CHAPTER 2
Key issues
Introduction
2.1
Research has shown that the first five years of a child's life are
critical to their learning and development.[1]
A high quality early childhood education system produces children who are
nurtured, happy, educated and ready for future schooling. Quality affordable childcare
also allows for increased participation of parents in the workforce.
2.2
The performance of the early childhood education and care sector is
underpinned by qualified and professional educators. The bill seeks to improve
the wages of these educators and increase professionalism of the sector.
2.3
Submitters were generally supportive of the government's investment in
the early childhood education and care sector and recent reforms including the
National Quality Framework (NQF). Many submitters supported the establishment
of a fund to pay for increased wages for early childhood educators in
principle, but some expressed reservations with the bill in
its current form.
2.4
This chapter discusses the key issues raised by submitters and witnesses
about the bill including: the eligibility criteria for grants; the size and duration
of the Fund; and the lack of detail about how it will be implemented.
The need for higher wages and greater professionalism in the sector
2.5
The committee heard that early childhood workers are hardworking,
passionate and dedicated to providing children with high quality care. Employers
and employees alike recognise that staff are critical to the quality of an
early childhood service; Mrs Gwynneth Bridge, President, Australian Childcare
Alliance, argued that 'a service is only as good as the educators it employs'.[2]
2.6
The committee heard that low wages is an ongoing issue in the sector
which impacts on the ability to recruit and retain staff.[3]
Educators are paid as little as $18.58 per hour to educate and care for
children under five years old.[4]
Mr Michael Crosby, National President, United Voice, pointed to statistics showing
that around 180 staff leave the sector every week.[5]
Ms Tamika Hicks, Member Organiser, United Voice Victoria noted that it is
particularly difficult for rural and regional centres to attract and retain
educators.[6]
2.7
The bill is designed to address these issues and support the
implementation of the NQF. There was considerable support for this objective;
for example Clarendon Children's Centre Co-operative submitted that:
We believe that government funding is necessary to support
professional wages for early childhood educators and we applaud this initiative
which will assist services to provide affordable, high quality education and
care for babies and young children.[7]
2.8
Some submitters saw the Fund as a logical extension of the NQF; for
example KU Children's Services described the Fund as evidence of the
government's 'further commitment' to the Framework.[8]
Mission Australia similarly argued the Fund is 'an ideal way to support the
Government's ongoing investment into early childhood education and care'.[9]
2.9
Not all submitters were convinced the bill would achieve its intended objective.
The Australian Childcare Alliance (ACA) argued the bill would not 'enhance
professionalism in the sector nor will it improve attraction and retention of a
skilled and professional workforce'.[10]
The eligibility for grants from the Fund
2.10
The issue of eligibility raised a number of concerns, particularly in
respect of multipurpose services who offer long day care and
out-of-school-hours care – meaning some staff would be eligible and for the
wage increases and others would not.[11]
However, the committee heard evidence that there is already a 'clear salary
differential' between preschool teachers and long day care workers.[12]
Ms Verena Heron, Industrial Officer, Independent Education Union,
argued that the pay rises should not create confusion or disputes amongst
employees of the same organisation provided it the measure is communicated
appropriately to ensure that 'those teachers who are not receiving it are aware
of where the money comes from and why it is there'.[13]
Requirement to have an enterprise
bargaining agreement
2.11
While not specified in the bill itself, grants from the Fund will be
conditional on 'wage increases being included in an enterprise bargaining
agreement'.[14]
The committee heard evidence that there is currently a low proportion of
services with an enterprise agreement in place. Early Childhood Australia
estimated 90 per cent of services in the early childhood and care sector do not
have an enterprise agreement.[15]
The Department of Education, Employment and Workplace Relations (DEEWR)
provided evidence that there are currently 102 child care enterprise
agreements.[16]
2.12
Some submitters argued this requirement disadvantages small providers
who do not have professional human resources staff or ready access to
industrial advice. Early Childhood Australia submitted that:
The majority of early childhood services are run by small
organisations with just one or two centres. There is limited capacity for
managing an EA bargaining process and limited sources of advice or assistance
with this.[17]
2.13
This view was supported by larger providers. Mission Australia
acknowledged the requirement would 'disproportionately benefit larger providers
– such as MAELS [Mission Australia Early Learning Services] – who have
Enterprise Agreements (EA) and HR personnel in place' and recommended removing
the requirement to ensure equity.[18]
2.14
However, the committee heard evidence from DEEWR and union
representatives that wage increases need to be linked to enterprise bargaining
agreements in order to guarantee the funds go to employees. Mr Michael Crosby,
National President, gave the example of funding being provided for aged care
worker pay increases that was not passed on to employees:
The best evidence of what happens when you do not link it to
an enterprise agreement came in the Howard years. When the Howard government
made money available to the aged-care sector to increase what were, again,
shamefully low wages, in the end, because it was not linked to an enterprise
agreement, none of it went through into wages.[19]
2.15
The Independent Education Union agreed that including the increases in
an agreement was the best way to assure the money is used for salary increases.[20]
DEEWR advised the committee that including the wage increases in an enterprise
agreement gives employees a 'statutory, enforceable right' to those increases.[21]
Mr David De Silva, Group Manager, explained that employees are not party
to standard funding agreements for grants; they are agreements between the
Commonwealth and employers.[22]
2.16
This means that if an employer spends the grant on something else, the
employee has no way of enforcing payment of wage increases. Ms Jennifer Taylor,
Deputy Secretary, explained the employee's difficulty in such a case:
...the employee has no opportunity to redress an underpayment
of wages in that situation, where it is under a grant, because they are not
party to the grant. Their redress would be in the repayment of money to the Commonwealth...but
under an enterprise bargaining agreement or a modern award the employee has
opportunity for redress through the Fair Work Ombudsman for those wage
increases not being passed on.[23]
2.17
DEEWR clarified that services do not have to have an enterprise
agreement in place when applying for the grants. Funding can be approved on the
condition that you intend to enter an agreement, and the money will be paid
once the agreement is in place. If agreement is not reached, money is not paid.[24]
Employers who already have agreements in place will not be advantaged in the
application process; there will be no prioritisation of applications according
to what stage in the process employers are at.[25]
2.18
DEEWR's submission clarified that union membership is not an eligibility
requirement for the funding. Similarly, it is not a requirement for employees
of a service 'to be members of a union in order to negotiate an enterprise
agreement'.[26]
Committee view
2.19
The committee notes that union membership is not required to access
grants from the Fund, nor would this be appropriate.
