Productivity Commission recommends single payment childcare policy to benefit low and middle income families - Women's Agenda

Productivity Commission recommends single payment childcare policy to benefit low and middle income families

The Productivity Commission’s long awaited report on childcare has recommended the Abbott government provide greater support to lower and middle income families by providing a single, meanstested subsidy for childcare.

The report, due to be tabled in parliament later today, will inform the government’s new family package after the prime minister officially abandoned his signature paid parental leave scheme earlier this month.

The Commission recommended a single, means-tested payment that would cover 85% of childcare costs for families with incomes at or below $60,000 and would cover 65% of costs for families with incomes above $250,000.

This recommendation differs from a draft report, which proposed a more lenient meanstest providing a 90% subsidy for low-income families and a 30% subsidy for higher income families earning $300,000 and over.

The updated meanstest directs more funds to lower-income families and would thus better assist them in affording childcare and returning to the workforce after having children.

This payment would cover up to 100 hours of childcare per fortnight for families with children under the age of 13 and with parents who work or study more than 24 hours per fortnight. The working hours requirement is waived for children considered “at risk”.

The new model also provides 10 hours of subsidised childcare for unemployed parents.

The payment uses a “benchmark price” calculated based on the average cost of childcare for a child of a certain age requiring a certain type of service. In 2013-14, these rates are estimated to be $7.41 per hour for a 0 to 35 month old child in long day care,  $7.20 for children aged 36 months or over in long day care, $6.94 per hour for all children in family day care and $6.00 per hour in outside-school hours care.

The commission has also recommended that federal funding be extended to nannies who have the relevant qualifications and are formally approved. The family day care rate of $6.94 per hour would be applied to approved nannies.

The commission also looked at ways to better assess the quality of childcare, such as expediting the manner in which centres are regularly evaluated. The report stipulates the type of qualifications early learning and childcare providers must have, and is stricter than its earlier iterations. It stipulates that childcare workers must have or be undertaking a Certificate III in early childhood education and be under the supervision of someone with a diploma. The supervision requirement was not included in the draft report.

The government has not officially responded to the report, but Social Services Minister Scott Morrison said the government is “considering” the recommendation to extend funding to nannies. He has also previously indicated the report would directly inform the government’s new childcare and family policies.

“It is a significant input to our process,” Morrison said.

Morrison also said in a press conference this morning that all government members would collect feedback from the community about the commission’s findings. He also he would consult with Labor and the crossbench when considering the findings.

The commission reported that as well as making childcare more affordable for individual families, the new structure would lift female workforce participation by 1.2%, bring approximately 16,400 workers in the workforce and boost growth by $1.3 billion in the first year.

×

Stay Smart! Get Savvy!

Get Women’s Agenda in your inbox