When speaking to the Minister for Early Childhood and Childcare, Kate Ellis, about the affordability and accessibility of childcare she is struck by something in my voice. “I speak to lots of people around the country and your reaction is not uncommon,” Ellis says. “It’s almost disbelief.”
Indeed. Like many women of my generation I went to school and university assuming that when the time came, if I chose to do so, I would be able to combine work and family. I didn’t assume that childcare would be funded by anyone else but I assumed positions would be available and affordable. As I explained earlier this week, my assumption proved to be wrong and, like the other constituents Ellis encounters, I am in disbelief.
According to reports published this year by the Australia Institute, the National Foundation for Australian Women and the Australian Women Chamber of Commerce and Industry, we are not the only ones. The availability and affordability of childcare pose genuine impediments to parents returning to work.
So how does Ellis see the situation that Australian families face?
“There is no doubt that if you were starting from scratch the early childhood system wouldn’t look like this,” she says. “Twenty years ago childcare was used by the minority and was predominately seen as babysitting for the parents who chose to go to work.”
Since then, Ellis says, two factors have changed significantly that have placed enormous pressure on the national childcare infrastructure. First, there has been a substantial increase in the percentage of women who participate in the workforce and second, the benefits and importance of quality early childhood education have been recognised.
“We have a system that is entrenched with a combination of not-for-profits and private operators as well as a variety of federal, state and local government involvement,” Minister Ellis says. “There has been dramatic change in the sector and it’s developing very quickly.”
Ellis says the demand for childcare services has grown by 30% over the past five years and getting supply to match that level remains a challenge.
“I absolutely accept that availability is an ever-increasing issue,” she says. “There is no doubt that there are real issues around availability particularly in the capital cities but also in other areas like Alice Springs which has one of the lowest vacancy rates nationally.”
The minister is well aware families in some capital cities are being placed on two or three year waiting lists and says that signals the childcare shortage is critical. However other geographic areas, for example Adelaide and parts of Queensland, report low occupancy rates. Ellis says the inconsistent national picture around the supply of childcare places complicates the situation.
“We have private childcare providers in Queensland asking us not to open more centres because they’re operating at 40% occupancy,” she says. “They have one of the highest vacancy rates in the country.”
On the flipside, the situation in Melbourne and Sydney is dire which Ellis says is due, in part, to antiquated planning policies which have not kept up with the demand for childcare.
“Development approvals for child care centres are often slow, and some councils have specific restrictions to limit the number of places in new centres, while others have policies to support more places by identifying and releasing land for new centres,” she says. “The planning laws in New South Wales are ludicrous. Their laws are easily the most out-dated and it’s in the state facing the worst supply situation.”
So what is the solution? Ellis says ultimately supply will only improve when the current barriers to opening child care facilities are removed. She says two initiatives, announced this year, have the potential to improve access to childcare.
The first is the Childcare Accessibility Fund, announced in June, which is to provide an additional $5 million in federal funds to help local governments deliver more child care places for communities facing the greatest shortages. Grants of up to $250,000 would be used to expand centres, cut planning and development red tape, free up vacant land for child care centres, or incorporate child care into schools and TAFEs.
The second potential solution is a study the government commissioned the University of Technology Sydney to undertake in June into the impact of planning on child care availability. Ellis say it will shine a light on local and state planning regimes which is where there is real scope to increase supply.
“It will be important because if we have a document that clearly shows ‘This is the best way to increase supply’ then everyone can then sign up to the planning measures to make that happen,” Ellis says.
It would require a level of co-operation that hasn’t been achieved in the past.
“Late last year I put forward a motion at the education ministers conference that the states and federal government should all work together, and invite local government, to identify barriers and work towards a solution,” she says. “The New South Wales government went on record to say we’ll fix this on our own.”
On the issue of cost Ellis seems more reluctant to concede there is a widespread problem. To the contrary she points to record levels of fee assistance and cites the findings from a recent government report as proof that affordability is improving.
The latest figures from My Child show that families with an annual income of $75,000 spent 8.4% of their disposable income on child care in 2012, compared to 13.0% in 2004. According to the same report a family with annual income of $120,000 has out of pocket expenses of $2.98 for the average long day care hourly fees of $7.20.
These figures seem to be at odds with other recent research findings. In March this year the Australia Institute published a report that found a greater proportion of families reported cost difficulties with childcare in 2010 than in 2001.
The difference might be explained by price; the government bases its calculations on child care costing $72 a day, using data from the Productivity Commission. An issues paper published by the Australian Women Chamber of Commerce in July shows the average cost of child care in Australia is $120 a day.
When asked about this discrepancy Ellis was circumspect.
“It’s an average, some people pay more, but it takes into consideration the costs of the majority,” Ellis says. “The Productivity Commission estimates the weekly cost of a child in full time care is $371 a week and that’s the before any rebate or benefit is taken into account.”
If that estimate were representative of the majority of childcare centres in Australia affordability would be less of an issue. But the president of the Australian Childcare Alliance Gwynn Bridge says the reality is it would be difficult to source childcare anywhere in Australia for $72 a day. “That would be at the lower end of the price bracket,” Bridge says. “There would be some facilities in Queensland still at that rate because historically care has cost less there but in most places it costs a lot more than that.”
In capital cities, where the majority of children are in care, Ellis admits long day care costs upwards of $100 a day. In Sydney and Melbourne it is not uncommon for centres to charge $145 a day. For one child in full-time care at a cost of $120 a day, even with the government’s rebate and benefits, the AWCCI Issues paper estimates a woman earning the average weekly wage would take home just $160 a week after paying for childcare. On those figures it is easy to see why affordability becomes a genuine problem.
From a policy perspective there are competing demands to juggle when it comes to childcare. Affordability is a priority but so too is quality and there is an obvious tension in meeting both. In this regard the government’s National Quality Framework, a comprehensive set of laws and regulations aimed at improving the quality of care across Australia, has placed some upward pressure on fees.
The Shadow Minister for child care and early learning, Sussan Ley, agrees with the new regime in principle but attributes additional bureaucracy to a 22% jump in fees over the past two years, a figure which the government rejects. Tomorrow I will report on the Opposition’s plans for childcare should they get elected.
But a final comment from Ellis. In discussing what Australians can expect should the Labor party get the mandate to continue in government on September 7 Ellis is committed to continue investing in the quality and quantity of early childhood services. But equally she is frank about there being more work to do.
“Anyone responsible for the early childhood portfolio is never going to have the luxury of putting their feet up,” she says.