Members' Concerns & Views about Worker Retention Payments shared with Senate Committee

October 25th, 2024 Latest News

ACA NSW members can "watch" (audio-only) the full version or read the full transcript of the Public Hearing held on 23 October 2024, please find following the extracted video and transcript.

Representing ACA members was Paul Mondo, ACA National President.

Sharing with Senators tasked with reviewing the legislation proposed to provide $3.6 billion to fund the Worker Retention Payment, the following highlights are only some of the feedback and input from ACA members that were shared with those Australian Senators:

“The reality we're facing now, since the announcement, is more about the practical implementation, which is creating some uncertainty around who should apply, when they should apply and what that means for them and their services. Whilst there's a lot of smaller issues that sit around that, the big pressure at the moment for every service that is making a decision as to whether it's going to apply for this grant is: it is being asked to commit to the workplace instrument which puts into effect the funded wage rise and makes a significant impact on the expenses of its payroll without having any idea how much money it'll be receiving in return. I suspect that the one concern that we will continue to advocate for is a greater level of transparency about how the funding methodology is determined and what that means, from a dollar perspective, for services. That doesn't necessarily mean that it has to cover 100 per cent of the costs, but, as part of the grant guidelines and the fee constraint mechanism that's in place, if the funding is significantly short, there are no other opportunities to recoup revenue to offset any loss in covering that expense. Beyond the broader issues around the legislation, that is where the tension sits right now as we're going to implementation and rollout. To be fair, it is complex; we understand that. We don't think that it is an easy thing to achieve and, as Caroline points out, the commitment from the government and the department is welcomed. But I don't think there is a world where any service could commit to, say, $300,000 worth of extra expenses without knowing how much the subsidy is going to be for that. That, for a single-site service of 100 children, is about the extra cost that they'll be incurring as a result of that. Again, they want to do it, they want to deliver it quickly, and I suspect there would be a heap of people applying tomorrow if they knew what the subsidy was going to be.”
“Our perspective has been—and I think Miranda pointed this out—that wages alone won't solve every problem, but it is certainly a significant narrative shift in both attracting new people to the workforce and, hopefully, bringing back some who may have left on the basis of pay. So we do believe that, as the purpose of the bill says, it will improve attraction and retention and that this is the first step in a longer-term approach to what the other elements are then. If we can't get this right then the next step won't happen.”
“It goes without saying and this is where the detail around funding formula is really important that, without knowing what the funding is, the fee constraint may or may not be a problem for individual services based on their own circumstances. A lot of quality is in what I would call 'discretionary spend', not 'compliance spend' which means the minimum standards. It's with that discretionary spend, where there might be challenges, that people have to say, 'If I don't have the revenue, I have to offset against some other expense there.' That could be all manner of things, like incursions you pay for at your service, but it could be at the cost of having higher qualified staff or working above ratio. Again, I wouldn't say that that's a uniform decision or a uniform approach or that it's appropriate in every setting. But services have different levels of occupancy, different levels of viability and different things to consider when they make those decisions around how many non-contact staff they employ at their service to do administration. So there are all manner of things there. We know the core part of where the quality sits is in workforce, and having people who are as highly qualified and experienced as possible, and as many of them as possible, is likely to deliver better outcomes there. I think that's where the real risk sits if, in a particular context, the fee constraint doesn't work.”
“Clearly there is a scenario if you're a single-site provider, you want to be assured the funding is going to work for you because you don't have the opportunity to cross-subsidise across multiple sites, where there might be different surpluses to deal with. This is the challenge. Honestly, it doesn't matter whether you're a small provider or a large provider, or a parent committee or a not-for-profit; as directors of an organisation, you have a financial responsibility to make decisions that don't impact your viability. Right now we're being asked, as directors of those organisations, to implement a workplace instrument to put into effect a wage rise, apply for the grant and then find out how much the funding is. To me, that's akin to buying a house without knowing the purchase price. That is inherently the challenge here. Quite frankly, the funding could be absolutely adequate enough for most services; I'm not disputing that because I don't know that to be true or not. But we don't know what it is. Making those decisions without the important piece, the integral piece, of the financial puzzle is not realistic. To your previous question: it might or might not make the fee constraint quite reasonable in many circumstances for people to manage, but there is a gap missing to inform that. That is the feedback we're getting from our membership at the moment, and that's the sort of thing again, is it covering 50 per cent or 80 per cent of the subsidy? We don't know.”
“I think there's a unique context that we need to manage in terms of this, because that comes at a significant extra cost in our sector, because we don't have student-free days. We don't have 40 weeks of operational time. We operate 12-hour days, 52 weeks a year, and every person taken off the floor needs to be replaced, which doesn't happen in any other setting. So they are absolutely structural quality elements that will improve outcomes, but they come at significant cost. Those conditions are as significant an impost financially as driving up the pay rate, purely because, to have a staff meeting with all staff, it must be at 6.30 at night, with penalty rates that appropriately apply, and so on and so forth. So there is an added complexity for our sector which makes that a unique challenge that doesn't apply to the school setting or the preschool setting, for that matter.”