Some Recent Developments in Child Care: 1 January 1994-30 September 1995

Current Issues Brief 6 1995-96

Mary Lindsay
Social Policy Group


Major Issues


The Commonwealth Childcare Cash Rebate Scheme

The Commonwealth Childcare Assistance Scheme (Fee Relief)




Appendix 1

Chronology Of Major Developments in Child Care, 1990-1994

 Appendix 2

Relationship Between Childcare Assistance and Childcare Rebate

Appendix 3

National Quality Improvement and Accreditation System

Major Issues

The main objective of the Commonwealth's child care policies is to improve the affordability, quality and supply of child care places, with particular emphasis upon the needs of working parents.

 Two measures designed to improve the affordability of child care are the Commonwealth Childcare Cash Rebate Scheme (the Rebate) and the Commonwealth Childcare Assistance Scheme (Childcare Assistance). Other measures, such as operational subsidies, fall beyond the scope of this paper. The introduction of the Rebate in July 1994 and recent proposed changes to Childcare Assistance have been accompanied by renewed debate on the way in which child care is currently organised and funded in Australia.

 There is no agreement on whether financial assistance with the costs of child care should be considered a welfare measure, targeted to low and middle income earners, or a work related expense, available to all working parents. As currently organised, Childcare Assistance falls into the former category and the Rebate into the latter category.

 Some commentators question the need for policies designed, in part, to assist women with young children to enter or remain in the work force at a time of (relatively) high unemployment. Others stress the importance of female labour force participation in assisting women and children out of poverty and dependence on the welfare system.

Existing child care policies and funding measures focus on the needs of parents rather than those of children. Even more narrowly, they focus on the needs of working parents. Thus guidelines governing access to child care services accord higher priority to the children of working parents than to children at risk of abuse or neglect. This is among the issues raised in debate on the Child Care Legislation Amendment Bill, now before the Parliament.

Another focus of Commonwealth attention in child care is to establish adequate standards of care in what was until recently a largely unregulated industry. To this end it introduced the National Quality Improvement and Accreditation System (NQIAS) in July 1994.

Initial concerns relating to the cost of the system have been largely allayed. The need for adequate standards is not in dispute but there remains some doubt about the extent to which the NQIAS will achieve that objective. While most child care centres have registered to join the NQIAS - thus ensuring their eligibility for government financial assistance - the process of accreditation has only just begun. If successful it is likely that the accreditation system will be extended beyond the long day care centres to which it is currently restricted.


Child care in Australia is a complex policy area which has received a great deal of attention in recent years. This paper looks at three of the many interrelated issues which have been the focus of policy attention. They are:

  • the Commonwealth Childcare Cash Rebate Scheme
  • the Childcare Assistance Scheme
  • accreditation.

The paper examines developments in each of these areas from the beginning of 1994 to September 1995 and indicates the direction of likely future developments. Disparate views on the Rebate, Childcare Assistance and accreditation are symptomatic of the broader debate on child care, some aspects of which are referred to in this paper.

The Commonwealth Childcare Cash Rebate Scheme

Description of Scheme

The Childcare Cash Rebate Scheme is a Commonwealth funded program introduced on 1 July 1994 to assist eligible Australian families with the cost of work related child care expenses for dependent children under 13 years of age.

Eligible families are those in which the parents are working, studying, training or looking for work. Their children must be cared for by a person or body approved, registered or licensed to provide such care. Care can be provided in a range of settings including long day care, family day care, vacation care etc. It can also be provided by a relative such as a grandparent, in the child's own home or the relative's home, if the relative qualifies for registration. This is a new development. All previous financial assistance has been linked to formal child care.

Families pay the first $16.50 of weekly child care costs and can then claim 30% of their remaining weekly child care costs up to a maximum of $112.50 for one child or $225 for two or more children. The maximum weekly Rebate is $28.80 for one child and $62.55 for two or more children.(1) The Rebate complements the Childcare Assistance Scheme (see later) as it is payable on the amount paid by a family after Childcare Assistance has been deducted. The Rebate is indexed annually.

The Childcare Cash Rebate Scheme is administered by the Health Insurance Commission through its Medicare offices. Eligible families are required to register and establish with Medicare that the child care expenses for which they are seeking a Rebate are work related. (Work related is defined as including: in paid employment, registered with the Commonwealth Employment Service, training, studying, in receipt of the Carer Pension, in receipt of the Domiciliary Nursing Care Benefit.)(2) Rebate payments are based on the presentation of receipts from registered carers. Payments are not means tested.

The total cost of the Rebate to the Commonwealth was estimated at $152m in the 1994/95 Budget, on the assumption that 230,000 eligible families would claim it. Initial take up rates were low. At 1 February 1995 only 153,000 families had claimed it, (although 203,000 had registered) at a cost of $43m.(3) However, by 18 September 1995, 272,072 families had registered and 230,232 had claimed,(4) so government expenditure on the Rebate is likely to be close to the original estimate.

