HOST: Prime Minister, lovely to see you, thanks for your company.
PM: Good morning Linda.
HOST: You've moved quickly after that weekend red flag from the childcare sector about what's happening with costs and people leaving the sector. Now we've heard repeatedly you've put more than $22 billion into the sector. You've increased the childcare tax rebate from 30 to 50 percent. In light of that is there really a problem with fees going up in the childcare sector?
PM: We have done a lot but I know people are worried about fee increases and long term affordability.
You're right there's around $20 billion going direct to parents to subsidise the cost of childcare over the next four years. So that's tripled from what it used to be.
That means that the childcare rebate is at 50 percent and the easiest way of thinking about that is effectively the Government is going halves with parents on costs and we've moved to increase quality standards too because you want to know that your child is being cared for in a good place with great quality standards.
But I do understand that people are worried about fee increases and long term affordability. So whilst we've done a lot I want to see what else we can do, which is why I'm meeting today with Minister Ellis, with childcare providers, both from the not-for-profit sector and those that are run for profit and the relevant trade unions.
HOST: Okay, Minister Ellis actually in May said that the facts are that childcare has never been more affordable.
PM: Well that's true if we look at the percentage of people's income that they're spending on childcare.
So if you imagine that a family earns $75,000 a year, they've got one child in long day care. That used to take 13 per cent of their income now it takes 7.5 per cent.
So that has become a lesser percentage of income and more affordable in that sense. But I know people do worry, ‘well what's going to happen next year and the year after and the year after?'
What's going to be there in terms of quality? What's going to be there in fee increases? And it's because of those concerns that I want to see what more we can do to build on what we're already putting into the system.
HOST: It just does seem though that Kate Ellis was trying to play down the concerns there and now you've just jumped in on it. Are you concerned that your Minister hasn't handled this well?
PM: Kate's doing a fantastic job but we need to be doing two things at once.
We need to be putting in our record investments and we need to be keeping a good eye on what else we can do for the future. That's why I'm having the meeting today.
HOST: Okay let's go to some of the details because you've already signalled that you don't favour capping fees because you don't want to prevent childcare centres from being able to raise fees for legitimate reasons.
PM: I got a question yesterday about you know, and I interpreted the question as a very, you know, hard cap, you know, just put a cap on and no fee ever increases for the rest of time.
Well of course that's not possible because we all know that over time costs are going to go up. But I want to work through a broad range of options with providers and unions with Minister Ellis there.
This is a meeting today but it's not going to be the last meeting. I don't want people to have the expectation that we'll walk out with a whole new range of solutions.
HOST: So you don't have a proposal in your head? Sort of an outline you're going to start with? Some response that you think might work at this point?
PM: We've got some options that we'll want to talk through and we'll want to see what people bring to the table as well. But this is a process that will take a few months.
HOST: Okay, as well as that suggestion of a cap and obviously that could be discussed in all sorts of ways and I might just get you to pop headphones on for a moment.
Sue Lions from the childcare union United Voice said this to Adam Spencer on our breakfast show this morning.
SUE LIONS: As long as Governments put money into parents and not into centres, they have no way of controlling the fees. The Government needs a lever. I mean billions of dollars of taxpayers' money going into childcare centres and so really what Government needs is a lever to help keep costs down and so what we are now saying to Government around that benefit is that benefit, non-means tested benefit should be paid directly to centres.
HOST: Okay so that was Sue Lions this morning and she's talking about the non-means tested aspect of benefits that parents get. Are you willing to take that from parents and give it to childcare centres as an option?
PM: Looks that's one of the options that I'm sure will be on the table at the meeting today.
Sue and her union, whether it's Sue personally, but certainly her union will be at today's meeting and they are doing a fantastic job for childcare workers around the country - very focused on quality and training and support for those workers.
So that'll be one of the options on the table but I want to work through a range of options and it will take us some time.
But the aim here is to respond to parents' concerns about fee increases and affordability.
We're supporting them, we're supporting them strongly but of course I'm always open to ideas, good ideas about the future.
HOST: The Prime Minister Julia Gillard is our guest this morning in the studio and we'd love to hear your experiences in the childcare sector. Is childcare stretching your budget or are your children, or maybe you're a worker thinking about leaving the industry. We know that the cost, the earnings of workers is often very low; Prime Minister, as low as $18 an hour. What's a fair rate of return, do you think, for those people who look after our children at the most important part of their lives?
PM: It's not for me to strike an hourly rate for childcare workers. We've created a fair system of workplace relations.
HOST: $18 an hour isn't it though is it?
PM: Well we've created a fair system of workplace relations to help people, particularly those workers who don't tend to have much industrial power in our society to be able to go to an umpire and work things through.
And we've particularly got a stream for collective bargaining for workers who have been historically low paid and we've seen you know big moves on equal pay in the social and community services sector because we do know that occupations that are historically women's work have tended to be underpaid.
