House debates

Tuesday, 25 June 2013


Early Years Quality Fund Special Account Bill 2013; Second Reading

8:35 pm

Photo of Ken O'DowdKen O'Dowd (Flynn, National Party) Share this | | Hansard source

I wish to speak on the Early Years Quality Fund Special Account Bill 2013, which I oppose in its entirety. This legislation seeks to establish a $300 million fund to provide wage increases to around 30 to 40 per cent, although this figure is not clear, of the long day care workforce and it only lasts for two years. As for what happens after two years, we guess it reverts back to where it is today. The centres will need to enter into enterprise bargaining agreements with staff and meet eligibility criteria. Given the limited pool of funds, it could be on a 'first in' basis, yet this is not even clear. After the two years workers will revert back to their previous wage. This would be history-making if this were the case. This bill is unbalanced. It is divisive, it is unfair and it will create a wage war.

The bill has come around as a result of the union involved waging the Big Steps campaign, seeking to increase wages and conditions in the early childhood sector. The United Voice union—previously the Liquor, Hospitality and Miscellaneous Union, or the LHMU—have been campaigning for an increase in childcare sector wages since 2008, with their requests for increases ranging between $7 and $10 an hour. They proposed that the government fund this increase, and they were actually originally looking for $1.4 billion a year—and indexed.

The coalition have a number of serious concerns with this bill. We do not dispute that childcare educators are low paid. We know these workers are skilled and work long and hard hours. Any wage increase should come through the Fair Work Commission, the body that the government has established with the responsibility of determining appropriate and fair levels of remuneration. Yet the United Voice union has refused to lodge a wage claim with the Fair Work Commission. Can you believe this? They rely instead on a Labor government to just hand over money hand over fist. It is unheard of.

This $300 million is nothing more than an act of appeasement to the unions, which will use it to enable them to go on a recruitment drive within the sector. In my seat of Flynn union delegates have been around the child-minding centres, telling the workers and management that, if the staff do not join the unions, which will cost around $500 a year, they will not be eligible for this pay rise. When they are confronted with this, they say they do not know anything about it, but I can tell the House that I have numerous people saying they have gone to just about every agency that I know of. They have been there. They have even got the contracts to join the union. This $300 million is nothing more than an act of appeasement to the unions and has to be stopped.

How is the increase in salaries going to be distributed to roughly one-third of the staff? How does this work in practice? It does not. It is going to send a wedge through the workforce. Thirty per cent are going to get a wage rise; the other 70 per cent will miss out. This is going to cause bedlam in the industry. You will have staff jumping ship and going to where they can gain $7 to $10 an hour extra in their pay. Why wouldn't you jump the fence if it meant getting an extra $400 a week in your pay packet? Think of the carnage it is going to cause. The operators, if they want to stop the staff from jumping the fence, will have to increase their wages, and where does this money come from? They will have to put their fees up, and it is going to have to come from the public themselves. It is a very unfair system. How can anyone rule that one-third of the workforce gets it and two-thirds miss out? It is totally incredible that anyone could devise a bill that would say that to the staff. Imagine if one-third of your staff had the wage increase and two-thirds did not have it. What would you tell them as an employer? You would be ducking for cover.

We are still unsure how many workers will be eligible for the pay rise. There is even an argument going on between Minister Garrett, who says 68,000 people are involved, and the media, who say there are 78,000. There is a difference of 10,000 staff.

Photo of Michael McCormackMichael McCormack (Riverina, National Party) Share this | | Hansard source

They were never good at figures!

Photo of Ken O'DowdKen O'Dowd (Flynn, National Party) Share this | | Hansard source

You are right. But this is just a debacle. How anyone can vote yes on this has got me.

Thirty to forty per cent is a pretty rough guide too. The government have established, to their credit, a seven-member panel that has the responsibility for deciding the criteria centres will need to meet in order to be eligible for the funding. I would like to sit in on that meeting and see how that works! Yet these guidelines are not yet determined, meaning they are unable to consider whether they are fair or unreasonable.

This bit of legislation is being rushed through at a hundred miles an hour so that no-one really knows the facts or how this bill is going to work. It sounds to me a bit like the grabbing of funds from bank accounts and superannuation funds. They can take it all right, but they have no idea how they are going to return the funds once the public realise the funds have gone out of their account and they squeal. They do not know how they are going to give it back. This sort of legislation has been rushed through this House time and time again. The public is getting pretty sick of it.

