Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on the Early Years Quality Fund Special Account Bill 2013. Before I get to the specifics of the bill I would like to say what a wonderful job that the many childcare centres in the electorate of Hughes actually do. As a member, I have had the great pleasure to visit many of these childcare centres and participate in the activities with the staff: reading books to the kids, playing with them and enjoying their ice-creams at lunchtime. It was a truly wonderful experience. There is no doubt that we would like to see the staff at these centres earn more money, like we would many employees right across the economy.

However, the childcare centres I have been to say their biggest problem is with government regulation and red tape putting additional cost on those childcare centres. In fact, over the last few years under this government we have seen a 26 per cent increase in the cost in childcare in this nation, mainly because of the red tape this government has put in. When those costs increase and the costs to a childcare operator increase because of the red tape, that simply takes away their ability to pay their staff more wages. So the ability to pay the staff more wages, to get higher wages in the childcare centre, has been taken away by a lot of the red tape and new regulations we have seen this government introduce.

The legislation actually seeks to establish a $300 million fund to provide wage increases, which are estimated to go to only 30 or 40 per cent of long day care workers and only over two years. Also, centres will need to enter into an enterprise bargaining agreement with staff and meet the eligible criteria. Given this limited pool of funds, they will be allocated on a first-in basis and then after two years the workers will simply revert to their previous wage.

The coalition oppose this bill, regrettably. We would like to see childcare workers earn more money, take home more pay, but there are several reasons for opposing this bill. The first reason is this is $300 million worth of spending this government simply does not have. This is simply more spending that will be added to our nation's debt. In the first four years of this government we have seen the largest deficits in our nation's history, a cumulative $172 billion. Then we had promise after promise after promise of this year the budget being returned to surplus. Of course, we know that that $1 billion surplus is now, at last estimate, a $19.8 billion deficit. This $300 million for childcare workers simply goes onto that deficit. It is more money that we have to borrow. Ultimately, it is money that has to be paid back. In fact, it is actually the children at these childcare centres who will be burdened with this debt and who will be paying off this debt when they eventually get through school and get through university and start to earn dollars. Their taxes will be higher because of this government.

The other reason the coalition oppose this bill is that we looked at what industry has said. The Australian Industry Group, a group that represents 440,000 businesses and employs over 2.4 million people, said of this legislation:

… Ai Group expresses a strong view on the proposal to make funding conditional upon day care centres having an enterprise agreement. This proposal is unfair and inappropriate.

How can this government sit here and want to pass this legislation through the parliament when we have the Australian Industry Group saying categorically that this proposal is unfair and inappropriate? That alone is reason not to pass this legislation.

It will set two types of childcare centres: those that are unionised and those that are not unionised. The real concern is this funding is actually over only two years. The question is: what happens when those two years are up and this funding runs out? We are going to see a massive distortion in the childcare market with staff going from one centre to another hoping to get their hands on some of this money, which in two years is going to run out.

Another real concern is what has been told to some of the staff in the childcare industry, which makes it very clear that this money is more a taxpayer funded union recruitment drive. Workers have been told that if they do not sign up to the union they will not get a pay rise. We have seen employees signing up and then having to pay the union fees. They are committing to pay more than $500 a year to the union to sign up to get their hands on this taxpayer money, which the government does not have and is borrowing. We have seen some centres' managers being told that 60 per cent of their workforce must join the union in order for them to receive the pay rise. We have also seen in the Australian Childcare Alliance's submission to the House of Reps standing committee a statutory declaration to this effect. This is not something that the coalition is saying; this is something that the Australian Childcare Alliance has put in a statutory declaration to the committee.

Of course, we have seen a great deal of union propaganda about this, again a recruitment drive. We have seen under the heading 'How does my centre qualify?' the statement: '(1) join your union United Voice; (2) United Voice negotiates a new EBA; (3) the owner-operator signs the agreement with the government; (4) get a raise.' Of course, it does not say that you must pay the union fees along the way. It does not say that this money is borrowed money. And it does not say this money will run out after two years. This is typical of this government: bad legislation done to support their mates in the union rather than doing what is in the best interests, the long-term interests, of the nation.

