Early childhood education and care should be fully subsidised for three days a week for families earning up to $80,000, while the activity test should be relaxed for all families.
These recommendations to the federal government come from the Productivity Commission’s draft report on early childhood education and care in Australia. It outlines a path the government can take towards a universal system for all children, with Commissioner Lisa Gropp saying the recommendations would establish strong foundations for all Australian children and expand choices for women.
The key focus of the report is to encourage the government to lead efforts for up to 30 hours, or three days per week, of quality early childhood education and care to be available to all children 0-5 years of age.
Raising the maximum rate of the Child Care Subsidy to 100 per cent of the hourly cap for about 30 per cent of families with the lowest incomes, is also a key recommendation.
The commission says preliminary modelling shows that doing so, while relaxing the activity test, will lead to an estimated 3.4 per cent in total hours worked by single parents and mothers in families with young children. This is equivalent to 20, 700 full-time employees and would bring in an additional $180 million in income tax.
Jay Weatherill, former South Australian premier and Director of Thrive by Five, said he welcomed the recommendations from the Productivity Commission, noting it was a significant moment for policy in the childcare sector.
“It demonstrates comprehensive support for a truly universal system. For so long, we’ve had a system that pretends to be available for all children, but the truth is, it isn’t,” Weatherill told Women’s Agenda on Friday.
“This report really, for the first time, sets out an ambition for for a truly universal early education and care system and gives a series of really well thought through recommendations to achieve it. It’s a really important turning point for policy for children and families and women in this country.”
The report noted that the activity test attached to the Child Care Subsidy – originally intended to encourage parents’ labour force participation – was actually discouraging vulnerable and disadvantaged families from using childcare altogether.
As a priority, the commission said the government should address affordability and availability gaps for those least able to afford childcare and those who have fewer access to services.
“Vulnerable and disadvantaged children benefit the most from quality early childhood education and care, but they are currently the least likely to attend,” said Deborah Brennan, the Associate Commissioner.
The facilitation of the provision of services in areas where childcare providers are unlikely to invest, should also be a priority for the government.
“Some areas of Australia have few or no early childhood education and care services. More funding will be needed to address these persistent service gaps,” said Commissioner Gropp.
“The system can only be universal if every child is welcome. The Australian Government should increase funding to enable the inclusion of all children regardless of their ability or cultural background,” Commissioner Martin Stokie said.
“Governments and ECEC services also need to do more to achieve the commitments in the Closing the Gap Agreement for Aboriginal and Torres Strait Islander children. That means working towards a sustainable funding model for Aboriginal Community Controlled Organisations and investing in the cultural capability of the sector.”
Weatherill noted “the single most important issue” was addressing the significant workforce shortages in the sector, calling it a “pre-condition for reform”. He said increasing wages for educators was a starting point.
“There are alarming statistics in the report about existing shortages and the number of people who are not completing their course in early childhood education,” he said.
“There’s a whole in the bottom of the bucket as well. People are leaving the sector, and not enough are coming in. It’s about creating a real profession and valuing this work.”
As for the government’s commitment to a universal childcare system, Weatherill said he believes the Albanese government is on the path to achieving it.
“The Prime Minister made it clear in the speech he made straight after the election. He talked about pressing forward with childcare reform to create a universal childcare system that sits alongside Medicare and universal Superannuation,” Weatherill said.
“So it’s very much on his agenda. He very much led the charge to have it as part of the policy proposition in the lead up to the election. And if anything, he’s doubled down on it since the election.
“You only need to look at the terms of reference to the Productivity Commission – it wasn’t ‘do you think it’s a good idea?’ It was ‘tell us how to do it’. It demonstrates the level of political commitment to delivering this outcome.”