Membership of the panel seems deliberately slanted away from the private sector, though the unions secured a seat around the table. The coalition has extensive correspondence with childcare providers regarding this bill. The childcare sector as a whole expresses concern that the $300 million fund will create a two-tier system, driving a wedge in the system. You are going to have two classes of workers. Is this fair? They are gravely concerned that the centres that are not successful in securing funding will have their staff poached by the other centres. The staff will be very hard to retain if there is a difference of $400 a week in their pay packets. How are they going to hold onto those staff? A number of centre owners have indicated they will have to offer a higher wage rate in order to keep the staff and adhere to the national quality framework staffing requirements.

The coalition referred the bill to the House standing committee, and the bill was automatically referred to the Senate committee for an inquiry; however, at the end of the day, this bill is being rushed through without proper consideration. I have a letter here from a child-minding centre in my area. It says:

It distresses me greatly to have the uncertainty that this bill focusses on our profession. The problems that I see with this Bill are as follows:

There is simply not enough money for the process to be effective. First not all services will be able to access the grant. The big question is how will it be decided who will miss out …

It goes on:

There seems to be absolutely no link between who gets the grant and the quality of the service.

… … …

Even if the grant is obtained there is no guide to who is able to receive it within the service.

… … …

Ability to plan for the future is compromised due to the grant dropping back in 2 years. It would not be sustainable to keep fees reduced and maintain approx an extra $85,000 to the bottom line.

Another letter says:

In regards to the current talks of a pay rise to the Child Care industry I am totally confused and dumbfounded. After hearing about a pay rise to the industry we had a visit from United Voice in April who informed us they would be responsible for deciding which Child Care Centres would be receiving the pay rise and that it would go first to the centres with the highest Union membership.

That is a quote from a union delegate. It says further:

None of our employees were happy about this, including our Director. The Union rep when later talking to the employees told them that most people had signed up and that … our Director, was fully on-board.

This was not the case. The letter goes on:

… had earlier had strong words with the rep but like the rest of us had felt strong pressure to join up, believing this was our only way to be in the running to receive the raise. The Union told us the only other way to be in the running was to privately organise as an Enterprise Bargaining Agreement which would cost of tens of thousands of dollars.

If that is not bullying, I do not know what is. It further says:

I have personally tried to find out information regarding the how, where's, why's, and whose of this whole thing and the only information I have been able to find is very vague and left me more and more confused.

'Can you please help me with this important legislation and please oppose it at every opportunity.' That was from two childminding centres in my area. Some workers have been told they do not get it if they do not sign up and their colleagues will not receive a pay rise. Employees signing up and committing to pay more than $500 a year in union fees are falsely being led to believe that they will be guaranteed a pay rise. There is much confusion out in the workplace. It is divisive. It is unbalanced. It is not fair and that is why I totally oppose this bill. I think it is the worst bill that I have come across in my three years in parliament.

8:48 pm

Photo of Michael McCormackMichael McCormack (Riverina, National Party) Share this | | Hansard source

Quality childcare services and facilities are an integral component to modern Australian families. As the requirement of more families grows to have a dual income stream in order to keep pace with the cost of living, so too does the need for childcare centres. The cost of child care is high and it is increasing. Many families have to make savings in other areas of the household budget in order to afford care for their children. With the cost of living rising and quality child care becoming more and more unaffordable for families, the Early Years Quality Fund Special Account Bill 2013 is set to pass yet another cost on to families.

This bill is seeking to establish the Early Years Quality Fund Special Account. This account will provide wage increases to long day care workers, costing some $300 million over two years. It is important that our childcare centres, particularly those in rural and regional areas, remain well staffed with highly trained and skilled professionals and have the resources they need to carry out their work. But, in typical Labor style, this bill is seeking to achieve that by caving in to the demands of unions and adding caveats to funding which require childcare centres to increase their levels of union membership.

There is nothing wrong with being in a union. I was a member of the Australian Journalists Association and later the Media Entertainment and Arts Alliance for more than 20 years.

Photo of Tanya PlibersekTanya Plibersek (Sydney, Australian Labor Party, Minister for Health) Share this | | Hansard source

Did they kick you out?

