Last weekend Labor announced a $4 billion funding increase to childcare subsidies. More worryingly, Labor would also intervene to raise the wages of early childhood educators by 20 per cent over the next eight years.
Government entering the private sector to top up wages is, as former Labor powerbroker Graham Richardson described it, a lousy precedent.
Labor tried this under the previous Rudd/Gillard Government; the Abbott government abolished it.
Funded to the tune of $300 million and dubbed the Early Years Quality Fund, its purpose was to deliver pay rises to 30 per cent of childcare workers.
The Auditor General found that the funding cap was reached within the first 13 hours of operation of the policy and it was, in many cases, being used to get more workers to join the union.
Auditor-General Ian McPhee said of the fund “It was obvious the money was going to run out quickly, and it did, and it was on a first come, first serve basis. “I think it is quite an unusual set of circumstances”.
The vast majority of the sector missed out on the funding because unionised facilities were given priority. Interestingly that in the same year that Labor introduced the scheme, the union, United Voice, tripled its donation to the Labor Party to $1.5 million.
Labor have not released details on how this new scheme will be administered. Will it be used as a tool to drive union membership? Will it again be granted only to unionised childcare centres? These are the kinds of questions we need answers to prior to the election.
In 2012, United Voice successfully lobbied the federal government to introduce a burdensome requirement that childcare centres be staffed by ‘qualified early childhood educators’. Now, unions like United Voice demand pay rises on the basis that childcare workers are ‘qualified early childhood educators’. Funny that.
Union demands for accreditation after accreditation for childcare workers have added additional complexity and red tape to the system, this is the key reason why childcare is so unaffordable and out of reach for many families.
In 2013, the Fair Work Commission dismissed the unions’ application for a 35 per cent pay increase, after more than 70 submissions and several hearings; because they failed to show early childhood educators were paid differently to men performing work of comparable value.
The unions’ attempted to argue for a pay rise on the basis that the sector was 97 per cent women and qualified early childhood educators earned as little as the half the average wage at $21 an hour.
The FWC argued that the union could have pursued their claim as a more conventional work value case. But no, they decided to point to manufacturing workers to prove men were paid more than women for doing comparable work.
This argument has been a pushed along campaign by Labor and the unions since then. In September 2018, when arguing in favour of more pay for childcare workers. Labor Shadow Minister for Education, Tanya Plibersek said, “A person with a Certificate 3 in Early Childhood Education (where about 98 per cent of workers are women) earns around $20/hour when someone with a Certificate 3 in Metal Work earns around $40/hour. That is gender-based discrimination”.
This is plainly wrong and a worrying statement for someone who aspires to be the deputy prime minister of Australia. A man working in childcare would also earn $20/hour, as a female working with Metal Work would earn $40/hour.
It is not gender-based discrimination when the pathways for education and the career are available to both men and women.
In addition, they are completely different jobs, metal work requires specialised skills, and is at times a hazardous and sweltering job. This is not downplaying the role of childcare workers and the great job they do. However, to compare both as equal work because they both require a Certificate 3 qualification is garbage economics.
However ridiculous the argument used by Plibersek, this is the logic used by Labor to promote their new childcare policy.
The cost of childcare has risen by over 300 per cent in the past 20 years – 3.5 times the rate of growth of average wages – this is largely due to red tape.
Throwing an endless amount of money at the sector will do nothing to improve quality or cost in the childcare sector. Cutting the red tape that has pushed up costs will go a long way to providing hard working parents with affordable childcare.
Evan Mulholland is Director of Communications at the Institute of Public Affairs.
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