The Australian Industry Group have also put forward 10 separate points about their objections to this legislation. I would like to go through each one of those. The first is that this requirement will simply remove the ability of a childcare centre to freely choose whether an enterprise agreement suits its business. We should be giving the childcare centres the ability to choose which way they want to operate, but this forces them down the track of going into an enterprise agreement. The second reason given is that a childcare centre could feel coerced to make an enterprise agreement, regardless of whether the business is happy with its pay-setting arrangements. Again, it reduces the individual ability of a childcare centre to determine what is best. The third reason given is that employees of a childcare centre could feel coerced to make enterprise agreements, regardless of whether the majority of employees of that centre support the negotiation of a collective agreement.

The fourth reason given is the requirement may lead to a childcare centre breaching section 344 of the Fair Work Act, which prohibits an employer from exerting undue influence or pressure on an employee to make an enterprise agreement. In fact, the Fair Work Act 2009 outlaws the taking of an adverse action against a person simply because that person has or has not exercised a workplace right. Sections 340 and 341 include the right to make or not to make an enterprise agreement. The act also outlaws action taken against another person with the intent to coerce the other person to exercise or not to exercise that right. It is clear that what is going to happen is there will be coercion in this industry because of this money, the $300 million thrown in, to force and coerce workers to sign up to enterprise agreements to try and get their hands on these funds for two years whether they like it or not.

The fifth reason the Australian Industry Group have given is that enterprise agreements typically reduce the ability of an employer to pay employees different salaries based on individual performance, a pay-setting system which many employees strongly support. I am sure there are many childcare centres around our nation today that have different salaries based on different individual performance. That encourages greater participation, higher levels of productivity and greater work ethic. But this legislation threatens to take away that ability. The sixth reason given is that, if a childcare centre decides not to have an enterprise agreement, it is going to experience greater difficulties in attracting and retaining staff, because the centres with enterprise agreements would be able to pay higher rates of pay due to the funding. We are looking at having a two-tiered system. We are going to have the potential of good staff at one centre being attracted to another centre for no other reason than the one centre has been handed out government money and the other has not. This is not good policy.

The seventh reason is that, if employees in a childcare centre are not willing to enter into an enterprise agreement, say because they prefer the existing pay-setting arrangements, the employer would experience greater difficulties in attracting and retaining staff. Again, this is likely to damage many of our childcare centres. Yes, it will be good for the 30 per cent to 40 per cent that get their hands on this pot of borrowed money that runs out in two years, but the other centres, the 60 per cent that will miss out on this pot of money, will be put at a competitive disadvantage and they will have difficulty retaining and hiring staff. That has the potential to cause damage to our childcare centres, not improve them.

The eighth reason given is that if a childcare centre decides not to have an enterprise agreement it may need to raise its prices to attract and retain staff, given the higher pay rates offered by centres which receive funding, creating hardship for parents. That is exactly right. If we have two centres in one suburb and one is unionised, so they get their hands on this pot of money, and the other centre is not, how will that centre retain its staff? It might have to lift its wages. Deputy Speaker Georganas, you might say that could be good, but we must think of the hardship for parents. If we raise our childcare fees, it would be wonderful if we could pay them. Someone has to pay for this at the end of the day. If we lift the cost of child care in this nation then what happens? It is the parents from the most disadvantaged backgrounds and the people from the lowest socioeconomic areas of our nation who have difficulty in paying, and they miss out on getting child care altogether. What looks on the surface like a great, wonderful and generous idea, if it leads to this happening, will price many parents out of child care.

Parents across our nation today are really struggling with the cost of living. Next week they are going to be slugged with an increase in the carbon tax of five per cent. They are going to see their electricity prices hit again. The last thing they need is a government policy that is going to further lift the cost of child care and make it difficult. How will that help any of the kids in our nation?

The ninth reason that they give—a very good reason—is:

Concerns have been expressed to Ai Group by employers in the child care industry about the complications which are likely to arise when the funding is exhausted. Childcare centres may not be able to afford to continue to pay the higher wage rates without increasing prices.

Again, there are two things that could happen: we are building in a price increase in the childcare industry or we are going to create a situation where people go into the childcare industry, take some of this pot of money and when that pot of money runs out in two years they are likely to leave the childcare industry and look for jobs with equivalent wages. This is a bad bill. The coalition rightly opposes it.

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