Photo of Michael McCormackMichael McCormack (Riverina, National Party) Share this | | Hansard source

No, they certainly did not kick me out, Minister. In fact, they were very pleased to take my union membership fees, and I know that they put them to good use. Unfortunately, I note some other unions' fees have not been put to good use. We have certainly heard that in this federal parliament in so many other ways and means and forms. But, thanks for the interjection, Minister. I do hope you stay at the table because I want to give you in particular a mention a little later on and it is going to be a nice mention, so stay tuned.

As a former business owner and as a former member of a union, I know how important it is to ensure that unions do not have unfettered power within a workplace. This is exactly what the Labor Party are seeking to do. We know this bill will provide a $300 million fund over two years to provide pay increases to childcare workers. What those opposite may not mention, however, is the fact that the genesis of this bill came from the Big Steps campaign mounted by United Voice.

In order to comply with the United Voice's demands, this bill will require childcare centres to enter into an enterprise bargaining agreement in order to qualify for the funding. In addition to this, a seven-member panel consisting of community and strong union representation will make determinations as to a childcare centre's eligibility. Childcare centres across the country are very, very concerned about this legislation. We have just heard the member for Flynn read some letters from his electorate of the concerns expressed by good people in his electorate about this legislation. We have heard other members on this side express similar suspicions and concerns about this bill.

Childcare centres are worried that if their application for funding is unsuccessful then they will have to pay the pay increases themselves. Imagine where that additional funding is going to come from—straight out of the hip pockets of families whose children are in the centre. This is a particular concern in regional areas.

Recently, I visited the Billylids Early Learning Child Care Centre at Hillston and the minister at the table, the Minister for Health, might be interested to know—Minister, I hope you are listening.

Photo of Tanya PlibersekTanya Plibersek (Sydney, Australian Labor Party, Minister for Health) Share this | | Hansard source


Photo of Michael McCormackMichael McCormack (Riverina, National Party) Share this | | Hansard source

As you should be. The people of Hillston were very appreciative of the $6 million that was part of the Health and Hospitals Fund that they received in the 2012 budget for a multipurpose service redevelopment. I acknowledge that. The people of Hillston are remote. They deserve the very best medical services that they can receive and they, like anybody else in regional Australia, deserve to have as good a medical service and facilities as anyone living in a metropolitan centre. I know the minister knows that. I know the member for Bowman, who has a shadow portfolio area in that respect, knows it as well.

At Hillston, I visited the Billylids childcare centre, which is having difficulty meeting costs since the establishment of a second centre in the town. Hillston Billylids is a not-for-profit community-owned organisation that is licensed to operate as a 33-place long day care centre in Hillston. It has done so since 2000. Indeed, it was opened by my predecessor Kay Hull, and I know the minister would acknowledge the work that she did on behalf of the Riverina and especially on behalf of healthcare services in rural, regional and remote Australia. She is still doing it. The minister knows that she is still doing it as an executive member of Can Assist as well as in palliative care, to services for Wagga Wagga, and in an effort—and I know the minister knows this because I am on that committee as well—to get a rural medical school at Wagga Wagga where one is very much needed.

Let me go back to Billylids, which has been receiving funding through Long Day Care Sustainability Assistance from the Department of Education, Employment and Workplace Relations. The centre has relied heavily on this funding to support the vital community service it has provided to the Hillston community and surrounding region. Hillston Billylids provides the bulk of care to the community as it is licensed to have 33 children on one day. Currently, this is restricted to 29 as they do not have, and could not afford, an early childhood teacher. Currently, utilisation of the centre is 52 per cent and, unfortunately, with changes to fees which need to occur within the centre it is anticipated that the utilisation rate will drop even further, and that is a great shame.

The only way Hillston Billylids can see itself to be financially viable is to increase the fees by about $20. If fees are to be increased by this amount, a large proportion of families will not be able to afford the child care offered by this organisation and that will inevitably result in the closure of the community-owned centre. That is a great shame, particularly for a town the size of Hillston in a locality as remote as Hillston. The alternatives are few. With children split between the two centres, Hillston Billylids in April lost the support it had through the Community Support Program.

The President of the Hillston Billylids Management Committee, Shaina Peters, wrote to me and asked me to approach the Minister for Early Childhood and Childcare to request an extension of the funding arrangement, given the realities of alternative employment for workers who would lose their jobs after this funding was taken away. But the minister has deemed that the Hillston Billylids childcare centre is ineligible for sustainability assistance under the Community Support Program. Now, as if to rub salt into the wounds of the employees at the Hillston Billylids childcare centre, whose future is in jeopardy thanks to the removal of support funding from the federal government, Labor is trying to demand at the behest of the unions that childcare workers enter into an enterprise bargaining agreement.

