STEVE PRICE: Retooling after WorkChoices are at the heart of the new government and the Deputy PM, I think, is in Darwin today is on the line. Good morning to you.
JULIA GILLARD: Good morning Steve, and I am in Darwin.
STEVE PRICE: Can we start with childcare if you don’t mind …
JULIA GILLARD: Sure.
STEVE PRICE: … and the collapse of ABC Learning and now the largely NSW-based CFK. You consider, don’t you, child care to be an essential service?
JULIA GILLARD: It is an essential service for mums and dads who make their work arrangements around child care, so they obviously need to know that those arrangements are there for them so that they can get to work.
STEVE PRICE: So CFK is no less essential than ABC?
JULIA GILLARD: We’re in urgent discussions with the administrator of CFK. It’s now less than 48 hours since they announced that they were going into administration. We obviously want to make sure that there are arrangements for mums and dads that they can rely on, and I was very keen to reassure people yesterday that child care centres in this country can’t close without giving 30 days notice. I was worried that mums and dads were thinking to themselves, ‘Gee, the CFK centre that I rely on might be closed in 24 hours time.’ That isn’t going to happen.
STEVE PRICE: You’ll have to give the money though to CFK won’t you, because it is no different from the ABC collapse and model?
JULIA GILLARD: Well, we’re having urgent discussions with the administrator. We’ve got to do that to get to the bottom of what has gone on here with CFK, what its financial circumstances are, what it is doing in terms of a transition with these child care centres—so we need a little bit of time to do that work. We are doing it on an urgent basis.
STEVE PRICE: You say owing the NAB $8 million or $8.5 million, $4 million to Macquarie Bank, they’ve got 45 odd centres here in NSW and their problems, as I understand, are largely as a result of a takeover bid by ABC. So you’ll have no choice will you but to prop them up, because if you prop up ABC you can’t be propping up one brand of child care and not the other.
JULIA GILLARD: Well, Steve, I really can’t give you any other answer than I have given you. Can I say about ABC Learning, we did act very quickly to make available to the receiver up to $22 million to keep centres going ‘til 31 December, so we would be in a position to announce full transition arrangements so everybody would know what is going on in 2009. Now ABC is the biggest provider of child care in this country—more than 100 000 kids in care—so we took that step.
We will now fully investigate the CFK situation. We’ve got people on it. We’ve had them on immediately working out 1) what has happen; but 2) what is going to happen next with these centres. And when I’m in a position to give people better information, I will. We’ve been very clear through all of this—ABC, CFK—that we want to make sure that people have got the best information available to them. As soon as we know, we’ll make sure mums and dads know, and we have a dedicated information hotline, 180 2003, to get people information, and we’re regularly updating the www.mychild.gov.au
STEVE PRICE: I don’t want to ask the same question a million ways, but if CFK needs money to keep the doors open, they’ll get it will they?
JULIA GILLARD: Steve, we are doing exactly what I said we’re doing, we’re finding out full facts of this situation and really that’s all that I’m in a position to say this morning.
STEVE PRICE: Putting cash into business like ABC and CFK—there has been criticisms that these are privately-run enterprises, they’re out there in the market and the market will decide whether they can survive or fall over. Isn’t it a dangerous precedent to be putting taxpayers’ money into such businesses?
JULIA GILLARD: I’m glad you’ve asked me that because I think that there’s a misconception here publicly and that gives me an opportunity to clear it up. The Government has not put any money into ABC Learning. We’ve not put any money into ABC Learning.
STEVE PRICE: So where’s the $22 million?
JULIA GILLARD: It’s gone, or it’s available for the receiver of ABC Learning. So when a business gets into the kind of trouble ABC Learning did, it firstly declared it was going into voluntary administration, then its creditors said that they would put a receiver in charge of the business. A receiver is a professional person who comes in with all sorts of legal obligations to manage the business and to deal with transition arrangements in the business, and obviously, to see if there is money available to repay the creditors’ debts. We are dealing with the receiver and we have made available the up to $22 million to the receiver so it could stay open.
STEVE PRICE: So none of that money will go to creditors?
JULIA GILLARD: None of that money will go to creditors.
STEVE PRICE: That’s the distinction there, isn’t it?
JULIA GILLARD: None of it will go to creditors and …
STEVE PRICE: This is operational money for the receiver?
JULIA GILLARD: That’s right, none of it will go to creditors, none of it will go to the directors or shareholders of ABC Learning. It’s not an injection, it’s ABC’s …
STEVE PRICE: So it’s not going to go to Eddy Groves to buy a new Porsche or pay for his yacht to be moored up at Versace? I mean it’s an important point isn’t it, I’m making light of it, but it doesn’t go to him. It doesn’t go to your other critic in this—the man who owns 1, 2, 3 careers, Don Jones—none of that money that you’ve put up goes to them?
JULIA GILLARD: Absolutely right, Steve. That’s an absolutely correct summary.
STEVE PRICE: So the crunch time comes when the $22 million operational cash runs out, what happens?
