Free or cheap child care for all families: New report recommends major overhaul\

Free or cheap child care for all families: New report recommends major overhaul\
  • PublishedJune 12, 2024

Families should be offered free or cheap child care regardless of their income or work status, according to a report released by the Centre for Policy Development (CPD).

The policy think tank has made a series of recommendations on how federal and state governments could improve Australia’s early childhood sector to ensure it is more affordable and accessible.

The key recommendation is to provide three days of free child care for disadvantaged families. The CPD has suggested that could apply to households with a combined income of $80,000 or less.

Parents earning more would be asked to pay $30 for three days of care. The estimated cost to the government would be $7 billion a year.

CPD program director Katherine Oborne said that figure did not take into account the long term savings that would eventuate as a result of the measure.

“We’ve estimated there is around $3 billion in additional annual tax revenue and around $7 billion in annual GDP increases from parents working more hours, incentivised by free or low-cost early childhood education and care,” she said.

Ms Oborne also argued there was a need for early childhood education to be brought into line with other key services to ensure accessibility for all.

“Make it similar to public schooling or Medicare,” she said.

“We know how important it is to be providing education and care for children to support development … and also to support families to be able to balance work and to be part of the workforce and the economy.”

The report stated that if parents earning more than $80,000 wanted their child in care for more than three days, the subsequent days would be charged at $15 each.

It said two days of preschool should be offered for free once a child turns three, followed by a small fee of $10 or $15 for subsequent days.

Prime Minister Anthony Albanese told the ABC that the government was waiting for a report from the Productivity Commission examining universal child care.

“We think that universal early childhood education is desirable and possible,” Mr Albanese said.

Labor has previously said its child care subsidy program was the first step towards an aspiration for universal child care.

The Parenthood, which represents parents and carers, has backed the report’s recommendations, which chief executive Georgie Dent said would give women more choice about their working hours.

“The reality is there’s not nearly enough genuine choice, a lot of parents are pushed into circumstances that are not of their choosing,” she said.

Ms Dent also stressed the need for care to be either free or cheap for all families.

“I haven’t ever heard anyone in Australia argue that children of wealthier parents shouldn’t be entitled to a place at their local primary school or their local high school because of their parents’ income, or wealth,” she said.

 Day 1Day 2Day 3Day 4Day 5
Children 0-3 years$10$10$10$15$15
Children 3-4 yearsFreeFree$10$15$15
Children experiencing disadvantageFreeFreeFree$15$15
Highly vulnerable childrenFreeFreeFreeFreeFree
Second and subsequent children$5$5$5$7.50$7.50

Reports calls for higher pay for sector staff

Aside from cost being a barrier for some families, a current shortage of workers has many parents struggling to access the care they need.

The CPD report acknowledged it would take a “sustained effort” to ensure there were enough staff to meet the demand that would come with more people accessing cheaper and free child care.

Katherine Oborne said retention and further incentives were needed.

“Remuneration is really critical … we do need to make sure that early childhood and education workers are compensated fairly for the work they do,” she said.

“It’s important that educators have sustainable work conditions … that is done through manageable workloads, ensuring there are adequate staffing levels.”

The report did not suggest specific pay rates but it did recommend communication campaigns to target school leavers and those changing careers to help find new staff.

It also suggested an overhaul to how the sector is funded. Ms Oborne said the onus should be on the federal government.

“The national entitlement for children to access a minimum of three days of early childhood education … we do think is best placed with one level of government to ensure there is national consistency,” she said.

The states currently help cover the cost of preschool but Ms Oborne said that responsibility should lie solely with the Commonwealth.

“It would ensure that there is consistency across three- and four-year-old preschool offerings for all children across Australia.”

The report said the states should instead focus on workforce issues, access and quality of care.

Ms Oborne acknowledged the 10 recommendations would take time to implement, estimating it would take about a decade.

“This isn’t a short term reform, this is big reform that we are talking about here. It will take time to build, particularly if we want to get it right,” she said.

Government promising cheaper child care

Parents pay some of the highest rates for child care in Australia when compared to other developed countries and the idea of cheaper child care is one the federal government supports.

Last year the government made some changes to the Child Care Subsidy (CCS) regime. Families with a combined income of $80,000 now have 90 per cent of their fees covered, while households earning up to $530,000 have access to some support.

During the 2022 federal election campaign, Labor said its “aim” would be to implement a universal 90 per cent subsidy for all families. However, the government has not set a date on when this would or should occur by.

It has launched a series of reviews, which included asking the Productivity Commission (PC) to look at the sector.

The PC released a draft report last year that said three days of free care should be offered to households earning up to $80,000 and flagged it would conduct further modelling and analysis of a 90 per cent subsidy.

The final report is due to be given to the government by the end of this month.

A spokesperson for Early Childhood Education Minister Anne Aly told the ABC that the government wants to ensure the system is accessible and affordable.

“We’ve already made early learning more affordable for more than 1 million Australian families with our Cheaper Child Care reforms – but we know there is more to do,” the statement said.

“We’re looking to the future with a vision for universal access to early childhood education and we’ll shortly receive the final report from the Productivity Commission, which will help us chart the course to universal early learning.”


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