The Rebate is an acknowledgment of the costs of child care for families where both parents, or single parents, are working. This is an increasingly large group. Labour force participation by women with a child under ten increased by 45% between 1983 and 1994 (from 552,500 to 802,500)(5) The Rebate is a recognition that child care expenses are a legitimate cost incurred in earning an income which should be reimbursed, just as other work related expenses are reimbursed through tax deductions. The Rebate has been preferred to deductions through the tax system because the latter approach would provide minimum benefit to low income earners. (Tax concessions apply to employers who provide child care facilities or places for children of their employees).

Policy Implications

Supporters of the Rebate consider its significance derives from its recognition that child care assistance is not a welfare measure but a work related expense. That is why it is not means tested and why it is paid through Medicare rather than through the Department of Social Security.

The focus of criticism has been on the universal nature of the payment, the effect of which is to spread available resources thinly across the well off and the needy. It is claimed that the Rebate, unlike Childcare Assistance, is in fact highly regressive.(6) This is because people receive the Rebate on expenses incurred after other assistance such as fee relief has been paid. Poorer families, because they receive fee relief, tend to have lower out of pocket expenses for child care than higher income earners and thus receive less than the maximum Rebate while middle and high income earners receive the full Rebate. Families receiving full fee relief are not eligible for the Rebate.

The critics have categorised the Rebate as "middle class welfare" and "rebates for millionaires."(7) They compare it unfavourably with the basic rate of Parenting Allowance which, from 1 July 1995 replaced the Home Childcare Allowance, (which had itself replaced the Dependent Spouse Rebate in September 1994). The Parenting Allowance is means tested on the income of the parent at home. The maximum basic rate of Parenting Allowance is $61 per fortnight.(8)

A further and related criticism points to the inequity of directing payments to families with two parents in the work force rather than families without either parent employed. An extension of this view - expressed in relation to all child care assistance and not just the Rebate - questions the whole idea of providing incentives for women with young children to remain in the work force at a time of (relatively ) high unemployment. The opposing view - again relevant to all child care assistance - stresses the importance of female labour force participation in assisting women and children out of poverty and dependence on the welfare system and in ensuring that women's skills and education are not lost to the work force, (although it could be argued that a targeted scheme would be equally capable of achieving these objectives).

The Commonwealth Childcare Assistance Scheme (Fee Relief)

Description of Scheme

This is a Commonwealth funded scheme to assist parents on low and middle incomes with the costs of quality child care services.

The Childcare Assistance Scheme, formerly known as Fee Relief, provides funds to approved child care services in advance, so that they can charge eligible families a lower fee than they would otherwise pay. Fees can be reduced by up to 85% for one child in care and more for two or more children in care. The amount of Childcare Assistance is calculated on a sliding scale according to family income and number of dependent children. Assessment of income for Childcare Assistance purposes is undertaken by the Department of Social Security.

Maximum assistance is paid to families earning $485 per week or less before tax with one child in full time care and more where other children are also being cared for. They are entitled to $96 in Childcare Assistance each week. Families must pay the service $16.50 per week and any additional charges above the fee ceiling of $112.50 per week. If charges do not exceed the fee ceiling and families pay only $16.50 per week then they are not eligible for the Rebate.(9)

At the other end of the income spectrum, families remain eligible for some Commonwealth Childcare Assistance until their before tax incomes reach $1,181 a week, for families with one dependent child in care, or $1,431 for families with two dependent children in care. Income levels increase for families with more than two dependent children.

The relationship between Childcare Assistance and the Childcare Cash Rebate is illustrated in examples provided by the Department of Human Services and Health and reproduced in Appendix 2.

The maximum fee, or fee ceiling, on which Childcare Assistance will be paid is $2.25 an hour, up to $112.50 for 50 hours a week. These rates apply in approved long day care centres, family day care schemes and some occasional care centres.

Lower rates apply in approved outside school hours care services. In these services Childcare Assistance is paid at the rate of 69 cents per hour for families receiving full Additional Family Payment (defined as those with an annual income of less than $21,700 in the case of families with one dependent child)(10) or 37 cents per hour for children in families receiving part Additional Family Payment (with an annual family income limit of $25,194).

It is claimed that the lower subsidy has limited the use of outside school hours care by low and middle income families and encouraged them to place school age children in services attracting the higher rate of subsidy, thus increasing the cost to the Commonwealth and reducing the use and viability of outside school hours care.(11) Furthermore, some outside school hours care centres find the limited Childcare Assistance for which they are eligible does not warrant the administrative effort required to obtain it and therefore do not offer it. Thus some families who might be entitled to Childcare Assistance do not receive it.