JULIA GILLARD: The receiver worked with us in the early days to come up with a reliable estimate as to how much it would cost to keep all of the centres open ‘til 31 December. That reliable estimate was up to $22 million and that’s what we’ve made available, so …
STEVE PRICE: Beyond that?
JULIA GILLARD: Well, we’ve said beyond that that we would make a statement soon as we could. We said we would make it in December but we’re obviously aiming to make it as soon as we can to give people full information about what is going to happen in 2009.
STEVE PRICE: So I don’t expect you to be across all this detail but, given that you’re in Darwin, but you’ve not had one child care centre operated by ABC or indeed CFK give the 30 day warning they’ll shut.
JULIA GILLARD: Not as I’m advised, no. Certainly not ABC Learning—we’ve made arrangements they’ll all be open ‘til 31 December. I do not believe that anybody at CFK has given the 30-day warning bell.
STEVE PRICE: You’ve made the comment; I think it was your quote that ‘the Howard Government let the market rip.’ Is that right?
JULIA GILLARD: Yes, it is.
STEVE PRICE: So where was the ACCC in all of this? Because obviously these business models are flawed and the market did rip, and indeed, what ABC done is rip up a whole lot of cash. I mean the market model is flawed, isn’t it?
JULIA GILLARD: The ACCC was on the job here with ABC Learning, but …
STEVE PRICE: Sorry, how would they let ABC take over CFK, or many of their centres?
JULIA GILLARD: Yeah, I can explain that. The ACCC for a long period of time now has been calling for additional powers to deal with what’s called ‘creeping acquisitions,’ which is kind of a funny term—creeping acquisitions—it makes you think of insects slithering across the floor. But what creeping acquisitions mean is you’ve got a big company that is slowly gobbling up individual little companies.
The ACCC at the moment doesn’t have good powers to deal with that, so if one big company is buying another big company, it’s got powers to deal with that because of the competition effects. But if it’s happening slowly, hence the word ‘creeping,’ sort of small company by small company, they don’t have full powers to deal with that. They’ve been calling for them, and my colleague Chris Bowen is dealing with getting the ACCC those additional powers to deal with creeping acquisitions. So that’s kind of the competition policy point.
The broader child care system point is the Howard Government uncapped the number of child care places. Now I’m not critical of that because more mums and dads needed child care, but that was obviously going to make the system a much bigger system. We were obviously going to see big growth. We were going to see growth amongst private operators, and in that setting, I think at the same time the places were uncapped, the then government really needed to take steps to manage this market and they weren’t taken.
STEVE PRICE: Should child care by run by government at non-for-profit given how important it now is to working families in Australia, because most people have some exposure to child care at some time?
JULIA GILLARD: Well, I do think it’s important to recognise that there are people in this country who run child care centres, maybe one or two of them, as a business. That is, they are running them to make a profit and they do it well and those centres are perfectly stable, and they’ll be there this year and they’ll be there next year and they’ll probably happily be there in 5, 10, 15 years time, so …
STEVE PRICE: But CFK was losing $40 000 a month.
JULIA GILLARD: Yes, but there are …
STEVE PRICE: It’s $100 000 a week!
JULIA GILLARD: Yeah, but Steve there are people around this country who run child care centres on a basis for profit. There are people …
STEVE PRICE: Well, these people were supposed to be experts, Deputy Prime Minister. They’ve got no bloody idea.
JULIA GILLARD: Well, obviously that’s a comment about CFK. The comment I’m making is about our child care system generally, and if we look at our child care system generally, there are people in this country who run centres. Some of them run them for profit to make money, some of them run them as community organisations on a not-for-profit basis, and they do it well and they haven’t got into any trouble. They’ve haven’t gotten into the any kind of trouble that ABC Learning or what CFK got into.
Now, what I’m saying about child care is we do need to strongly manage all of this—it’s such an important service. That’s why from the very first days of this Government, we’ve been in the business of getting National Quality Standards—there aren’t even National Quality Standards for child care; a National Workforce Plan—because well before all of this there were many places in the country that were crying out for qualified child care workers and couldn’t get them; a plan to bring child care to areas that need it that don’t have it; and a way of ensuring the development of this system’s stable.
So I understand concern about big corporate players like ABC and we’ll be responding to all of that, and Chris Bowen’s amendment on creeping acquisitions is part of that. But the job now is to deal with the ABC situation, deal with the CFK situation, do what we’ve promised, which is give certainty through the National Quality Standards, through the National Workforce Plan, and through bringing centres to areas that simply don’t have them and need them.
STEVE PRICE: A couple of other quick issues, I know you’ve got to go. The Reserve Bank boss, Glenn Stevens, here’s a little of what he said overnight.
[Glenn Stevens audio plays] “The biggest mistake we could make, I think, would be to talk ourselves into unnecessary economic weakness. We ought to go forward with some quiet confidence, both in our own abilities and in the opportunities which are on offer.”
STEVE PRICE: He later comments on the broader economy. That’s a bit hard though when people are losing jobs, isn’t it, to talk with confidence?
