So after three years, three Senate Inquiries, one Productivity Commission Inquiry and two elections the Government finally managed to get its childcare (“Jobs for Families”) package through the Senate last week.
And as it was pointed out repeatedly during debate in the Senate, it takes a special skill to pour more money into a policy reform and yet leave vulnerable families worse off. But this is what the Turnbull Government, aided and abetted by the Nick Xenophon and One Nation parties and Derryn Hinch have managed to do.
There is no doubt that families have needed childcare relief – from both supply demand mismatch and super high prices – for some time. Many families have probably scoured the media trying to make sense of an exceptionally complex change to childcare payments that has been so long in the making.
So what are the key things that families actually need to know but probably won’t find in the tables showing the winners and losers of the package?
1. The new childcare subsidy system won’t take effect till July 2018. The current system will remain in place till then so don’t expect an immediate reduction in your childcare bills.
2. The new subsidy system is based on families getting a percentage of a fixed hourly amount. You will no doubt read that the new subsidy will cover:
- 85 per cent of fees for families earning under $65,710,
- 50 per cent of fees for families on $170,710-$250,000 and
- 20% for those earning up to $350,000.
This is not actually how it works however. The percentages are of a pre-set hourly rate for each care type – for long day care centres this will be $11.55 per hour (plus CPI between now and July next year). If your service charges more than this – i.e. for most centres more than $115 per day, your actual subsidy will be less than these percentages so you will still have a substantial gap fee.
3. The so called ‘Activity Test’ may affect you. If you are a stay at home mother or a mother in casual work you will need to make sure you work outside the home, volunteer at your child’s school or study at least 4 hours a week or your subsidy will be cut for those weeks where you are not contributing enough to the productivity of the nation.
4. The additional subsidy that some families will get does not come for free. Someone is paying for it. Subsidies will be removed from those earning above $350,000 (Thanks to Derryn Hinch for insisting on this amendment which recognises the bleeding obvious – if you are earning this much you really can cover your own childcare costs.). But the main families who will be paying for it are those who earn less than $65,000 a year. Under our existing subsidy system all children are eligible for 24 hours care a week. Under this shiny, new, all singing all dancing, child care subsidy system, these families will only be able to access 12 hours per week despite the most impassioned efforts of Sarah Hanson Young and the ALP in the Senate and Shadow Minister Kate Ellis in the House of Reps.
5. The entire bill does nothing to fix childcare supply. Can’t get childcare in your area or at all? Surely you can settle with understanding that if you could find care it wouldn’t be as expensive? Surely you should be happy with that?
6. The whole expensive, laboured process of passing this bill did nothing to ensure that the people who actually do the educating and caring for children can afford to stay in the workforce. Prepare to say goodbye to your child’s favourite educator as they seek jobs in areas like retail that will pay them significantly higher wages and entail less stress and emotional burnout.
7. Realise that your child didn’t win. Whereas other countries are transforming their childcare systems to ensure they are used to deliver comprehensive and valuable early education, ours was not. The Commonwealth Government still hasn’t committed a cent to extending access to universal education for children in the year before school. This process could have ensured all Australian children had access to high quality early education but the Turnbull government wasn’t interested. All it wanted to do was make sure that the “right’ families can have both parents in the workforce.
A few seconds after the late night passage of the bill in the Senate, Education Minister Simon Birmingham tweeted a meme of two white, smiley children playing with toys you would never see in a contemporary childcare centre overlaid with the words “Fairer, more affordable and flexible child care and early learning – delivered.”
Maybe the Government should get an actual advertising agency to design their $16 million campaign to convince families of the benefits of the package?
Looks to me like the agency that gets the gig will be earning every dollar as they try to convince families that this on the nose childcare package really was worth the very, very, long wait.
Lisa Bryant is a consultant in the early education and care sector.