JAY WEATHERILL AO
CEO, THRIVE BY FIVE MINDEROO FOUNDATION
NATIONAL PRESS CLUB CANBERRA WEDNESDAY, 17 FEBRUARY 2021
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The most significant economic and social reform of our generation is within our grasp. The greatest social reform since Medicare.
The most important economic reform since the opening up of our financial system. Early years reform will define the post-COVID era.
It is not only the right thing to do. It’s also the smart thing to do. And the benefits of reform are predictable.
A high yield, low risk investment.
The costs of inaction, too, are also entirely predictable.
They are incredibly expensive.
The current system is bad for children, bad for families, and bad for the economy.
Right when Australian families need our help the most, we make it harder for them. We talk about ‘family’ a lot in this nation.
Our political discourse is rich with talk of ‘family values’, ‘working families’, many of which, we are told, are trying to make ends meet.
But this is inconsistent with our behaviours.
We should not talk about family values if we insist on policy settings that do not value families.
And there are few greater examples of this hypocrisy than our current approach to the early years.
Our policy settings increase pressure on Australian families.
CPI data released in late January reveals out of pocket child care costs across Australia are now 2.4% higher than they were this time last year.
This is twice the rate of inflation for all other goods and services. Almost half of the total increase in the CPI in the past quarter came from increased child care costs.
These significant additional costs after government subsidies have for the past decade, been rising faster than electricity bills, faster than housing costs, adding to cost of living pressures.
And the Government’s own modelling projects these costs to grow by around four per cent per annum in each of the next three years.
A few weeks ago, a Federal Minister tried to put these increases into context. After subsidies, the out-of-pocket expense for child care was said to be around five dollars per hour.
Doesn’t sound like much, does it.
Unless of course you’re a second income earner needing to work twenty hours each week to make the family budget. That family is one hundred dollars per week out of pocket – that’s if they have only one child.
If they have two children under five, they are two hundred dollars out of pocket.
How many Australian families would think a two hundred dollars weekly impost to be insignificant? Not many, I would imagine
Out of pocket expenses for preschool are also rising.
The current system is unaffordable and inconvenient for too many Australian families, which is why enrolment in preschool has fallen for the third consecutive year – from 92.4% in 2016 to 87.7% in 2019.
The family may be core to our political conversation, yet we continue to support policies which effectively place Australian families under more pressure than in comparable countries.
The accumulated burdens on families can contribute to toxic stress in children.
This kind of prolonged toxic stress can disrupt the development of brain architecture and other organ systems.
It can increase developmental delays leading to health problems in later life including heart disease, diabetes, substance abuse and depression.
So, when families are under financial pressure, it’s the children who suffer with long-term effects on their learning, behaviour, and health.
The Commonwealth Government invests significant amount into Child Care Subsidies: around $8.5 billion. It also provides a further $433 million to States and Territories for funding preschool.
Some would say that this is enough.
Well, what do we get for this investment?
Early learning centres in Australia are of inconsistent quality and affordability.
The Productivity Commission recently reported another increase in regulatory breeches in childcare centres in Australia.
Around 16 per cent of childcare centres do not meet National Quality Standards.
The Commonwealth’s can’t even reliably measure attendance at preschool because the data, collected by State and Territory Governments, is not attendance but enrolment.
But as I just observed, even enrolments in preschool are dropping.
If the Government is investing heavily, and fees keep rising, where is the money going? It’s certainly not going to our educators, who are undervalued.
Building laborers take home $1,458 each week with entry level skills.
Concreters with entry level skills, who earn $2,100 per week.
Childcare workers, who must have Certificate 3 qualifications, are paid $953 per week. Not enough. Nowhere near enough for the essential service they provide.
Workers who build our homes toil hard and have every right to a decent wage. But the work undertaken by our early years educators is nation building.
They help parents to understand that every moment, every word, every interaction with their child has the potential to stimulate a million neural connections every second.
They provide the opportunities for the play-based learning so crucial for a child’s development.
They provide the special supports for families in need. Children with disabilities need and want the same things that every child wants and needs.
With undervalued and insecure work comes a high staff turnover. Pre-COVID staff turnover in early learning centres was estimated to be around 30 per cent.
This disrupts the continuity of the relationships between educators and families which we know are so crucial for the quality of services for children.
And is it any surprise that we have a skill shortage -with around 10 per cent of long day care centres granted exemptions from the National Quality Standards in relation to qualifications.
Governments should seize the opportunity, and work with TAFE to address the skill shortage and fulfil the high demand for qualified early childhood educators.
A functioning system relies upon qualified, well-paid educators in secure work.
Any discussion of the early years has usually been categorised as social policy, regarded as a net drain on the economic resources of the nation.
But what if we looked at early years policy through an economic lens?