I will read a little from a letter of 2 April from the General Manager of the Carrathool Shire Council, Ken Croskell, in relation to the Hillston Billylids Early Learning Child Care Centre. The letter states:

The Centre, which is solely operated as a community owned venture, is currently under threat to its long term sustainability …

…   …   …

The loss of funding equates to $47,000 annually and the Hillston Billylids will need to seek options to remain viable in the future. The most likely option is an increase in fees which may well drive many of their patrons to the privately operated centre and which may ultimately result in the closure of the community based centre which would be disastrous for Hillston and its ability to provide adequate long day care and child care (33 places down to 16).

The Mayor of Carrathool Shire, Peter Laird, was here in Parliament House only last week. He is a good man; he runs a good council. The Hillston community deserves the very best it can receive.

Let us be clear about this bill before us. This is not an attempt to ensure more families can access quality child care with skilled and highly qualified carers. This is an attempt to put the unions' stamp back on this sector. Why else would United Voice be approaching centres requesting they enter into a memorandum of understanding requiring paid staff meetings and an ongoing commitment to the Big Steps program? Why indeed? Why else would United Voice have also been going around childcare centres informing owners they require 60 per cent union membership if the owners want their enterprise agreement given priority treatment? Because this is not about the cost of living and it is not about families. This is about restoring the power of the unions, which brought most of those opposite to this place. We can hear them backwards and forwards about this because this bill is important, and Labor is very insistent on getting to the forefront its union power in these last few remaining days of parliament.

This is a plan from the same party that espouses the virtues of governing in the interests of working families. There is no argument from this side of the House: working families are very important. They keep small business running and small business is the engine room of the economy. But we cannot keep hitting working families again and again and again. Doesn't Labor think those working families would want child care to be affordable? Of course they do. Doesn't Labor think that community-owned not-for-profit facilities such as Hillston Billylids should be able to access funding from the government to ensure it can continue to provide such a vital community service to such a good community? Hillston certainly is a good community.

On 12 July last year I was very pleased to have the shadow minister for childcare, Sussan Ley, who is the member for Farrer—a neighbouring electorate to mine—visit Wagga Wagga. The member for Farrer knows the demands which are placed on rural and regional families. When it comes to childcare needs, and particularly how the rising cost of living is placing additional stresses on families who need to access affordable care for their children, the member for Farrer gets it. She understands regional areas and she certainly understands how difficult it is for families to access childcare. She knows the strains that people are under, let alone when people are hit again and again with higher and higher costs, which is what is going to result from this legislation.

Forcing childcare providers to fund additional spending on wages when government support is cordoned for those who ensure their staffroom is filled with union members is not addressing the rising cost of living, nor is forcing childcare providers who do not receive this funding to pass on the same pay rise to families of the facilities. This is the Labor Party giving in to the bullying tactics of the unions. This is the Labor Party giving in to these bullying tactics. We have seen it all too often. We have seen it time and again—

Mr Frydenberg interjecting

I hear the member for Kooyong cry out, he knows of the folly of having unions running the government. He knows the folly of having unions running policy and legislation. This sort of behaviour should not be condoned. This is why I join my coalition colleagues in opposing this bill. It does need to be opposed. It is bad legislation and, like so many other things in these last sitting days of this 43rd Parliament, it is being rushed through. We have heard the Senate bells going again and again tonight as senators are scurrying about trying to get through legislation. We have got so many pieces of legislation that still need to be passed and speakers are being gagged. So many pieces of legislation are being guillotined.

Honourable members interjecting

It is a shame and, as I heard the member for Flynn say, the public deserve better. They expect better. They demand better. I certainly do hope that after 14 September they do receive better government because we need better governance.

Honourable members interjecting

I am surprised that the minister is calling out because I know she knows how important families are. They do not need to be hit with higher and higher costs. They certainly do not need to be hit with more costs at the behest of union members. As I said previously, I was a member of a union. There is nothing wrong with being a member of a union. But union fees need to be used wisely. Certainly union members need to know that their fees are going to go where they are intended.