Where child care services charge more than the fee ceiling the additional costs must be met by the family. These costs are known as the gap fee. Some families may be eligible for a rebate of part of the gap fee under the Commonwealth Childcare Rebate Scheme.

As in the case of the Rebate, eligibility for Childcare Assistance is restricted to families whose children are being cared for by registered child carers. In the case of Childcare Assistance the carers must be centre based or working in family day care, whereas for the Rebate, eligibility extends to registered informal carers. In addition, since 1 January 1994 all long day care centres applying for Childcare Assistance have been required as a condition of eligibility to comply with standards established under the Accreditation and Quality Assurance System (see later section).

Childcare Assistance is the Commonwealth's major financial contribution to child care. It allocated $745 million to this purpose in the 1995-96 Budget. Expenditure has grown very rapidly, especially since the extension of Childcare Assistance to children in the private child care sector in 1991. Unlike the Rebate, the strictly targeted nature of Childcare Assistance ensures that its benefits are directed to low and middle income earners. The 1993 Census of Child Care Services indicates that 76% of all families using long day care receive some assistance, with 52% receiving the maximum level of help available.(12)

The Commonwealth also funds organisations providing child care through building and equipment funding, operational subsidies, one off grants, supplementary services grants (SUPS) to cover the costs of additional workers in centres caring for children with special needs and Special Childcare Assistance for services caring for children whose families have suffered "severe and sudden financial hardship." Some grants are available only to community based (non profit) services.


Policy Implications

Certain contradictions are evident in existing arrangements for the funding of child care. The Commonwealth's major objective is to ensure that child care is affordable and high quality and that it is available to parents in the work force or seeking to enter it. While Childcare Assistance reduces the cost of child care for lower and middle income earners its effects are eroded by gap fees, imposed by those child care services charging more than the fee ceiling. The 1993 Census of Child Care Services indicates that 85% of services (excluding family day care) charge gap fees, with fees averaging $16 per week.(13) This has a significant impact on the affordability of child care, particularly for low income earners and parents who are studying in order to return to the work force. It undermines government efforts to encourage parents into the paid work force and to retain them there. The impact of gap fees may in turn be modified for some families by reimbursement via the Childcare Rebate.

While the Commonwealth could increase the fee ceiling and thus reduce or eliminate gap fees this could be very costly, certainly for government and possibly also for users. It might encourage some services operating within the current ceiling to increase fees to the new ceiling, resulting in higher fees for all parents except those receiving maximum Childcare Assistance. The problem for government is that although it can control the fee ceiling and the rate of Childcare Assistance it cannot control the fees charged by services.

A further deficiency of Childcare Assistance, as currently structured, is that it provides the same rate of subsidy regardless of the cost to the centre of providing the service. For this reason private centres in particular have failed to provide adequate places for children under three, which are more costly than places for older children. Where centres provide these services fees are higher and they cannot generally be fully recouped through Childcare Assistance.

The single rate of Childcare Assistance has exacerbated the current undersupply of places for under three year olds by discouraging private services from providing baby care and failing to recompense centre -based services that provide it to meet community needs.(14)

Although the Commonwealth's primary objective in funding Childcare Assistance is to support parents' labour force participation it relies on services to ensure that children of working parents receive priority in access to services. Guidelines issued by the Commonwealth set out four groups to receive priority of access. They are, in decreasing order of priority: children of parents in the paid work force (or looking for work, studying etc); children or parents with a continuing disability; children at serious risk of abuse or neglect; and children of parents at home with more than one child below school age.(15) Within each priority category services are required to take into account the particular needs of low income families, socially isolated families, Aboriginal families and those from non English speaking backgrounds.

Once a child is admitted to a service parents receive Childcare Assistance on the basis of their income, regardless of the reason for placing the child in care. The Government has expressed concern about the amount of Childcare Assistance channelled in this way to parents not in the work force. The 1995-96 Budget papers estimated this at 25% of total Childcare Assistance. They estimated that it is increasing by 2% per year because of the increasing use of substantial periods of occasional care in the long day care sector by families with a parent outside the workforce.(16) The 1993 Census referred to above indicated that 18% of total hours of attendance in child care were by children whose parents were not in the work related highest priority group.

The proposed 12 hour limit

For the reasons detailed above, the Government proposed (in the 1995-96 Budget and in legislation now - as at September 1995 - before Parliament)(17) to limit the amount of subsidised child care for the children of non working parents to 12 hours per week, with parents paying full fees for additional hours of care. (These proposed changes apply to the long day care sector only. Access to occasional care in Commonwealth funded occasional care centres is already restricted to one session, or four hours, per week). The figure of 12 hours was decided upon because it represents the median use of child care services by non working parents. The 12 hour limit is consistent with the approach advocated by the Australian National Audit Office.

