ISSUES: ABC Learning Centres; Rio Tinto; Economic Security Strategy
STEVE PRICE: The Deputy Prime Minister, Julia Gillard, joins us on the line. Thanks for your time again. I appreciate it.
JULIA GILLARD: Good morning, Steve.
STEVE PRICE: Child care—we now have taxpayers put in $22 million and $34 million, so that’s $56 million, with March 31 as a shut-off date for those centres placed on the dubious list. What happens after that?
JULIA GILLARD: In the time between now and the 31st of March, we’re going to work through the many expressions of interests that have already been received. We’ve had community organisations, local council and others step forward and say that they’ve got an interest in running child care. We’ve got to remember that the 241 who are on this list are centres that the receiver of ABC Learning says aren’t viable under the ABC Learning business model. But that doesn’t mean that in other hands under a different model that they couldn’t be run as perfectly sustainable child care centres in the future. So we’re going to work through the options there
STEVE PRICE: All right, I’ll talk to the receiver in a moment. But on that point, there are some incumbencies on those centres, because they’re ABC, that are holding them back - is that what you’re saying?
JULIA GILLARD: No, the ABC business model is obviously a for-profit model. It’s …
STEVE PRICE: But aren’t there contracts that are tied to those centres for things like cleaning and toys that make them more expensive to operate than if you were starting it from scratch?
JULIA GILLARD: Well, you’d need to talk to the receiver about all of those interconnections. But I understand what you’re saying, Steve, that there are some things about the way that ABC ran its business and who contracted to it and who provided services which are all about the ABC business model; whereas, if you walked into that child care centre and started afresh, if I can use that terminology, you might have a different way of running it that makes it sustainable.
STEVE PRICE: To the taxpayers, $56 million is a lot of money. What makes child care different, say, from a group of car parts manufacturers?
JULIA GILLARD: Well, I think child care is different. We know child care is a highly subsidised government program anyway. Each and every year taxpayers put about $2.5 billion into supporting child care. And the reason we do that is because child care is vital to letting mums and dads get to work. It’s vital to the care of young kids in our society and so I think it’s different than, you know, many other businesses. One of the things that we’ve been driven by in all of this after the ABC Learning collapse is to get parents the maximum amount of information because we know they’re anxious, but also to get them the maximum continuity of care possible, because it can be the difference between people being able to hold their job and still go to it or really, you know, being forced out the workforce. We understand that it’s that vital to people.
STEVE PRICE: I guess you see my point. What’s to stop other businesses come knocking on your door, saying ‘we’re about to fall over as well because of the global meltdown. We need help’?
JULIA GILLARD: Well, we made it very clear at the time that we made the first government assistance available to keep child care centres running, that we viewed the ABC situation as a unique one. Child care is a very different service to a lot of other services in our society. It’s vital to working mums and dads and getting to work. And we were talking with ABC Learning about the biggest child care business in the country—more than 1000 centres—so Australians around the country touched by the problem with ABC Learning. We think that makes it a unique situation. And I do want to stress, because I think from time to time there’s been a little bit of confusion about this, not one government cent is going to the owners and operators of ABC Learning.
STEVE PRICE: Well, I’m pleased you raised that. I mean, how angry are you that a spiv like Eddy Groves was allowed to basically take over child care in Australia?
JULIA GILLARD: Well, I’ve been very critical of the former government for letting the market rip in child care. The former government uncapped the number of child care places. Now, that wasn’t an error because people needed child care places. What was an error was taking the cap off and then just walking away and seeing what the market was going to do with this sort of newly emerging industry. And we’ve also said with the ABC Learning situation, the market was allowed to rip and it was allowed to rip in circumstances where our competition law didn’t prohibit what are called ‘creeping acquisitions’. It’s a weird term but it’s basically about a big business continuing to get bigger and suppressing competition by gobbling up smaller businesses around it, and certainly ABC Learning had an aggressive acquisition strategy.
STEVE PRICE: How can you be convinced not one dollar gets back to businesses associates of Eddy Groves?
JULIA GILLARD: Because we know exactly what this money is going for. We’ve got an arrangement with the receiver. The arrangement with the receiver means that …
STEVE PRICE: Well, if Chris Honey’s listening, so I’ll ask him in a moment.
JULIA GILLARD: He will say the same thing as me, which is we extended up to $22 million to keep centres running until the 31st of December. Our money is going to make up the difference between the running costs of those centres and what they are earning. We will get full accounting of that from the receiver. So it’s been about keeping those centres in operation—not getting money to Eddy Groves or anybody else associated with the ownership of ABC Learning.