I know that United Voice and the Australian Services Union are pursuing pay issues for childcare workers and I will want to understand from providers and the unions what they think this all means for turnover and ability to hold people into the sector, because people obviously do want to see some continuity of care for their children, their children getting to know someone and that person, that very special carer, getting to know their child.
HOST: It's terrible when someone like that just disappears from your child's life so you'd be wanting to try to secure those workers. Certainly the losses seem huge, were you surprised? 180 a week is the rate of departures by staff.
PM: Look I'm not surprised that there are large departure numbers.
I was at a Good Start centre yesterday in Bankstown. Good Start is a big not-for-profit provider that came out of the ashes of ABC Learning and I was the Minister at the time and it was a very stressed period when we faced the prospect of hundreds of centres closing overnight and thousands of people being disrupted having nowhere to have their child cared for.
But out of all of that came this great thing, Good Start, not-for-profit, you know, running centres around the country.
They've certainly management to reduce their turnover rate so I think it's high on the-
HOST: We're they offering higher salaries?
PM: Well I think also training and a career path so people can see that, you know, they can start as a childcare worker but work their way through to being an early childhood educator, a teacher in a childcare centre. So I think that there are some things that we can explore today that, you know, centres can bring to the table about what they've done to reduce turnover rates.
HOST: Let's take a couple of calls. Jodie's on the line from Mosman, hello Jodie.
CALLER: I just wanted to make a comment on childcare. I've recently, we've recently had a baby, we've got a 1 year old little girl and I've had to return to the workforce, my husband and I. And we put her in long term day centre for two days and family day care for three days which is run through the council.
We've looked at this option for affordability because $145 a day for long term day care and with the family day care works out to be just over $1000 out of our pocket a month, which is quite substantial and we do appreciate the 50 per cent rebate but still with that it's out of pocket $1000.
Now recently the council put the fee up from $2, the carers pay $2 a day per child back to the council; this is for the family day care. This week they've put the fee up from $2 to $20.
Now for me that doesn't encourage the carers to keep running their business and it helps us as families in the community to send our children to a place where these families, where this carer really cares for the children.
HOST: Jodie, thank you very much. Prime Minister that's a pretty steep charge for the carers to be paying isn't it? It also demonstrates this is a multilayered problem. I mean how would you build that scenario into what your solution might be?
PM: Jodie I think has raised an important issue with us and it is multilayered. We've got around 960,000 children that get cared for in various forms of approved childcares so almost a million children. Around half a million of them are in long day care so when you say childcare people imagine those childcare centres that they drive past and they see the signage.
About half a million children in long day care but the rest of them, the almost a million children, are being cared for in family day care. So carers, predominantly women who are looking after children in their own home or they're being cared for in out of school hours care.
So a cocktail of going to school and then being cared for for a period while mum and dad are at work.
Now our childcare support runs to all of these various forms of care but we do, when we're trying to think about affordability and quality, have to be working in every area.
What Jodie's obviously pointing to is something very particular to her local council area and I'll be happy to have a look at that. Local council does play a role in family day care.
HOST: I'm interested in whether you think that you're quality reforms on minimum staff and training have contributed to this problem this problem which is not necessarily to be unexpected I suppose, but it seems that that is part of the issue here.
PM: Look they were always expected to have a modest impact on costs and so yes, there is that modest impact. We have for example started the new quality standard for the ratio of carers to babies, to the smallest children and that ratio is 1 to 4.
Here in New South Wales it was already at 1 to 4. In various other parts of the country you could have a childcare worker looking after more babies and they've now had to conform with the 1 to 4 standard.
So, you know, there is a balance here but people do want to be assured that their child is getting good quality care and they want to be assured too I think that early learning is happening in childcare, helping the kids get ready for school making a flying start into school.
So not, you know, kids in lessons, but kids learning through play, colours and shapes and counting and all of those kinds of things.
HOST: All the research tells us this is the most important time in a human being's life doesn't it? So you will presumably be wanting a solution that emphasises that educational content, but are we expecting to get it for a babysitter price if you like?
PM: Well I think we've got to recognise that there are some costs that come with quality and we recognised that with our quality reforms but those costs are quite modest. We are introducing and we've been very focused on getting early learning into childcare centres.
So whether your child is, well, however your child is cared for and whether they go to a standalone kindergarten or whether they go to a childcare centre, they get the benefits of early learning.
Because you're absolutely right the research is in, it's clear, it's crystal clear that if you're going to make a long term difference to someone's life, early childhood is the time to do it and if we're going to make a long term difference to disadvantage, to the prospect of kids who come from the poorer homes where there aren't the books and the learning experiences, you know, happening at home then early childhood education and care makes a profound difference to that child's life.
HOST: How long do think it will take you to work through these issues? You say it's not a solution in one day's summit, it'll take some months. When can we expect to see something?
PM: Well I am saying some months and I'm using that terminology deliberately.
I understand that people want to see us getting on with this job and we will be and as we're getting on with the job we'll continue, you know, the record investments that we've already agreed to because we understand how important it is not support families when their kids are at this stage of life and then the kids get bigger and the kids go to school and the cost of living issues don't end when the kids go to school which is why we've got the Schoolkids Bonus in place and people will see the first payment before 30 June in this year.