 To meet demand for work-related care by the year 2001 cost-effectively, the Department [of Human Services and Health] will need to ensure lower priority non-work-related care is minimised.(18)

These arrangements are scheduled to come into effect on 1 April 1996.

This proposal has aroused strong opposition on several grounds. Opponents argue, firstly, that although it has been promoted as a cost saving measure it will in fact increase costs as parents move children to more highly subsidised forms of care such as pre-schools and kindergartens, where these are available. Their capacity to do so will however be limited, in some areas at least, by State government moves to reduce funding to pre-schools. Where they are able to do so, this will have implications for cost shifting between the Commonwealth and the States, since pre schools and kindergartens are mainly a State government responsibility while other forms of child care are predominantly Commonwealth funded.

Critics also point to the inequities of the proposal since families with the same income would pay different amounts for care, depending on whether one or both parents were in the work force. They further claim that, in some cases where demand for child care by working parents is now largely being met and vacant places are offered to children of non working parents, withdrawal of this latter group could threaten the viability of some centres, thus placing at risk the care of children of working parents.(19)

The administrative complexity and financial costs associated with implementation of a 12 hour limit were noted by a number of witnesses to the Senate Community Affairs Committee inquiry which examined the proposal on 25 August 1995(20) (see later).

The Government view however is that many working families cannot gain access to the care they need and that their interests should be met before those of non working parents. They also point to inequities in access to occasional care under current arrangements, which result in some families using substantial amounts of occasional care while many others have no access at all. The Government estimates that the 12 hour proposal will improve access for 31,000 additional families requiring work related or occasional care in the long day care sector.(21)

Some critics have also highlighted the likely deleterious consequences of limiting child care assistance for children at risk of abuse or neglect or children otherwise disadvantaged, except in cases in which their parents are employed. The long term costs of such a policy might well outweigh the immediate savings to government. The Government has stated however that:

Full Childcare Assistance will continue for children at risk, families with an incapacitated parent, parents eligible for the Carers' Pension, and parents studying or doing voluntary work to gain work experience.(22)

Criticisms emerging initially in response to the proposal to limit Childcare Assistance for children whose parents are not in the work force have brought to the fore broader concerns about the way in which child care is currently organised and funded in Australia. Specifically, they have focussed attention on the priority accorded to parents rather than children in current arrangements.

Historically, child care provision has focussed on the needs of children (or sometimes families), irrespective of the work force status of their parents. The existing emphasis on the needs of working parents rather than those of children dates only from 1984. Since 1985:

Apart from children at risk from serious abuse or neglect, the claims on SFCP places by children disappeared altogether, and have never re-emerged.(23) 

As noted, even children at risk are ranked third out of the four priority access groups identified.

Following widespread expressions of concern by parents, child care associations and the Opposition,(24) the proposed legislation - the Child Care Legislation Amendment Bill of 1995 - was referred to the Senate Community Affairs Legislation Committee on 28 June 1995 for further consideration. The Committee presented its report(25) to the Senate on 30 August 1995.

Report of the Senate Committee

The report canvassed a range of issues including:

  • insufficient consultation on the proposed changes
  • alleged failure by the Commonwealth to plan the growth of child care services
  • the open ended nature of Childcare Assistance - leading to alleged abuse or over utilisation
  • ineffective implementation of priority of access guidelines by services
  • likely adverse impact on children, (especially those from disadvantaged families), whose access to services is restricted
  • possible threat to the viability of some services
  • implications of current and proposed arrangements for cost shifting between the Commonwealth and the States.

While the majority of the Committee supported the Bill, two dissenting reports were submitted. One, by Coalition members, pointed to the particularly harsh impact the proposal was likely to have on low income families unable to purchase additional hours of care, and to the possible adverse commercial implications for private child care centres unable to utilise the spare capacity resulting from the imposition of the 12 hour limit.

Coalition members did not accept the view of the Department of Human Services and Health that current guidelines governing priority of access to child care are inadequate in ensuring that working parents receive priority. They argued that the proposed changes should be suspended until the government can demonstrate that inappropriate growth has occurred in non work related care and that children will not be disadvantaged by the proposed changes.

A second dissenting report was presented by the Australian Democrat member of the Committee. While recognising a case for limiting the non work related care provided at new centres, the Australian Democrats did not support a 12 hour limit, nor did they favour immediate amendment of the legislation. They suggested any changes be implemented only after widespread consultation (including the consultations scheduled as part of the Council of Australian Governments (COAG) consideration of Commonwealth - State responsibilities for child care), and not before January 1997 at the earliest.

