this money, without telling them what the fee cap will be in the second year. This is a greenfield—or a blue sky; whichever one you like to look at—where providers simply don’t know what the cap will be, even though they’ve already signed an agreement for two-year funding for their service, for the wages. Can you imagine? You’re just signing up to a legal agreement, being told you’ll have a cap on your fees but, ‘We don’t know what it is yet. We can’t tell you what it is or when it will come into play.’ That’s one of the dodgiest things that I’ve ever heard, because it’s a dodgy Labor policy. But it’s something that we’ve seen over and over from this Labor government, which continues to mislead Australian families and businesses and to leave out the details and to ruin productivity and ruin business. And that’s what they do. We’ve seen it in the numbers.

Now, as a hardworking taxpayer in this country, you would expect accountability and you would expect transparency when it comes to your money. This is your money. And $3.6 billion is an awful lot of money.
Most providers will do what’s intended and what’s the right thing and pass that funding on to their educators. But there will always be a very small percentage of people who try to game the system, as there always are in every sector. No doubt, some will try with this funding from this special account.

Not only does the government not have any stringent measures in place to ensure all the funding is going to educators and teachers, but also they are putting the onus on educators—on those working across the ECEC sector—to report to the Fair Work Commission if their employer is doing the wrong thing. We don’t know how many that will be. Should a provider be found to be doing the wrong thing and misappropriating $3.6 billion of taxpayers’ dollars, or part thereof, you would expect them to face criminal charges or perhaps a penalty. That’s what you would reasonably expect. Well, no, not in this case. Under this policy, the most Labor will do is to end your grant agreement and send you on your merry way. This is the Albanese government’s policy, and it should be on them, not on educators, to ensure that providers are doing the right thing, and it should be this government’s responsibility to penalise any provider who misappropriates this funding for anything other than to pay wages to our educators and teachers, who deserve it.

These are taxpayer funds, and taxpayers demand accountability and they demand transparency. I know that they are two very hard words for this Albanese government to understand, given they refuse to be accountable for their actions and they are about as transparent as perhaps a brick wall. But after two years they need to step up and start acting like a Commonwealth government. The Prime Minister needs to start acting like a leader. This Albanese government is a mess, and it’s lurching from crisis to crisis. Australian families and businesses deserve better than another three years of Labor.

For all of the reasons I’ve highlighted above, I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House notes:

(1) the Government’s economic mismanagement and cost-of-living crisis has led to higher wage bills, and higher utility, rent and grocery bills for providers;
(2) the bill will place further administrative burden on providers, particularly small and medium providers;
(3) the bill will put further financial pressure on providers who will have to cover the majority of the on costs, cannot increase their fees and have to pay the wages upfront, whilst receiving reimbursement in arrears;
(4) the Government has done nothing to address child care deserts and thin markets around the country, and this bill will not increase access for parents who currently have none; and
(5) the bill is a one-off sugar hit, which will only increase inflation further contributing to current cost-of-living pressures”.