I rise to support the Wage Justice for Early Childhood Education and Care Workers (Special Account) Bill 2024, which creates grants for early childhood education and care providers to support a wage increase for their workers. I want to talk about why accessible, quality childcare is important for kids and families, why it's important that we pay childcare workers better, the structure of the bill and some concerns with it, and further reform that is needed.

Child care is important for both kids and families. For kids, quality early childhood education is linked to improved academic achievement, reduced delinquency, increased school completion, higher earners in adulthood and improved social and emotional wellbeing. Children from lower socioeconomic groups experience greater and more enduring benefits from early childhood education than children from higher socioeconomic groups. For families, greater access to quality early childhood education and care increases female participation in paid work.

I've heard a range of views about the modelling done by the Productivity Commission in relation to the impact of greater access to care on female workforce participation. From personal experience, I wouldn't be surprised if this impact was understated in the PC modelling. Anecdotally, mums I know make decisions about returning to work based on the care that's available and it's cost. Having had kids in every combination of childcare options when they were small while I worked part time, I remember being asked to come into work for a meeting on a day when I was scheduled to be at home. If I was lucky enough to be able to add a casual daycare day, it cost me more than $100 per kid. I wasn't paid anything extra to come in on that day, so it cost me a lot to be flexible. Even in a well paid job, it was sometimes only marginally financially beneficial to work.

I also know how much my kids gained from the stimulation of being in centre based care and how important the workers there were to their development. Educators at my kids' childcare centres taught them things that kept surprising me as a parent. They came home with new knowledge, new ways of resolving conflict and the inevitable new viruses to build up their immune systems.

Childcare workers are underpaid. About 221,000 people are employed in the early childhood education and care sector. Like other professions traditionally considered women's work, we've systematically undervalued child care. The Productivity Commission has found that early childhood educators are just above the lowest paid decile when measured against other occupations. Early childhood education and care workers are paid less than people in other sectors with similar qualifications and are paid significantly less than primary and secondary school teachers, even though the years before a child turns five are a crucial time for learning. All you need to do is spend a few hours in a childcare centre, and you realise how underpaid educators are. They need to have patience, compassion, curiosity and good immune systems to do those jobs. We need to attract people to work in child care. It's such an important time for our kids' learning.

I'm very proud that my son, George, who's studying astrophysics at ANU, is also working part time in child care. He loves it. He loves helping kids learn how to solve problems and sharing the wonder that he finds in the world with them. Child care needs more people like George, and paying them a decent wage is a good start to attracting a vibrant and diverse workforce. I recognise that there's an inherent tension between improving access to early childhood education, and care for more people, and paying childcare workers more. Centre based day care in Australia is relatively less affordable for Australian households than in most other OECD countries. Obviously paying people more makes child care more expensive indirectly, but a pay increase recognises the inherent value of this type of work, attracts more people and contributes to the quality of care. It's worth noting that the proposed wage increases fall short of the union's calls for a 25 per cent wage increase but are a significant step up.

The structure of this bill is a bit clunky. It creates a special account to fund grants to early childhood education and care providers to support a wage increase for their workers. To be eligible, providers will need to increase workers' wages by 10 per cent above the current award in the year of payment and 15 per cent above the current award in the second. Providers will need to limit fee increases a maximum of 4.4 per cent in the first year and meet other conditions. I understand it's been set up like this to ensure funding allocated goes directly to workers and not to providers' bottom lines.

There are four issues with the bill that I want to comment on: it's inflationary impact, the lack of allocated funding, its short-term nature and the discretionary powers that it creates. Firstly, will this bill have an inflationary impact? Based on modelling, it could, effectively, be an injection of $3.6 billion over the next few years. Some providers may not take it up if they're already paying above the award, if they don't want to agree to the cap on fees, if they don't have an appropriate workplace instrument or if theirs covers more than the specific types of workers eligible for the grant. Of course, the extent to which it's taken up is correlated to its inflationary effect. I am concerned about any injection of funds that could be inflationary at this time, when inflation is having such a huge impact on cost of living.but childcare workers are some of the lowest paid workers in the country. In a budget of more than $600 billion, it seems reasonable that we should be able to find a few billion to pay women well and value our children's early education. I am concerned that there's no allocation of funds for this special account, despite the estimated cost of the grant program being $3.6 billion for the next few years. We'll have to wait for the annual appropriations bill to see how much money is put into this account, but the giving of grants is not dependent on funds being put into this account.

It's possible that the payments have been set up through this special account as a way of making it harder for an alternative government to take the pay rise away from childcare workers if the government doesn't win next year's election. But setting this up without allocating funds does feel like kicking the can down the road.

My last concern is in relation to the short-term timeframe. The bill is hazy about what happens after the first two years. The worker retention payment is considered an interim payment while the Fair Work Commission finalises its gender undervaluation review of priority awards and the government considers the recent ACCC and Productivity Commission reports on early childhood education and care. If the government wants to see long-term structural reform to pay feminised industries better wages and drive a long-term improvement in the quality of care, the government will need to come clean about how it would fund this in the long term. If this increase is not going to be paid through higher fees in the long term, we need to have an open discussion about the social and economic benefit of high-quality early childhood education and care. Without the support of the coalition, this may go the way of the similar Early Years Quality Fund, which was ended with Tony Abbott not supporting that program.

Another concern is the broad discretionary powers created. The government can make grants and there isn't much guidance on the use of these powers in the legislation. I am hoping that these and other issues are addressed in the Senate Education and Employment Legislation Committee's report, which I believe came out today.

Beyond the changes made in this bill, further reform is needed. There is some momentum towards creating universal access to quality early childhood education and care. This is obviously a big change and would require a pathway to get there, but it's the sort of bold thinking that has the potential to set us on a pathway to a better educated and are more fully productive population. I recognise that this would require nearly 50,000 early childhood education and care graduates a year by 2030, more than double recent graduating numbers. This will take time, but it seems to me to be the right direction.

The other reform needed is in relation to the activity test. The activity test is based on an assumption that early childhood education and care is a benefit for parents, not for kids. Recognising the benefits for kids, especially from lower socioeconomic families, leads to the conclusion that reforming the activity test would have long-term benefits. I would like to see the activity test removed, relaxed or substantially reconfigured in line with recommendations from the Productivity Commission, the Women's Economic Equality Taskforce, the ACCC, Thrive By Five and Early Childhood Australia.

In conclusion, I support this bill as one step towards quality, accessible and affordable early childhood education and care. Early childhood education and care is important for kids and families. Like workers in many traditionally feminised industries, childcare workers are underpaid. We need to attract a quality workforce to educate and care for our kids, and paying them better is a good start. There are a few issues with this bill that I hope are addressed in the current Senate inquiry. In particular, the bill takes a short-term approach and doesn't allocate money to the special account being established, so it's kicking the can down the road on longer term reform and costs. The broad powers in the grant-making laws leave a lot to the government's discretion. So it's appropriate that the bill be reconsidered in a few years in light of a number of reviews currently underway.

While you couldn't say that the bill will have no inflationary impact, increasing the pay for our lowest-earning women seems an appropriate decision. Having more women here in parliament means that we are starting to correct the long-term gender bias in how we value different types of jobs. Paying childcare workers better is a good step, but I urge the government and the opposition to be bold in thinking about universal childcare access as a step to a better educated population and greater workforce participation for women.