The issues raised by the Committee remain unresolved. The Bill was reintroduced into the Parliament on 20 September 1995 but Green, Democrat and Coalition members have combined to delay its consideration until 20 November 1995, citing concern with the detail rather than the general approach of the legislation (in the case of Green and Democrat members, although Coalition members opposed its content) and the need for further consultation.


Description of the National Quality Improvement and Accreditation System

Until 1994 the Commonwealth Government had to rely primarily on State government licensing laws to ensure that child care services maintained appropriate standards. These laws were mainly concerned with the physical environment in which child care was provided and they varied significantly between States.

The National Quality Improvement and Accreditation System (NQIAS) came into effect on 1 July 1994. The objective of the system is to set standards for quality in what was previously a largely unregulated industry. These standards relate only to long day care centres, both community based and private. The introduction of the system was prompted by the Commonwealth's extension of Childcare Assistance to private centres in 1991 and the realisation that large amounts of Commonwealth funding would, as a result, be directed to centres over which it had very little control.

The system is administered by the National Childcare Accreditation Council (NCAC), the members of which are drawn from parents, the community based and private child care sectors, trainers and educators, unions and government. The Council is chaired by Ms Quentin Bryce, AO. The Commonwealth has set down 52 principles and standards governing quality of care and covering, for example, health and safety, nutrition, relationships between staff and children and staff and parents and centre management. These principles are listed in Appendix 3.

There are four categories for standards of practice...; unsatisfactory, basic, good quality and high quality. For accreditation it is necessary to achieve at least 'good' in 20 specific principles and basic or higher in the other 32.(26)

Self assessment by staff, in consultation with parents, is the basis of accreditation. Reviewers appointed by the NCAC help centres to assess and achieve the necessary standards and NCAC moderators ensure some degree of consistency in standards across centres. If the NCAC concludes that a service has not made satisfactory progress over two previous review periods, with no good reason given, it may advise the Minister that a centre is 'of concern.' This may, but need not, result in the Minister naming the service in Parliament, withdrawing Childcare Assistance and also, possibly, the centre's operational subsidy.

The accreditation system is tied to Commonwealth funding of Childcare Assistance. Only child care centres registering for the NQIAS and meeting the standards of care established in its principles are eligible for Childcare Assistance. Without such Assistance most centres would not be financially viable. In any case, once details of the accreditation system are better understood by parents, it is unlikely that they would be happy to enrol their children in centres failing to meet the principles governing quality.


Policy Implications

The introduction of the accreditation system was initially opposed both by the child care industry and by the Coalition parties. Cost was a major concern. Some early predictions were highly alarmist.

By forcing up child-care costs, the proposed accreditation system is likely to impede the functioning of labour markets and reduce the benefits that society derives from investments in training women. This will be reflected in family living standards that are lower than they otherwise might be.(27)

The reality has proved otherwise.

A cost estimate commissioned by the interim council [of the National Childcare Accreditation Council] put the costs of accreditation to centres at 80 cents per childcare place per week on a three-year basis. This is to cover components such as registration, resourcing and in-service training.(28)

An evaluation of the accreditation system conducted by Coopers & Lybrand and completed in June 1995 concluded that:

On average, the additional cost of introducing QIAS has amounted to $2.71 per licensed child place per week since the start of QIAS....Using adjusted costs, which we believe to be a more accurate estimate, the additional cost has been $1.95 per licensed child place per week.

...we would not expect these additional costs to be on-going, but rather, believe they reflect the costs of familiarisation and participation in a new system.(29)

Some commentators have questioned the motivation of those opposing accreditation in terms of its costs, one observing that:

The process of accreditation is likely to alert parents and staff to ways in which the functioning of their services might be altered to improve outcomes for children. Effectively, it will enable them to challenge the power of private operators over the management of their services. The real 'threat' of accreditation is not to do with monetary costs, it is to do with questioning of power and control.(30)

Another major concern was the capacity of a system based on subjective and probably unenforceable criteria, such as "staff communicate well with each other" (principle 14) to improve the quality of care. The potential for reviewers to pass politically correct, ideologically based judgements on centres was also of concern to some critics. Indeed, some suggested that the accreditation process could be misleading, providing assurance to parents that their children were being cared for in accredited centres when in fact standards of quality remained unchanged.

While some centres remain concerned about certain aspects of the accreditation system, notably the staff time involved in self assessment and review (which the Coopers & Lybrand study referred to above assessed as an average of 60 hours per centre for an initial review) the consensus seems to be that the system has generally contributed to an improvement in standards. On this basis it is supported by the majority of centres and by parents.

