Productivity Commission Calls for Universal Childcare

Parent and children enjoy time at a playground in Brunswick in Melbourne, Australia, on Sept. 3, 2021. Darrian Traynor/Getty Images

The Australian Productivity Commission (PC) has pushed for a universal childcare scheme to improve children’s development and household incomes.

In a draft report on the early childhood education and care (ECEC) system, the commission pointed out that while ECEC services are widely available to Australian families (90 percent of four-year-olds are enrolled in ECEC), many children were still missing out.

“For many children–especially those experiencing disadvantage and vulnerability–attending ECEC can have positive effects on their achievements at school and later in life,” the report (pdf) said.

“But children who would likely benefit the most from ECEC are attending less than average or not at all.”

There are many reasons why disadvantaged children do not attend ECEC: not enough services in local areas, long waiting lists or limited places at ECEC centres due to labour shortages, high out-of-pocket fees, and services not being “inclusive and culturally safe” for children to attend.

To address these issues, the PC proposed introducing a universal childcare model that would make “quality services accessible to all children and families.”

How Does Universal Childcare Work?

Under the PC’s recommendations, all Australian children aged zero to five years should have access to up to 30 hours of quality ECEC a week.

The commission argued that this amount would allow mothers or secondary income earners within a family to be able to work.

In addition, to break the cost barrier to ECEC, the PC advised the federal government to raise the maximum rate of the Child Care Subsidy to 100 percent for families on incomes up to $80,000 (US$52,000), who made up 30 percent of all families with young children.

At present, the maximum subsidy for those families is 90 percent.

The PC estimated that lowering the subsidy requirements and increasing subsidy rates for low-income families would result in a 3.4 percent increase in total hours worked (equivalent to 20,700 full-time employees) for families with young children.

Furthermore, the PC said the government needed to provide more funding to make more ECEC services available in low-supply areas while ensuring the services offered exceed or at least meet quality standards.

Expanding the availability of ECEC would further require the government to increase support for the childcare workforce, which was facing severe labour shortages.

Specifically, the government needs to improve pay and working conditions offered to the ECEC workforce and strengthen career and qualification pathways within and into ECEC professions.

“The system can only be universal if every child is welcome. The Australian Government should increase funding to enable the inclusion of all children regardless of their ability or cultural background,” said Commissioner Martin Stokie.

A small group of children play at the Robertson Street Kindy Childcare Centre in Helensburgh south of Sydney, Australia, on April 3, 2020. AAP Image/Dean Lewins

To ensure the quality of ECEC services, the commission advised state governments to independently review the operation of their ECEC regulatory authorities.

The PC also suggested the federal government step in and provide additional funding to those regulatory authorities when necessary, enabling them to deliver timely quality assessments.

A Problem-Riddled Sector

The PC’s report comes as the ECEC sector continues to face significant workforce challenges.

In recent months, some major ECEC operators have announced enrollment caps at their centres due to severe labour shortages.

There have also been reports of parents being turned away because ECEC centres did not have enough staff.

Some education experts have stated that poor pay and low incentives were the main reasons for ECEC educators leaving the sector.

They also revealed that long-term labour shortages put great pressure on working staff while forcing ECEC centres to compromise the quality of their services.

Meanwhile, a report from the Australian Competition and Consumer Commission showed that Australian families spent much more money on childcare than other developed economies.

Childcare fees in Australia continued to be among the most expensive within OECD countries despite high government subsidies.