HOST: One text in from Donna, she asks you Prime Minister what about after school care for over twelves? Now that's a whole can of worms. There's not a lot out there for over twelves, is that something you're thinking about?
PM: Look that is a big issue and something that we do have to think about. People's needs for care don't end at a hard date.
People obviously don't want to see 12 year olds rattling around unsupervised with all of the problems that that can cause.
HOST: Just on a couple of other issues Prime Minister the economy, great figures yesterday we should all have a spring in our step your Treasurer said but here in New South Wales perhaps not so. It is still a very uneven scenario across the country isn't it the two-speed economy as we keep hearing and now with still more global turmoil on the markets. China slowing, Marius Kloppers from BHP yesterday warning that some of those pipeline projects that your Treasurer often talks about, might get put on hold. Things might not look so good in the near future?
PM: Well Linda, I think firstly let's just take a moment to digest this news because I think it's something that we all should be proud of.
I mean we have lived through the biggest global economic turmoil since the Great Depression.
So, you know, the biggest event in our lifetimes, the biggest event in our parents' lifetimes, and we have just lived through it. And Australia has come through that strong.
These growth figures are the strongest in four years and what they are telling us is that as a nation we pulled together and we got this job done.
We kept the economy growing, it's the envy of the world, we kept people in work.
Now that doesn't mean that for every individual, for every family, for every part of the country that people are feeling all of the benefits of our current economic strength.
Though we do need to remind ourselves yesterday's numbers are telling us that we're growing not just in mining. So it's, you know, economic growth broader than that.
HOST: Well it is a bit confusing, for some of use a bit confusing though. We're often doing stories here about how the retail sector is struggling, shops closing, you know, well-known streets in Sydney looking all boarded up, it seems counterintuitive.
PM: Well when you're looking at household consumption you're looking at traditional retail you know going to the shop and coming out with a new jacket or a pair of pants or whatever and you're talking about the services that households consume and there certainly is an adjusting consumer preference between retail in the traditional form and the consumption of services so that's reflected in the figures.
But consumption in these figures is strong so the economy's got more strength than just in mining but there is still a patchwork effect here which is why we're very keen to share the benefits of the mining boom and that's what the Minerals Resource Rent Tax is about.
These figures I think are an answer to those who over a long period of time including leading figures in the Opposition who have been preaching doom and gloom and they're a tribute to Australians and our determination to work together even in the toughest of times.
HOST: You don't worry that China is looking a little gloomier than we might have hoped? We are still very tied to China aren't we?
PM: China is very important to us but once again let's just get a sense of perspective here.
We're seeing some moderation in China's growth rates but China will continue to grow strongly and it is continuing to lift people out of poverty. It is continuing to see its population urbanise.
Hundreds and hundreds of millions of people becoming city dwellers; they need somewhere to live and it's Australian commodities that are helping them build what they are going to live in and that phenomenon, the urbanisation of China, is going to continue for a long time yet.
HOST: It is a fantastic thing to watch actually even when it does slow down it's still going at an extraordinary pace. Just the tabloid TV battle over the prostitute who first claimed and then recanted about Craig Thomson. You must be delighted to see the focus shift off, specifically off your government on that question for a while?
PM: Oh look, I'm not going become a commentator on what TV show decides to do what.
HOST: Another one from this week, the Native Title changes that your Attorney-General announced yesterday. A lot of Aboriginal people saying of course they're sick of seeing their old people die while they wait for Native Title determinations but nonetheless it has been quite a successful process and the Opposition is saying it does want to mess with that. Should you leave well enough alone?
PM: There are some modest improvements we want to make and the Attorney-General spoke of them yesterday.
I mean we view the Native Title system in this country as a great national achievement, obviously driven by a Labor Government and something that Prime Minister Paul Keating is rightly proud of. And just when you know we reflect on the cycle of politics, remember that scare campaign? Remember how we're all going to lose our backyards?
No one's freehold title for their home was going to be safe. Conservative politicians were on TV screens producing maps to whip up fear.
People might want to just reflect what those fear campaigns look like in the judgement of history and think about some current fear campaigns and what they're going to look like in the judgement of history.
But the improvements Nicola's aiming for include things like requiring people to bargain in good faith rather than timing out people's ability to pursue their claims, and I think they're modest but sensible improvements.
HOST: On the other hand there are those like Warren Mundine who say look, you know, take the initiative. We know that if we reverse the onus of proof for example that there would be a real boost to Aboriginal enterprises that's good for the economy. Why not take that step?
PM: I understand that there will be a number of people who continue to advocate for reversing the onus of proof, but we've taken a decision about what we think can and should be achieved at this stage.
They are improvements that will make a difference but it's a building on, not a huge redoing and that's what Nicola Roxon announced yesterday.
HOST: Prime Minister very good to have you in the studio. Thanks for your time today.
PM: Terrific to be here, thank you very much.