Childcare: If the model fails, change the model

by Robyn Seth-Purdie

The government plans to increase spending on childcare as follows:

Financial year Spending, $M
2021-22 9,918
2022-23 10,713
2023-24 11,319
2024-25 11,828
2025-26 12,403

The increase is expected to be 6.5% in real terms from 2022-23 to 2025-26.

At the beginning of the pandemic, the government announced that childcare services would be free and that the children of essential workers would be given priority access where places were restricted. Despite a suite of complex additional expenditure measures designed to keep services open, 372 shut down between July 2021 and 9 January 2022, and although there were 461 applications to open new centres, it is not clear how many actually commenced.

A recent study by the Mitchell Institute mapped the availability of centre-based childcare eligible for the Commonwealth subsidy in 500 neighbourhoods across Australia. Overall, it found 35% of neighbourhoods were childcare ‘deserts’ with low spatial access or low availability of places. The proportion ranged from 85% in remote regional areas to 29% in metropolitan areas.

Government subsidy for childcare operates by a virtual voucher system – parents receive a subsidy which they can cash in at any service. As the availability study above demonstrates, availability is not guaranteed.

Another Mitchell Institute Report found that 385,000 Australian families could not afford childcare.

Last year the Fair Work Commission granted rises of up to 13% in the wages of early childhood workers, and the Bench was told that the increased level of subsidies by government that commence on 1 July 2022, would ‘directly support’ payment of the increased wages. The Childcare Alliance, described as ‘the main peak body’ in the case,  represents for-profit services.

Concerns have been expressed about the safety and quality record of mainly for-profit services. Revenue from the ‘Childcare Services Industry’ is reportedly $13.7 billion in 2022, and expected to increase by 2.8% this year. G8, an ASX listed company, is the second largest service provider (450 centres) after not-for-profit Goodstart (664). Australia’s experience with an ambitious corporate provider – ABC Learning – did not end well and should have encouraged governments to rethink the model of child care funding that underpinned it.

To achieve the policy trifecta of quality, accessibility, and affordability – to parents and the Budget – the government needs to change its model of childcare provision. The government has demonstrated that free childcare is possible in extremis.

The name ‘childcare’ follows a tradition of viewing the service as a superior form of child minding. It is more accurate to call it early childhood education and care and it deserves to be provided as a universal service after the public-school model. That would enable it to achieve the policy trifecta mentioned above and a range of highly desirable outcomes – improved child development, especially for the most disadvantaged children, greater workforce participation for parents, mainly mothers, and a well-paid professional workforce with a high proportion of women.

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