Mr David McCauliffe of the Private Childcare Association of Victoria has commented that:

When you're dealing with the development of children you have to assure parents that they are getting the best quality care possible.... Parents can now be confident that the quality of care in Australia's child-care centres is up to a world standard.(31)

Overwhelmingly, centres believed that they have improved their quality of care for children since participating in QIAS. This improvement has occurred, on average, across all the 52 principles. Most respondents were very positive about the way in which QIAS has brought about improvements in the quality of their work.(32)

Before the accreditation system was introduced its opponents in the child care industry made dire predictions about government interference, suggesting that the NCAC would (among other things) order the removal of dolls from centres, deny little boys the right to play with trucks and ban Christmas carols. Most have been reassured by subsequent developments, although a small number of centres, most notably private centres represented by the Association of Child Care Centres of NSW, remains implacably opposed to the system on ideological grounds, and because of its cost and the linking of fee relief with compliance.

Some of their concerns were articulated in a recent media release by Senator Julian McGauran, criticising the Government's decision to double the number of reviewers for the NQIAS.

Bolstering the number of reviewers will give all the appearance of a kindergarten police force.

Since the introduction of the [NQIAS] handbook, government officials have banned children at pre-schools from enjoying Christmas carols, Santa Claus and now grace before meals.

...The new 600 strong reviewers will intimidate childcare operators to join the experiment under the threat of funding withdrawal.(33)


The overall success of the system in the 18 months since its inception was detailed in a recent speech by Senator Rosemary Crowley, Minister for Family Services.

Of the 3,580 long day care child-care centres in Australia, only a few have chosen not to participate at this stage.

In South Australia, Queensland, Tasmania and the Northern Territory all centres have registered. ...The National Childcare Accreditation Council is waiting for seven centres in New South Wales, five in Victoria and one in Western Australia to register.(34) 

It is important to note however that these figures relate only to registration - the first stage in the process - and not to accreditation. By 14 September 1995, 3619 centres had registered but only 344 had completed the accreditation process.(35) It is anticipated that all registered centres will complete the accreditation process within two years.


This paper has focussed on three child care issues which are currently the subject of considerable public debate. Other major issues beyond the scope of this paper but which are influencing the debate include:

  • the extent to which child care can be considered a feminist issue
  • the extent to which child care is a public, as opposed to a private responsibility
  • the extent to which child care fulfils a welfare rather than an educational function
  • the desirability, feasibility and scope for extending accreditation arrangements beyond the long day care sector to which it is currently restricted
  • the necessity of, and capacity for, child care centres to offer more flexible and innovative care for children of both working and non working parents
  • a reassessment of the relative priority accorded to children and to parents in current child care arrangements
  • the adequacy of existing planning mechanisms to meet projected demand for child care places
  • improved coordination between child care and related services
  • Commonwealth - State responsibilities for child care.

Some of these issues are to be examined by the Economic Planning Advisory Commission Task Force on the Future of Child Care Provision in Australia. The Task Force was established by the Prime Minister in August 1995. It will provide a preliminary report in March 1996 and a final report in July 1996. Its mandate is to suggest directions for child care in Australia in the medium to longer term.