JULIA GILLARD: It’s a very difficult time and obviously for people who are caught up in it and lose a job, it’s an extremely pressurised time on them and their families. What the Government’s been saying to the Australian people is we’re not going to be immune from this global financial crisis which started in the US but has enveloped the world. We’re not going to be immune from it, but if you need to be anywhere during the global financial crisis, Australia is a good place to be. We’ve got strong …
STEVE PRICE: Unless you work for Babcock & Brown who are going to sack 850 people between now and Christmas.
JULIA GILLARD: Yeah, but Steve we’ve got … I mean, critically different form what has happened in the US. We’ve got strong, well-regulated banks and financial institutions. We come off a base where our economy has been growing strongly. We had a big budget surplus, so that means we’ve been able to deploy it our Economic Security Statement as an investment to keep our economy strong. Lots of other nations that are grappling with this crisis—the US, the UK, Japan, nations in Europe—don’t have the kind of advantages and abilities that this nation has with strong, well-regulated banks, a budget surplus that can be used to invest in the economy. So, times are tough …
STEVE PRICE: Do you still think we will avoid a recession?
JULIA GILLARD: Well, we’re doing everything we can to keep the economy growing. That’s what the Economic Security Statement was about; it’s what our investments in infrastructure will be about.
STEVE PRICE: Do you think you’ll have to spend more than the $10.4 billion?
JULIA GILLARD: Well, we spent the $10.4 billion. We very recently, earlier this week, invested in infrastructure through local government. The Prime Minister has indicated that our nation building plans will be fast tracked, and we will make more announcements about that in December. And we will continue to keep a very, very, very close eye on everything to do with the economy and we are standing ready to act and we will do what we need to keep the economy growing.
STEVE PRICE: Are you worried about job losses?
JULIA GILLARD: Oh, of course I’m worried about job losses, and because we’re worried about job losses, one of the things that we did in the Economic Security Statement was invest in another 56 000 training places, trainings for jobs. We’ve already invested in a lot. We’ve created plans to bring more than 600 000 new places. But we’ve added these in and we’ve added these in because the economy today people are losing jobs in some industries, and you’ve pointed to that during this interview, but we still know that there are some employers who are crying out for skilled labour and can’t get it. So if we can make training places, places to help people to get jobs available, then that’s going to make a difference and we did that through an investment in the Economic Security Statement.
STEVE PRICE: Just finally, one year on Monday, any time to pause and reflect or have you got too much to do?
JULIA GILLARD: Oh, no, a bit of time to pause and reflect and I think you’ve always got to … as a busy politician, as a busy radio announcer, busy people around the nation, you’ve always go to try and find some quiet time to be …
STEVE PRICE: Has that been harder than you thought?
JULIA GILLARD: Look, it’s been a huge year. I wouldn’t say harder than I thought. I always thought that this was going to be a tremendously pressurised existence, but also one of great privilege and opportunity and, you know, the job I do, Steve, I get to go around the country. I meet some fantastic people. I get to sit at my desk in Canberra or in meetings with my colleagues and make decisions that I know are going to make a difference for the people that I’ve met around the country and are going to do something positive for them and for their lives and their families and that’s a tremendously feeling.
STEVE PRICE: Has it gone quickly?
JULIA GILLARD: You know, it’s that trick of time that sometimes you look back and you think, ‘Gee, that’s gone in a blink of an eye.’ But then you think of all of the things that have happened in that time period and then it seems to have lasted quite a long time so … [laughs] you know, I’m very proud of the achievements of this government along the way.
STEVE PRICE: And you’re confident your team’s handled this global meltdown, which you could never have seen coming, better than the previous government would’ve?
JULIA GILLARD: I think we’ve done everything we can to stay in front, to act decisively, to be in front of the curve. Kevin’s been absolutely focused on that and working hard to do it, and I …
STEVE PRICE: Does he need a speechwriter like Hawkey suggests?
JULIA GILLARD: [laughs] Well, you know, I mean people will always have their literary style criticisms of the way politicians give speeches, but I think what people want is they want us getting on with the job that helps them and their families, and we’re doing that in what we very freely and honestly acknowledge that are tough times, unpredictable times, difficult times.
STEVE PRICE: You’re in Darwin which featured in the movie Australia which I guess you have not yet seen.
JULIA GILLARD: No, I haven’t.
STEVE PRICE: Does Darwin still feel like a frontier town?
JULIA GILLARD: I really like Darwin. I think it’s got that sense of … yeah, I suppose you would say frontier and that sense of growth and life and things happening, people coming to live here and new projects, new investments. So I think it’s got a real spark about it. Always very hot though. [laughs]
STEVE PRICE: Go and see the movie. Go and see the movie, you’ll love it.
JULIA GILLARD: Yes, I will though. At some point I’ll find time to sneak off and go and see the movie.
STEVE PRICE: Appreciate your time, thanks.
JULIA GILLARD: Thanks Steve.
STEVE PRICE: Julia Gillard there, the Deputy Prime Minister.