STEVE PRICE: Are you confident of that?
JULIA GILLARD: 100 per cent.
STEVE PRICE: KU Children’s Services, community child care operator, have said on ABC radio this morning that you might have to prop up the 241 for decades.
JULIA GILLARD: Well, I don’t agree with that. We are there saying we can prop these centres up. We will continue to make government funds available until the 31st of March next year. We’ve picked that timeframe because it gives us time to work through the many expressions of interest that have already been received, from the community organisations, local government and others around the country.
STEVE PRICE: This is a difficult question—I had a couple of calls to our breakfast program this morning from women suggesting that there are some families that put children into child care where the women are not out in the workforce, and the callers were suggesting women turning up in their tennis gear or gym gear and dropping the kids off for a day or two days. Do we need to know more about what children are in child care or is that an unfair request on people?
JULIA GILLARD: People are entitled to child care benefit for a limited amount of care even when they’re not in the workforce. And people obviously use child care for a variety of purposes apart from supporting being in the workforce and, you know, there are all sorts of …
STEVE PRICE: Are you relaxed about that?
JULIA GILLARD: Well, I am relaxed about that and I’m not going to make judgements about how families organise themselves. Families have to organise themselves in a million different ways; probably every family organises itself differently from the family next door.
STEVE PRICE: So if people are prepared to pay, that’s no problem?
JULIA GILLARD: Well, that’s right. The system enables that to happen and people need child care for all sorts of purposes
STEVE PRICE: Quick question with your employment hat on, Rio Tinto overnight announced it will cut 14,000 jobs worldwide; they employ 17,000 people in Australia. Are you going to ask the company for some detail and some guarantees on numbers in Australia?
JULIA GILLARD: Look, this is certainly bad news, and for any Australian to be facing a job loss is very, very tough news for them, particularly in the run up to Christmas—bad news any day of the year, but particularly bad news in the run up to Christmas. Obviously we will be talking to Rio Tinto making sure that people get their entitlements. We are there doing support for people who find themselves out of a job.
One of the things that we’re doing is making available training places, our productivity places—that’s all about skills for work. And what we do know in our economy today is whilst many businesses are facing problems from the global financial crisis, and Rio Tinto has certainly said that its problem flowed from the global financial crisis, there are other employers who still want skilled labour and one of the things we want to make sure is that there’s training available to get people those vital skills that are in demand.
STEVE PRICE: It doesn’t fill us with great confidence does it though, when the world’s second biggest miner’s got to carve that deeply into the workforce.
JULIA GILLARD: Well, we’ve always said as a Government that the global financial crisis wasn’t going to leave Australia immune—it was going to touch our economy. This is a huge contagion through financial markets and around the economies of the world. Rio Tinto in its statement has said that this is a problem that they face stemming from the global financial crisis. It’s going to put pressure on people. It is putting pressure on people.
As the Australian Government faced with this global crisis, we’ve responded with our Economic Security Statement to stimulate the economy—that is about protecting and creating jobs. The extra money at COAG assists with protecting and creating jobs. The $300 million we had made available to local governments about, you know, jobs around the country. And obviously the Prime Minister has foreshadowed an infrastructure package, which is about the vital infrastructure we all need and rely on, but obviously building infrastructure also creates jobs.
STEVE PRICE: Just finally, Malcolm Turnbull today here and Tony Abbott to me yesterday again repeated their call on the Government. They say you should be giving people tax cuts, not one-off bonuses. They’re not supporting, now it would appear in unison, the actions of the Rudd Government to pay out of the surplus, the one-off bonuses to the pensioners, and to the people to on Family Tax Benefit A.
JULIA GILLARD: Well, look, they’ve been all over the shop about this and have different positions from day to day. I accept, Steve, your summary of what they’re saying now. But the perspective the Government took is we had to act decisively. We had to act decisively to stimulate the economy; to do what we could to keep this nation in front as the global financial crisis shook the world. We believe that the fast way of doing that, of keeping this country in front, was to get money into the hands of people who needed it. We knew pensioners needed it, families with kids needed it, and we’re delivering the bonuses that people are receiving now. We think that’s right for the individuals and families who are benefiting and it’s right for the economy.
STEVE PRICE: Thanks for your time, I appreciate it very much.
JULIA GILLARD: Thank you.
STEVE PRICE: Julia Gillard there, Deputy Prime Minister and Education Minister.
ENDS