  1. Figures are from 'Rates for Commonwealth Childcare Assistance and the Commonwealth Childcare Cash Rebate,' published by the Department of Human Services and Health. Rates are effective until 31 March 1996.
  2. Childcare Rebate Act 1993, sections 28,29,30,31.
  3. Anita Catalano, 'Back to the Kitchen?', in the Age, 19 February, 1995
  4. Information provided by Office of Minister for Family Services, Senator the Hon Rosemary Crowley
  5. 'Labour Force Status and Other Characteristics of Families, Australia, July 1983,' Australian Bureau of Statistics, Cat. No. 6224.0 and 'Labour Force Status and Other Characteristics of Families, Australia, June 1994,' Australian Bureau of Statistics, Cat. No. 6224.0
  6. (Unpublished) analysis of child care funding conducted by the National Centre for Social and Economic Modelling, reported in the Australian, 7 July, 1995
  7. 'Employ means test to take childcare cash from wealthy,' Mike Steketee, Australian, 10 February 1995 and Senator Nick Minchin, Media Release, 6 February, 1995
  8. Figures from Department of Social Security pamphlet, 'Family Payment Rates & Parenting Allowance, 1 July - 19 September 1995'
  9. Figures are from 'Rates for Commonwealth Childcare Assistance and the Commonwealth Childcare Cash Rebate,' published by the Department of Human Services and Health. Rates are effective until 31 March 1996
  10. Figures are from Department of Social Security pamphlet, 'Family Payment Rates & Parenting Allowance, 1 July - 19 September 1995'
  11. 'Child Care for Kids,' The Law Reform Commission, Report No. 70, 1994:47
  12. 1993 Census of Child Care Services, Commonwealth Department of Human Services and Health: 5
  13. Ibid: 32,63,93,123
  14. 'Mind the Children,' Audit Report No. 42, 1993-94, Australian National Audit Office:xxi
  15. 'Commonwealth child care fee relief and operational subsidies; an issues paper,' Commonwealth Department of Health, Housing and Community Services, 1992: 36
  16. Portfolio Budget Statements 1995-96, Human Services and Health Portfolio, Budget Related Paper No. 4.9: 129
  17. The Child Care Legislation Amendment Bill 1995 was introduced into the House of Representatives on 7 June 1995.
  18. ANAO, Media Release for its Report 'Mind the Children,' Audit Report No. 42, 1993-94, 28 June 1994.
  19. Melissa Ketchell, 'Childcare industry blasts Budget limits on assistance,' Australian, 17 June 1995.
  20. Senate Community Affairs Legislation Committee inquiry into Child Care Legislation Amendment Bill 1995, 25 August 1995, Hansard! 19, 27.
  21. Portfolio Budget Statements 1995-96, Human Services and Health Portfolio, Budget Related Paper No.4.9:129, 130. See also Child Care Legislation Amendment Bill 1995, Second Reading Speech.
  22. Senator Rosemary Crowley, Minister for Family Services, in speech to general meeting of the Australian Confederation of Childcare Centres, Adelaide, 1 July 1995:3-4
  23. Jean Gifford, 'Child Care Funding Re-assessed: Operational Subsidies, Fee Relief and Taxation Issues, 1992:31
  24. See, for example, Media Release by Dr David Kemp, 20 June 1995.
  25. Senate Community Affairs Legislation Committee, 'Report on the Child Care Legislation Amendment Bill 1995'
  26. 'The search for quality childcare,' Choice, November 1994:15
  27. Geoff Hogbin, 'Searching out the best deal for kids,' Canberra Times, 23 November 1992
  28. 'The search for quality childcare,' Choice, November 1994:15
  29. Coopers & Lybrand Consultants, 'Evaluation of the Quality Improvement and Accreditation System for Long Day Care Centres,' Vol 1, June 1995:11
  30. 'The Politics of Australian Child Care. From Philanthropy to Feminism,' Deborah Brennan, 1994:204
  31. 'Child Care Update '95,' The Sunday Age, 2 July 1995
  32. Coopers & Lybrand Consultants, 'Evaluation of the Quality Improvement and Accreditation System for Long Day Care Centres,' Vol 1, June 1995:7
  33. Media Release by Senator Julian McGauran, 20 September 1995.
  34. Senator Rosemary Crowley, Senate Hansard, 24 August 1995:349 (All ACT centres have also registered).
  35. Figures supplied by Department of Human Services and Health

Appendix 1

Chronology Of Major Developments In Child Care, 1990-1994

(Based on an earlier chronology prepared by Consie Larmour, Social Policy Section, Parliamentary Research Service)

March 1990 Election Platform

The Prime Minister announced funding for an additional 50,000 child care places by 1995.

Fee relief extended to commercial child care centres, a move estimated to provide an additional 28,000 places.

Increases to the levels of fee relief and to the income threshold for maximum fee relief. Eligibility for some fee relief extended to people in a broader income range.

Extension of the industry initiative to the public sector, which gave public service departments, statutory authorities and Government Business Enterprises the opportunity of providing work-based child care.

1991-92 Budget

The threshold for maximum fee relief raised from 1 April 1992 to align with Family Allowance Supplement, with increases in fee relief available up to the cut-off points.

A two-tiered fee relief system proposed to operate from 1 January 1992, with the higher rate available for 'work related' child care.

A national accreditation system to be established. From 1 January 1994 all child care centres receiving fee relief will have to be accredited.(Subsequently restricted to child care centres providing long day care).

An assets test on fee relief eligibility, in line with the test for Family Allowance Supplement, to be introduced from January 1992.

Supplementary Services (SUPS) Grants were increased to provide for children with disabilities and those with special needs in commercial or employer sponsored child care.


The planned two-tier fee relief system was not implemented because of community opposition.

A review of operational subsidies and fee relief recommended the continuation of direct operational and fee subsidies to services, and capital subsidies for planned growth.

A Functional Review of Child Care was conducted by the Commonwealth/State Working Party on Nationally Consistent Standards to reduce duplication of responsibilities and to achieve greater standardisation of State regulations.

February 1993 Election Platform

The Prime Minister announced the Childcare Cash Rebate for work-related child care expenses in formal or informal child care, to take effect from 1 July 1994.

A Home Child Carers Allowance of $60 per fortnight was announced, to replace the Dependent Spouse Rebate. No date was then set for implementation other than 'within the term of this Parliament'. (Both have now been subsumed into the Parenting Allowance).

In December 1993 the Childcare Rebate Bill passed both Houses with one amendment to the definition of 'family' to ensure that eligible partners were of the opposite sex.


