The reforms are good news for Australia’s around one million working families, and their 1.5 million children in care, but bad news for around 100,000 families with at least one parent not in the workforce.
As the Government made clear from the beginning that their priority was economic – they want to see more women returning to work more quickly after they have their children – the outcome should be no surprise.
Working women will mostly do well out of the changes – but only if their household has an income of less than $350,000 a year. Women who do not work will find themselves in the losing category when the changes are implanted next July.
Government data shows that around 70% of families using child care will be better off, by around $30 a week. Gone will be the $7500 cap on Child Care Rebate that has locked many women into only being able to work two or three days a week. The new system will support them even if they want to work four or five days a week, giving working mothers a lot more choice.
Gone is the flat rate Child Care Benefit that has failed to keep up with the rising cost of child care, inflating families’ out of pocket costs even further. The new Child Care Subsidy will be a percentage of fee, up to 85% of fee for low income families, up to a fee cap that applies to the top 10% or so of the most expensive services.
The new system comes with $1.7 billion of additional funding, including new and much needed funding for Aboriginal and Torres Strait Islander services, inclusion support for children with additional needs, and services in rural and remote areas – for children who need extra support. To gain extra funding for child care and early learning in the current fiscal environment is a remarkable achievement not to be understated.
But while the workforce participation objectives are well and truly met, the new package falls short on meeting early learning objectives. The research shows clearly that children from low income families are twice as likely as children from high income families to start school developmentally behind. We also know that by giving these children access to quality early learning we can reduce that risk considerably, contributing, as the OECD points out, to more equitable educational, social and life outcomes.
This package cuts access to early learning for around 100,000 families who do not meet the new activity test. In the interests of saving a bit of money in the short term, this decision will cost the Government a great deal more in the longer term. Families do not need to meet an activity test to access school education and early childhood education should be treated the same.
Education Minister Simon Birmingham assured senators last week, including key swing vote Nick Xenophon, that the activity test would be ‘very light touch’ and quite easy for families to meet. He needs to be held to account to deliver that.
The Minister has also spoken previously of the importance of extending early learning opportunities for 3 year olds in Australia. While most advanced economies provide free or near free early learning for 3-5 year olds – with Israel and Ireland the most recent reformers – Australia lags well down the pack. That needs to change, with the Mitchell Institute highlighting the compelling benefits for Australia’s educational outcomes from giving more children more access to early learning. The next generation of universal access to early childhood education agreements needs to reflect that.
Supporting our most vulnerable and disadvantaged children should be everyone’s business, and the early childhood sector needs to do everything it can to use the tools in this package to support those children. It may require some creative thinking, but needs to be done.
Child care affordability for working families advanced a long way in the Senate last week. But getting the policy settings right for early childhood education still has a long way to go. The glass half empty must not stay that way – we need all women and children to win by receiving the early learning and care they need.
Wendy McCarthy has been campaigning for accessible, affordable child care for 40 years, and is currently the Deputy Chair of Goodstart Early Learning.