BY SENATOR NICK XENOPHON
I welcome the Senate Education and Employment Committee's report into
the immediate future of the childcare sector in Australia. In particular I
would like to thank the committee for giving each of the childcare inquiries
considered and specific attention, particularly due to the overlap in some of
the issues discussed.
Early childhood education and care (ECEC) plays an essential role in a
child's development but also that child's family's ability to participate in
the workforce. Despite this, the sector has faced and continues to face a
multitude of hurdles. Rising day care fees, increased regulatory compliance
requirements, relatively low wages and high rates of workforce attrition all
contribute to the difficult landscape in which providers and family must
I fully support the committee's comments and recommendations in their
report into the immediate future of the childcare sector in Australia. In
particular I was pleased with the committee's recommendation that 'the
government rescind its proposed budget changes to ECEC funding, particularly in
relation to (Child Care Benefit)'.
The Child Care Benefit ('CCB') and the Child Care Rebate ('CCR') are the
two main payments made by the Commonwealth to families to assist with the costs
of ECEC. The CCR which is not income tested and is paid to assist with the out
of pocket costs of childcare has been capped at $7500 for the next three years.
The rebate was frozen at this level in the 2010–2011 Budget.
The CCB is means tested and paid to lower income families at differing
rates, depending on the family's individual circumstances. The Government
intends to freeze the income thresholds for this benefit for three income
years. There is widespread opposition to this proposal as financial assistance
is failing to keep pace with increases in the cost of childcare and indeed the
broader cost of living.
The concerns about the state of the CCR and CCB were summarised by Ms
Gwynn Bridge, President of the Australian Childcare Alliance:
The subsidies that families receive for ECEC for their
children to be educated and cared for in high-quality and supportive
environments have eroded over the past decade. This erosion has occurred
through bracket creep and the freeze on the childcare rebate, together with the
CPI increases on childcare benefit failing to keep pace with the
ever-increasing costs of the provision of care. From budget 2014, families
using ECEC will again bear erosion of subsidies.
The importance of improving childcare affordability was highlighted by
the Grattan Institute, who in 2012 reported that:
Removing disincentives for women to enter the paid workforce
would increase the size of the Australian Economy by about $25 billion per
year. The most important policy change is to alter access to Family Tax
Benefit, and [C]hild Care Benefit and Rebate so that the second income in a
family – usually, but not always, a mother – takes home more income after tax,
welfare and child care costs.
Childcare costs have been increasing steadily, with some centres
charging up to $200 per day for their services.
The Australian Childcare Alliance conducted a parent survey which revealed how
price sensitive families are to changes in rates charged by providers:
...when fees increased by 10 percent approximately 48 percent
of parents would decrease their usage of childcare by one or more days or
withdraw completely from care. This result is exacerbated with a 20 percent
increase in fees, where more than 70 percent of families indicated they would
reduce usage by one or more days or withdraw completely.
It is clear affordability is a key issue for families. The fees
providers choose to charge are determined by a range of factors. The committee
heard evidence from a number of submitters and witnesses regarding the cost to
providers of implementing the National Quality Framework (‘NQF’), a unified
national system regulating childcare.
The objective of the NQF is to raise the quality of childcare and to
encourage continuous improvement and consistency in the ECEC sector. In order
to achieve these objectives providers are required to comply with the National
Quality Standard (‘NQS’), an instrument that sets benchmarks and applies
ratings to the services offered by the provider. The areas that are rated by
the NQS are:
Educational program and practice
Children’s health and safety
Relationships with children
Collaborative partnerships with families and communities
Leadership and service
I acknowledge that providers are able to use the rating given by the NQS
to demonstrate the strengths of their particular service. However I have
concerns regarding the regulatory burden imposed by the NQF and the NQS. I
raised these concerns with the Department of Education during the committee’s
public hearing in Canberra:
Ms Wilson: ... I think that what has happened is that
with all good intention people established processes and some of those
processes have added to layers of form-filling and red tape that people had not
Senator XENOPHON: Are you saying that the paradox is
that the intention of the process was to reduce red tape and an unnecessary
regulatory burden, but it has had the perverse outcome to some degree of adding
to that, because of the process?
Ms Wilson: That has been some of the feedback.