Council of Australian Governments (COAG) review of child care began in February 1994, looking at Commonwealth - State responsibilities, and especially the interface between child care and pre schools. No consensus yet reached. Consultations to be held (October - December 1995) on a national framework for child care.

Childcare Cash Rebate Scheme introduced on 1 July.

National Quality and Improvement Accreditation System came into effect on 1 July.

Home Child Care Allowance came into effect on 29 September 1994.


Appendix 2

Relationship Between Childcare Assistance and Childcare Cash Rebate - Some Examples

(Taken from "Your guide to child care," produced by Commonwealth Department of Human Services and Health)


  1. A family earning $485 (gross), or less, each week with one child who is in full time care costing $112.50 per week will be entitled to $96 Childcare Assistance. They will pay the service $16.50 of which they will receive back nil Childcare Cash Rebate.

  2. A family earning $700 (gross) each week with one child who is in full time care costing $112.50 per week will be entitled to $66.30 Childcare Assistance. They will pay the service $46.20 of which they can claim $8.95 back in Childcare Cash Rebate.

  3. A family earning $700 (gross) each week with two children who are both in full time care costing $225 per week will be entitled to $164.40 Childcare Assistance. They will pay the service $60.60 of which they can claim $13.25 back in Childcare Cash Rebate.

  4. A family earning $900 (gross) each week with two children both in full time care costing $225 per week will be entitled to $119.40 Childcare Assistance. They will pay the service $105.60 of which they can claim $26.75 back in Childcare Cash Rebate.

All figures effective until 31 March 1996.



Appendix 3

National Quality Improvement and Accreditation System - The 52 Principles and Standards of care

Part A: Interactions

  1. Staff interactions with children are warm and friendly.

  2. Staff treat all children equally and try to accommodate their individual needs: they respect diversity of background.

  3. Staff treat all children equally and try to accommodate their individual needs: they treat both sexes without bias.

  4. Staff use a positive approach in guidance and discipline.

  5. Staff are responsive to children's feelings and needs.

  6. Staff initiate and maintain communication with children, and their communication conveys respect.

  7. Staff show respect for children's developing competence, and foster their self-esteem and independence.

  8. Staff interact with children to stimulate their curiosity and thinking.

  9. Staff create a pleasant atmosphere.

  10. There is written and verbal communication with all families about the centre.

  11. There is active exchange of information between parents and staff.

  12. There is an orientation process for new children and parents.

  13. Parents and other family members are encouraged to be involved in the program.

  14. Staff communicate well with each other.

  15. Staff show respect for other members of the team.

    Part B: The Program

  16. The program is planned to reflect the centre's philosophy and goals.

  17. The program incorporates learning experiences appropriate for each child, as indicated by development records maintained by the centre.

  18. The program gives children the opportunity to make choices and take on new challenges.

  19. The program fosters personal and social development.

  20. The program fosters fine and gross motor skill development.

  21. The program fosters creative development and aesthetic awareness.

  22. Toileting and nappy changing procedures meet individual needs and are positive experiences.

  23. Sleep time and dressing procedures meet individual needs for rest, comfort and self-help.

  24. Meal times are pleasant occasions.

  25. The program provides a wide range of individual and group experiences.

  26. A daily timetable is planned to reflect children's needs, abilities and interests.

  27. Procedures for routine activities are flexible and developmentally appropriate.

  28. Transitions between activities are smooth.

  29. The program fosters intellectual development.

  30. The program fosters language development.

  31. There is a balanced and developmentally appropriate program.

  32. The program provides for children with special needs.

  33. The program is regularly evaluated in the light of stated goals.

    Part C: Nutrition, health and safety practices

  34. Staff are alert to the health and welfare of each child.

  35. Staff try to ensure that children are clothed appropriately for indoor and outdoor play and for sleep.

  36. Food and drinks meet children's daily nutritional requirements and are culturally appropriate.

  37. Meal times promote healthy nutritional habits.

  38. Food is prepared and stored hygienically.

  39. Staff adhere to hygiene principles which reduce the spread of infectious diseases.

  40. Staff encourage children to follow simple rules of hygiene.

  41. Potentially dangerous products are inaccessible to children.

  42. Buildings and equipment are safe and hygienic.

  43. The centre maintains a record of children's immunisations.

  44. The centre has written policies on hygiene, medical, emergency and accident procedures.

  45. Staff are familiar with medical, emergency and accident procedures.

  46. Staff supervise children at all times.

  47. Information on health and other related issues is readily available to the staff.

    Part D: Centre management and staff development

  48. Staff and parents consult on the program and evaluate it together.

  49. New staff are informed about the philosophy and goals of the centre.

  50. The centre provides regular learning and training opportunities for staff.

  51. The staff roster is arranged to provide continuity of care.

  52. Information about the centre's management is readily available to staff and parents.