It is a common refrain that economic growth is driven by the three Ps: participation, productivity, and population.
The ‘first p’ is participation.
Our economy needs to mobilise all its talent and resources, especially with slowing rates of migration. Any disincentive to join or re-join the workforce is a drag on our economy.
For many families, both parents need to work to cover the costs of living. Balancing work and bringing up children is a challenge.
It shouldn’t be this hard. We can design a system which satisfies both needs.
Recent work done by the KPMG and Grattan Institute shows our current tax and transfer systems, combined with the cost of childcare, delays a return to the workforce for many Australian parents.
The downstream effects for Australian mothers – on their career progression their financial security and ultimately their superannuation – are real.
The reforms we are proposing will have an immediate, positive, impact on participation.
The quality of early learning affects the ‘second p’ productivity.
The Blueprint Institute, a centre-right think tank, believes productivity to be the most significant economic benefit from reform to our early learning system.
Early childhood is a time of rapid change- particularly for the development of executive functions which can set up a child for lifelong success.
These executive functions or essential life skills include:
• attention and focus
• responding to emotions
• relationships and communication • planning and routines
• taking on challenges
…the very skills on which all later skills are developed or as Nobel prize winner James Heckmann puts it “skills beget skills”. It contributes to the 13% return on investment in early childhood development.
Currently, around 22% of Australian children enter primary school developmentally vulnerable.
Little wonder Australia produces mediocre – and worsening – PISA results.
As repetitive process jobs are eliminated by new technology, the jobs of the future will increasingly draw on these executive skills.
Therefore, the quality of early learning today will directly affect our national productivity tomorrow.
The ‘third p’ is population.
And as parents consider the costs of raising children, choices about having families – and the size of families – are affected.
Child care, long day care, preschool and other early learning arrangements and their ease of access considerably contribute to the cost of raising children and inform family planning. Past guardians of conservative politics have thought deeply about economic management.
Peter Costello introduced the baby bonus to encourage parents to have “one for mum, one for dad and one for the country.”
He took these measures not because three was his lucky number but because he understood that population is a major driver of economic growth.
Our global competitors understand this.
It is not for nothing that Japan, where population has been in decline since 2011 and workforce participation for women has historically been low relative to other developed economies, has invested heavily in preschool education.
In 2019, its conservative government amended the Children and Child Rearing Support Act to make public preschool universal for all children aged three and four years.
If Australia does not reform its early learning system, we will be uncompetitive within a generation.
We pride ourselves in this country on our easy-going outdoor lifestyle – a great place to grow up – but the reality for many families is that life is really tough.
We are not a child friendly or a parent friendly society and our policies reflect it.
We should insist on policies that will make Australia the greatest place in the world to grow up, and the greatest place in the world to be a parent.
Policies that relieve pressure for Australian families, in the interests of both parents and their children.
All policies should be measured against three tests:
How do they reduce pressures on families?
How do they increase the capabilities of parents and educators?
What is best for children?
How can we honestly say that we are measuring up against any of these objectives? We can settle for a mediocre system, which isn’t working for anyone.
Or we can create a system which within a single generation will connect parents to the support and services they need at high quality places, a pram-friendly walk from our homes.
Where children are expertly led through high quality learning experiences.
A system in which parents are empowered to make choices about work and family, free of financial pressure.
And in which the unique needs of every child are met by highly trained and valued educators, who form trusted relationships with parents and care givers and children.
So, how are we going to achieve this?
We are going to campaign.
What is our campaign goal?
We want an early learning system that is affordable, accessible, and high-quality. How will we achieve this?
We will put pressure on the political process.
If our elected representatives in State and Federal Parliaments are comfortable wearing the social and economic costs of inactivity, they should know this will come at a political cost.
Parents are a politically mobile constituency. And they have a lived experience of an unaffordable, time-consuming, bureaucratic early learning system.
Minderoo Foundation will help to bring together a broad constituency for change from across the political spectrum.
We will run a sophisticated, well-funded, campaign.
We will be talking to educators, parents, their children, and concerned citizens in marginal seats across Australia, as part of our national Roadshow.
We will develop new platforms to allow their voices will be heard in Parliaments around Australia.
If you spend time on social media, you will see our message.
Know our goal:
We have a vision for Australia in 2030 in which every child thrives by five.
These outcomes are within our reach, and well within our capabilities as a nation.
Nicola and I have arrived at this place from different paths.
But having heard and understood the way a baby’s brain develops, and how profound it is for their health and learning and behavioural trajectory and what that means for our nation, and its prosperity and wellbeing…
We are convinced that there is no more important public policy issue facing Australia today.
Both of us had tried to effect change.
Both of us have been disappointed by what we have been able to achieve to this point. But we are determined, and both believe…
That it is time ——it’s time for a new early leaning system for Australia.