2.20
Including wage increases in an enterprise agreement is the only way to
guarantee that funding provided to employers will be used for wages. It provides
employees with an enforceable right to their wage increases, and gives them a
means of redress should the employer do the wrong thing. Commonwealth funding needs
to be used for its intended purposes, and the use of enterprise agreements will
ensure this occurs.
2.21
Finally, the committee supports the rights of workers to bargain
collectively; there is nothing improper about employees working together to
campaign for better pay and conditions. Unions have a right to increase their
membership to strengthen their bargaining position and provide better representation
of the sector.
The size and duration of the Fund
2.22
The bill would provide the fund with $300 million over two years,
however submitters and witnesses argued this was insufficient and would lead to
only a small part of the sector receiving increased wages. The committee was
informed that that the number of services able to be assisted under the Fund would
be dependent on the size of the services that apply and the number of qualified
educators those services employ.[27]
2.23
Some submitters argued that this creates inequity because only a certain
portion of employees in the sector will benefit from the Fund with estimates
varying from 27 per cent to 40 per cent of educators receiving funding.[28]
The Child Care Centres Association of Victoria argued that demand for grants
from the Fund will exceed availability:
All services may apply, but not all can be successful, even
if all meet the criteria. There is simply not enough money in the Fund if wage increases
as outlined by the Prime Minister are allocated to educators in the successful
services.[29]
2.24
United Voice acknowledged that the Fund is inadequate to fund the whole
sector, but argued that the measure was an important first step in a broader
campaign to improve wages in the sector.[30]
Committee view
2.25
The committee recognises concerns from submitters about the size and
duration of the Fund, however given the current fiscal climate, the amount
being committed by the Government is appropriate.
2.26
The committee supports the aim of professionalising early childhood
education and care and believes bargaining will ultimately drive higher wages
and greater productivity in the whole early childhood sector.
Administration of the Fund
2.27
Some submitters and witnesses expressed concern about the lack of available
information about how the Fund would be administered.[31]
DEEWR advised the committee that the program guidelines for grants, including
information about the eligibility requirements, assessment criteria and acquittal
processes, are expected to be finalised in July. Consistent with Commonwealth
Grant Guidelines, this information will be made public and normal acquittal and
reporting processes for successful applicants will apply. [32]
2.28
An Advisory Board has been established with key stakeholders to provide
advice to DEEWR on the 'content and operation' of the funding guidelines. The
Independent Education Union expressed concern about a potential conflict of
interest for members of the Board who are employers and may apply for funding.[33]
DEEWR advised that is the Board would only provide advice to the government on
eligibility requirements; the final content of the eligibility requirements is
a decision for government. The board would not have any input on deciding which
applicants are successful; the Department would hold the delegation to approve
applications and make this decision.[34]
Committee view
2.29
The committee is satisfied that the governance arrangements for the
Advisory Board are appropriate. The decision-making power would remain with
DEEWR and the Board would not make decisions about which services would be
approved for funding.
2.30
The committee trusts that DEEWR will provide timely and accurate
information to stakeholders about the administration and eligibility
requirements of the Fund.
Conclusion
2.31
The early childhood education and care sector provides a valuable
service to Australian society in caring for some our most vulnerable members.
Early childhood educators are hardworking professionals who deserve appropriate
remuneration for their important work.
2.32
The committee believes this bill will improve wages for early childhood
educators and help recruit and retain people in the sector. This Fund will
support the Government's broader objective of ensuring a high quality standard
of education and care of Australian children.
Recommendation 1
2.33
The committee recommends that the Senate pass the bill
Senator Gavin Marshall
Chair, Legislation
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