The Australian Childcare Alliance confirmed to the committee that 56
percent of their members reported that the introduction of the NQF has resulted
in them spending decreased or significantly decreased time with the children in
I agree that a national system improves consistency in what is required
of an ECEC provider, however I have serious concerns that a single over-all
rating is given rather than discrete ratings for each area. These concerns were
raised with the Department of Education:
Senator XENOPHON: Noting that quality area one is
'educational programs and practice', area two is 'children's health and safety'
and area seven is 'leadership and service management', some parents might view
'health and safety' or 'educational programs and practice' as having more
weight than the way in which the centre in managed, although the two obviously
can be linked together.
Ms Wilson: I agree with you. As parents we would want
to make sure that area two, health and safety, is well and truly covered, so
that when you take your child somewhere you know they are safe and that their
physical environment is actually—
Senator XENOPHON: The point I am making, perhaps from
a parent's perspective, is that they might have fantastic partnerships as
families and communities, under area six, and they might pass leadership and
service management with flying colours, and they might pass overall, but when
it comes to health and safety and educational programs and practice they might
be lagging behind. I think that is something parents would want to see. That is
the feedback I have been getting.
I strongly encourage the Australian Children’s Education and Care
Quality Authority (‘ACECQA’), the body leading the implementation of the NQF to
consider revising the rating mechanism to allow providers to receive individual
ratings for each of the seven assessable areas in order to improve transparency
and provide a more accurate snapshot of the childcare provider’s services.
That a separate rating is provided for each of the seven NQS areas
assessed by ACECQA.
I am also concerned that the assessment of childcare services by ACECQA
is running so far behind schedule. In ACECQA’s ‘NQF Snapshot’ for the first
quarter of 2014 (released in May) it states that as at 31 March 2014 of the 14 358
ECEC providers in Australia, only 35 percent had been assessed.
Concerns about the delay in assessing providers were echoed at the
committee’s public hearing in Melbourne:
One of the main things that are worrying the Australian
Childcare Alliance is that the task of assessment has been huge, and the states
are miles behind where they should be with assessing all the services around
Australia. I think even to this date not even half are done, but that could
have changed. What it means is that some services have already gone four years
without a compliance visit. They may still go another two or three years,
because the states are flat out trying to get through, and now those in the
first lot they assessed who got 'working towards', which only gave them one
year, are now coming up for reassessment. The assessment is just blowing out.
Clearly greater resources need to be applied to this assessment process in
order to properly implement the NQF and for the NQF to achieve its objectives.
The Government consider allocating more resources to ACECQA in order to
expedite the ECEC provider assessment process.
I also have concerns surrounding the capping of places for in-home care
(‘IHC’), particularly given its flexibility to respond to individual families’
needs. In its submission to the Productivity Commission’s inquiry into
childhood and early childhood education, the National In-Home Childcare Association
In-Home Care (IHC) is a capped, small, vital and integral
part of child care services for families and a highly successful part of the
early childhood mix and is presently only half of one percent of the Early
Childhood budget of more than $25 billion over the next four years.
IHC is recognition that some families do not have access to
other child care options for a range of reasons, including non-standard working
hours, which affects workers in a range of industries like emergency services,
health, tourism, performing arts, retail and manufacturing. Many families live
in remote locations with dispersed populations where there are no other forms
of child care.
Families wishing to use more flexible childcare options such as IHC may
be stopped from doing so for a number of reasons. Firstly the cap on places
limits supply, but where IHC educators are available families may be concerned
about the lack of formal mechanisms in place to regulate the industry. NICA has
proposed working with the Australian Nanny Association, Family Day Care and
governments to 'set-up a system of vetting and registration of educators to
ensure all child care educators deliver high standards of care for the children
they care for'.
NICA has proposed to extend the current cap by 25 000 places and to
require all IHC educators to be registered, to meet the standards required by
the NQF (for example, to require educators to have or be actively working
towards a diploma level qualification in ECEC or above) and to be vetted by
I support such a proposal as a sensible move towards providing more
flexible care options for modern, working families while ensuring these
educators are fit and proper people with appropriate qualifications.
The Government consider and provide a prompt response to NICAʼs proposal for
greater in-home care in Australia.
Senator Nick Xenophon
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