The coalition have serious concerns with this bill. We do not dispute that childcare workers, childcare educators, are low paid. Any wage increase should come about through the ruling of the Fair Work Commission, the body that this government established. It set it up with the responsibility for determining appropriate levels of remuneration. This is not good legislation. It needs to be rejected. Certainly the people of Hillston think that, certainly the people of the Riverina think that and I hope this parliament thinks the same.

9:03 pm

Photo of Peter GarrettPeter Garrett (Kingsford Smith, Australian Labor Party, Minister for School Education, Early Childhood and Youth) Share this | | Hansard source

I would like to provide some summing up comments for this Early Years Quality Fund Special Account Bill 2013 by noting that the government has a proud record of supporting early childhood development and this bill is another example of that support. Over the next four years the government will invest a record $25 billion in early childhood education and care, of which $22.1 billion will be in direct childcare assistance to parents. That is more than triple the investment in the four years prior to 2007, making direct improvements to the lives of children and families. To the members opposite, all I would say is: this government has truly recognised how absolutely crucial it is to provide the appropriate commensurate level of investment into the early years, into childhood care and education so that we can get young Australians on a solid foundation for the rest of their learning journey.

The Early Years Quality Fund is another demonstration of the government's commitment to the sector and this time to the dedicated educators who work with children every day. I stress that these people are educators, not babysitters. This bill provides a wage of recognition of the important work they do and the critical education and care service they provide for Australian families. That is about ensuring that children have access to high-quality early childhood education and care experiences and the enormous benefits that that provides for children themselves, for their families and for the country as a whole.

I think it is fair to say that the enormous growth in the use of early childhood education and care services means that the need to ensure that there is a qualified and professional workforce is now more important than ever. The Early Years Quality Fund provides $300 million over two years in grants directly to long day care centres to supplement wage increases for educators. Funding will be provided directly to approved services to improve quality outcomes for children by supplementing wage increases. The Early Years Quality Fund will help early childhood education and care services attract and retain qualified professionals and assist in raising the professional status of the sector. The Early Years Quality Fund will further support the effective implementation of the National Quality Framework, including the educator qualification requirements commencing in 2014.

To provide these high-quality services we now need to attract, retain and upskill qualified and committed educators to manage the ever-increasing demand in the sector. We certainly understand that support is needed for the early childhood education and care sector to meet these increased requirements embedded in the National Quality Framework and of course meet increasing growth in demand. Increased wages through the Early Years Quality Fund will provide some of that support.

I acknowledge the concerns that have been raised within the early childhood education and care sector through the committee inquiries relating to the bill. There have been concerns raised regarding the requirement for an enterprise agreement. It is important to understand that the requirement for an enterprise agreement will ensure there is a legal framework in place for the funding to flow on to workers' wages. For individual educators, having an enterprise agreement in place ensures they have a statutory enforceable right to receive the pay increases granted under the fund.

Some in the sector have also raised concerns that the quantum of funding does not provide an increase for all educators, and some have called for a smaller increase that can be distributed to all educators in the sector. I acknowledge these concerns and I know that there is more to be done within this sector to ensure that we attract and retain qualified, respected educators who are being remunerated in a way that shows their value to the Australian society and the future of Australian children.

In a challenging fiscal environment this government has made record investments in early childhood education and care, and by committing a further $300 million to support a quality early childhood workforce the government has acted to keep qualified and professional educators in the sector, maintaining the relationship with children and families that we know are so important to outcomes for children. We are laying the foundation for longer term sustainable professionalism of the early childhood sector.

I can say that a new Pay Equity Unit will be established in the Fair Work Commission, with a focus on conducting research and additionally collecting data and specialist pay equity information to inform matters related to pay equity under the Fair Work Act, modern award reviews and annual minimum wage decisions. While the Early Years Quality Fund will initially help the sector retain qualified workers, the Pay Equity Unit will examine gender and pay equity issues, particularly in female dominated areas such as child care.

I conclude by saying that I have been privileged to have the opportunity to visit many early childhood education and care centres. I have listened to the staff and the parents who say how important it is that these educators are recognised for the work they do. The government agrees with them, and the Early Years Quality Fund is a step towards achieving that recognition. I encourage the House to also agree and to vote to provide these committed and critical yet low-paid workers with the opportunity to gain the pay increase that they so surely deserve. I commend the bill to the House.

Photo of Robert OakeshottRobert Oakeshott (Lyne, Independent) Share this | | Hansard source

The question is that the bill be now read a second time.

Message from the Administrator recommending appropriation announced.