26 FebThe Senate has the chance to ensure new early years package includes all disadvantaged families

Posted on 26 Feb 2016

In December 2015, the Australian Government introduced legislation to implement its Jobs for Families Childcare Package. The package – developed in response to a 2014 Productivity Commission Inquiry into the affordability and accessibility of early childhood education and care – aims to better target child care subsidy for families.

The Government has rightly noted that the package will create many winners with some families forecast to have reduced costs of child care through the significant increase in investment ($3.2 billion). However, the Government has been less keen to examine or identify the many families that will be worse off under the package.

Early Learning Association Australia – and many other organisations across the early learning sector – has consistently expressed broad support for the package, but also sought to highlight concerns that many vulnerable families and children will lose out under the proposed new scheme.

These issues are now being considered by a Senate Committee inquiry into the legislation – and we believe this inquiry represents the best opportunity to revise the package (with the support of the Opposition, Greens and cross-bench) to ensure that disadvantaged children and families are not adversely affected.

A principal concern is the proposed changes to the Activity Test that requires parents to undertake a certain amount of work or study each week to be eligible for child care subsidy. Currently, all children can access at least two days of quality early learning and care – but under the new Activity Test, children from single income families or non-working, casually or insecurely employed parents might have access to only 12 hours of care.

This is a significant reduction to the existing entitlement and it appears to reflects the government’s intention to pull one public policy lever (children’s access to early learning) to achieve another public policy outcome (greater workforce participation).

The proposed changes will have a particularly detrimental effect on some of Australia’s most disadvantaged families. The Secretariat of National Aboriginal and Islander Child Care commissioned Deloitte Access Economics to research the impact the new package will have on vulnerable Aboriginal and Torres Strait Islander children.

The resulting DAE report identifies that the planned abolition of the Budget Based Funding program together with the introduction of the Activity Test will not only significantly reduce the access of Indigenous children to early learning programs, it will also increase the costs of child care and reduce the viability of regional, remote and small Indigenous services. The conclusion is that the new scheme will make no contribution to “Closing the Gap“ and without ongoing, adequate and sustainable support mechanisms being confirmed through the Child Care Safety Net, it may have the opposite effect.

Australian and international research clearly indicates that investment in the early years brings benefits to children and the economy over the short and longer term. Economic modelling by PricewaterhouseCoopers and submitted to the Productivity Commission estimates a net benefit to the Australian economy of $13.3 billion by 2050 if vulnerable children – whose parents are in the lowest income bracket and who are not likely to attend an early childhood education and care service – attended a quality program. The report suggests that this far outweighs the cumulative benefits of increased female workforce participation (estimated at $6.0 billion) sought by the Government.

PwC’s analysis again highlights that the fundamental approach taken by the Government to investing in early childhood education and care is wrong-headed. The package aims to increase workforce participation by parents as a means of increasing economic productivity in the short-term – a reasonable goal of Government – but does not take advantage of the more substantive opportunity to invest in quality, accessible and affordable early learning to benefit children and the nation over the longer term.

With much discussion about supporting Australia to becoming an innovative nation, this policy premise of what quality early learning and care is for is flawed and out-of-step with both the research evidence and the available economic modelling. It also continues to use outcomes for children as leverage to encourage changed parental behaviour, visiting the so-called economic “sins” of the mother (and father) on the future of children.

We firmly believe that a child’s right to access quality early learning should not be linked to the capacity or willingness of parents to work or undertake training. By not focussing on children and their rights, the package misses the chance to invest in quality early learning for the right and rational reasons, i.e. to realise the social and economic benefits for children and the nation.

New investment is welcome, but there are significant and troubling strings attached to this package. We remain hopeful that the Senate inquiry will help return children’s rights, needs and outcomes to the centre of the early childhood education and care policy debate.


This article has been written by Shane Lucas, CEO, Early Learning Association Australia for The Early Learning Review. It has been reproduced here with permission.

Shane was appointed CEO of ELAA in July 2013. Shane has a wealth of social policy expertise and senior management experience across the public and private sectors. Prior to ELAA, Shane was Global Head of Sustainable Development with ANZ Banking Group, and has previously held executive-level policy and strategy roles in the Victorian Government Departments of Transport, Planning and Community Development, and Human Services.

Shane also has significant industrial relations experience, having worked as a National Industrial Officer with the Finance Sector Union and as Chief of Staff to the Victorian Minister for Industrial Relations.

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