Labor’s childcare plan: parents, children, and educators stand to benefit, but questions remain


File 20190428 194616 rzox.jpg?ixlib=rb 1.1
Hundreds of thousands of Australians parents would be in work if childcare was more affordable.
from shutterstock.com

Jen Jackson, Victoria University

Labor’s proposed A$4 billion reform to the childcare subsidy on Sunday confirms that early childhood is a key policy issue this election. This is on top of Labor’s previous announcement of 15 hours of funded preschool for every Australian three-year-old.

The latest announcement will no doubt be welcomed by families balancing the costs of childcare against the benefits of participation in paid work. In 2015, the Productivity Commission estimated around 165,000 Australian parents would like to work more, but were prevented due to poor accessibility or affordability of suitable childcare.




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Under Labor’s proposal, families on incomes up to A$174,000 with children under five would be better off on average by A$26 a week, or A$1,200 a year per child. Most families earning up to A$69,000 would get their childcare free. Currently, they receive a subsidy of 85%. Labor’s proposal would save them up to A$2,100 annually per child.

The current subsidy gradually tapers down as earnings increase. The lowest subsidy available is 20% for the highest-earning families, before it cuts out at A$351,258.
Families on incomes above A$174,000, under Labor’s plan, would continue to receive the same level of support as under current arrangements.

The current subsidy was introduced as part of the Coalition’s major childcare reforms (worth A$3.5 billion) in 2018, which included a means-tested subsidy and removal of annual caps. The reforms benefitted an estimated one million lower-income families – but also left around 280,000 families worse off, including families with neither parent in work.

ANU modelling had predicted that while the reforms would benefit low-income families, the activity test would mean families not working or studying would be at risk of missing out.




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This is where early childhood policy gets complicated. Policies can be motivated by different goals. The Coalition reforms were aimed at encouraging parental workforce participation. Labor’s proposal for the childcare subsidy seem similarly motivated.

But parents are not the only beneficiaries of childcare subsidies. Quality childcare also benefits children’s learning. Many childcare programs for four-year- olds (and increasingly, three-year-olds), incorporate preschool. For children of all ages, Australian childcare providers must provide a play-based learning program, guided by the national framework.

That’s why childcare and preschool services are all known as early childhood education and care: whenever children are being cared for, they are also learning. Even a nappy change offers opportunities to support children’s learning, as skilled educators use playful, caring interactions to help young children develop skills like communication, trust and well-being.

Educators can also help families recognise these opportunities, so learning continues at home. Children in low-income households often have fewer opportunities to learn, due to factors such as stress and limited resources for investment.

By supporting access to quality early childhood services, governments can help families learn everyday ways to enhance their children’s learning.




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To maximise benefits for children, all early childhood services need skilled, professional staff. Labor’s promised wage increase of 20% over eight years for early childhood educators addresses an issue that has been in the too-hard basket for too long.

Research has shown many Australian early childhood educators are paid so little they are financially dependent on others in their households — ironically while enabling financial independence for other working women.

Low wages place downward pressure on the quality of early childhood programs. Educators’ qualifications are lowest in low-income communities, where families cannot afford to meet the costs of higher wages. Government subsidies can help to break the link between educators’ wages and families’ ability to pay fees, so the best educators can reach the children who most need them.

Of course, the devil is in the detail when it comes to policy implementation. Labor has not specified how the wage increases will be delivered, instead committing to further consultation with the sector. Big questions remain about how government subsidies – to parents or educators – will be absorbed into a sector with for-profit and not-for-profit providers.

Close monitoring of the impact on childcare costs will be essential. Labor’s plan includes asking the Australian Competition and Consumer Commission to investigate “excessive” childcare fees. But can support for families be increased without stimulating an increase in fees? Can educators be supported to earn a fair wage, while keeping prices fair for families?

There is much to be gained by engaging with these questions. When parents are working, the economy benefits. When children are learning, everyone benefits, as the impact of early learning lasts throughout school and beyond. Countries like Sweden and Finland show what may be possible when parents’ and children’s needs are prioritised equally.

We owe it to Australia’s children to keep these issues on the election agenda.The Conversation

Jen Jackson, Education Policy Lead, Mitchell Institute, Victoria University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Shorten promises $4 billion for child care, benefitting 887,000 families


Michelle Grattan, University of Canberra

In a big hit announcement before the start of pre-polling, Bill Shorten on Sunday will pledge a A$4 billion boost for child care, making it cheaper for every family earning up to $174,000.

From July 2020, 887,000 families would benefit from the ALP plan, with some being up to $2,100 better off.

Under the initiative:

  • families with children under five on incomes up to $174,000 would be better off on average by $26 a week – $1,200 a year – per child

  • the majority of families earning up to $69,000 would get their child care free. This would save them up to $2,100 annually per child.

Families on incomes above $174,000 would continue to receive the same level of support as under current arrangements.




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The plan is central to Labor’s campaign on cost of living, with Shorten describing it as “massive cost of living relief for nearly one million families struggling with the costs of child care”.

“Under the Liberals, the costs of child care has gone up 28%, costing families using long day care $3,000 more a year.

“Labor will increase the subsidy families receive, we will kick start the process to limit out-of-control child care price increases, and we will review the impact of the system on vulnerable and very low-income families,” Shorten says.

“This is a $4 billion investment in early education, in working parents and in helping families with the rising cost of living. Labor can pay for cheaper child care for working families because unlike Scott Morrison and the Liberals, we aren’t giving bigger handouts to the top end of town,” Shorten says. The $4 billion cost is over three years.


Source: ALP

The main elements of Labor’s plan include:

More child care fee support

The subsidy rate would be increased from 85% to 100% up to the hourly fee cap (currently $11.77 per hour for long day care) for families earning up to $69,000 who meet the activity test. This would make child care free, or almost free, for up to 372,000 families.

The present tapered reduction would be updated to reflect the higher subsidy rate.

Families earning between $69,000 and $100,000 would receive a subsidy rate between 100% and 85%, up to the hourly fee cap.

Families earning between $100,000 and $174,000 would receive a subsidy rate between 85% and 60% up to the cap – an effective increase of 10%.

Families accessing approved Centre Based Child Care, Family Day Care and Outside School Hours Care, including holiday care, would all benefit from the higher subsidy.




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Cracking down on excessive fee increases

Labor would give the Australian Competition and Consumer Commission a new role of investigating excessive fee increases and unscrupulous child care providers. Findings would be made public through mychildcarefinder.

The ACCC would also look at mechanisms to ensure greater controls on child care fee increases to keep child care affordable.

Reviewing the system for vulnerable children

Labor says that in the nine months of the current subsidy system, the number of vulnerable and very low-income families using it has fallen.

“Reports suggest the numbers accessing the Childcare Safety Net have fallen by almost half, from 35,000 to 21,000.

“Labor will urgently review the new system to make sure that vulnerable and low-income families and children aren’t falling through the cracks,” Shorten says.

Labor has already committed to every three-year-old child being able to receive 15 hours of subsidised preschool. It has also said it would extend the current arrangement for four-year olds.

Shorten says this would create “a two-year program to support the most important years of a child’s development and ensuring our kids don’t fall behind the rest of the world”. For many children this would be free or nearly free.




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Labor is also set to make an announcement on boosting the wages of child care workers, who are among the low paid.

The first votes will be cast at pre-polling stations on Monday, as the campaign ramps up in its final three weeks. Scott Morrison and Shorten will meet in Perth late Monday for their first face-to-face debate.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.