The Nick Xenophon Team (NXT) is concerned that the childcare reforms
will only go ahead if savings from cuts to family tax benefits are achieved. Affordable
early childhood education and care (ECEC) should not be contingent upon the
Government passing Family Tax Benefit savings measures.
During committee hearings, Mr Manderson, Deputy Director of Anglicare
Australia, highlighted that the linking of the two bills is arbitrary. He noted
...as far as I am aware, government has never argued that
drought assistance can only be sustained if we cut back on supporting people
dealing with floods or bushfires. Nor have I heard any minister argue that
veterans' entitlements should be cut to cover the increase in
the cost of new aircraft.
We note that the Early Learning and Care Council of Australia raised
during the hearings that the Government has already paid for these bills
several times over through savings from cuts to family payments, and in 2014
the former Prime Minister Abbott stated that $2 billion of savings from cuts to
the Paid Parental Leave should be diverted into ECEC.
Recognising the Importance of ECEC
ECEC is integral to the health and wellbeing of Australian children, and
should not be delivered as dependant on cuts to vital family benefits. NXT note
that this issue was recognised in the Committee's Report, who determined that
none of the submitters provided an adequate alternative funding arrangement. The
NXT does not believe it should be the responsibility of witnesses to provide
alternative funding arrangements.
NXT recognises the benefits of ECEC and encourages the government to do
the same. For disadvantaged children, access to ECEC is integral their
development. NXT notes the statement made by Goodstart Early Learning Centre at
the Committee hearing, that:
...evidence from the AEDC, the Australian Early Development
Census, shows that, across all income groups, children who have access to
preschool before school are a third less likely to start school developmentally
vulnerable, and that holds for all income groups.
A number of submissions addressed this concern:
United Voice, quoting the Australian Institute of Health and
Welfare in their submission to the Committee noted that, the greater the degree
of vulnerability, the more urgent the need for ECEC.
United Voice also highlighted the benefits of high quality early
learning for disadvantaged children, noting that studies show it improves
cognitive, language and social development.
The Federation of Ethnic Communities' Councils of Australia, advocated
the benefits of ECEC to children of migrants, and its integral role in the
development of language skills, especially important for children from non-English
The National Welfare Rights Network, noted that there is 'a sound
evidence base to support the developmental benefits of early childhood
education, especially for children from disadvantaged backgrounds, and the
concern to ensure widespread access to these benefits should take precedence
over the Government's attempt to use child care subsidies as a policy tool to
promote workforce participation'.
The Mitchell Institute emphasised in their submission to the
Committee that 'the early years are a critical window for building the
essential foundations that enable all children to be confident and capable
learners, and develop social and emotional skills'.
The Mitchell Institute also stated that 'research demonstrates
that all children benefit from participation in quality early education
programs and that these benefits are amplified for children from disadvantaged
backgrounds, for whom extra hours and longer duration can make a significant,
positive and lasting impact on their schooling and beyond'.
The development of children through access to ECEC needs to be a
priority. Children should not be worse off under these proposals.
Ensuring the Diversity and Flexibility of ECEC
The NXT wants to ensure that the current diversity and flexibility in
the types of ECEC will continue under the reforms. Programs such as in-home
care and Budget Based Funding (BBF) provide an important service for many
families unable to access mainstream services, or for whom they may be
NXT wants to ensure that that the proposed package meets the needs of
the most vulnerable, and that vital services are being continued. During the
Committee hearings, the Australian Home Childcare Association gave some
examples of the types of families who use their services. They noted that
approximately fifty percent of all of their in-home care clients are families
with children or parents with disability or medical needs.
The Australian Home Childcare Association explained that:
In-home care naturally targets vulnerable children. In-home
care is currently an approved service with strict eligibility criteria capped
to approximately 5,600 equivalent full-time places. There are approximately 62
services nationally which provide care to more than 6,000 marginalised children
each week. As many in-home care placements are shorter term, with eligibility
being reviewed every six months, the service has the potential to impact a much
greater number of Australian children.
These are children like Jake. Jake has very high medical
needs. He requires oxygen and a BiPAP machine and 24-hour-a-day care. Jake
cannot attend child care. His mother suffers from depression. She has two other
children that also require daily care, including simple things like being taken
to and from school, which is a hard task with Jake's equipment. With in-home
care, Jake can be left at home with a trained educator. In-home care allows his
mother to meet the needs of her other children and also maintain her mental
health. In-home care also allows Jake to access early education he otherwise
may not be able to. The family does not meet the activity requirement of the
Nanny Pilot Program, and the NDIS does not provide support for his medical
Cara is a primary school aged child with autism. Her parents
are separated. Cara's therapists indicate that after-school care is not in the
interests of her mental health. Furthermore, Cara's school have expressed that
they are unable to care for Cara. Cara's mother was at risk of losing her job
multiple times due to having time off to care for Cara. She desperately waited
for in-home care for more than six months. Cara's mother expressed that the
Nanny Pilot Program is too expensive with just one child and she was concerned
about the training of her nanny versus the in-home educator.'
We have situations where there might be a lot of families
where there might be a mother or a father with cancer, and we might come in
through their treatment period, through the palliative stage, and we might
transition a family from the death of a parent through to the other side.
NXT are concerned this legislation does not mention in-home care. In-home
care provides a special and necessary service for families to whom mainstream
care is either unavailable or inappropriate. It provides a vital service for
families with complex needs, such as families in remote areas, those with
children with disabilities, or with parents who have multiple disabilities.
This program has also evolved to include children who are marginalised and
deemed at risk of harm, abuse or neglect, as explained by the Australian Home
The diversity and flexibility of Australian families need to be
reflected in the types of ECEC available. NXT is concerned that these reforms
will deny a range of high need, at risk and non-mainstream children access to
Budget Based Funding
Budget Based Funding (BBF) was introduced with the intention to allow
early ECEC to be conducted in areas in which the market would not otherwise
sustain it. Approximately 80 per cent of BBF funding goes to ECEC in Indigenous
communities. We note the concerns raised by SNAICC in their submission to the
Committee regarding the affect the cessation of the BBF will have on Indigenous
children and Indigenous communities. As noted by SNAICC in the committee hearings,
BBF supports approximately 19 000 children.
SNAICC stated that:
...engagement in early childhood education reduces risk of harm
to a child, and subsequent involvement with statutory child protection
authorities, as well as reductions in remedial services and criminal behaviour
in the longer term. Holistic community based Indigenous services are a central
preventative measure to strengthen families and prevent child abuse and neglect.
NXT are concerned about the impact the cessation of the BBF program
would have on indigenous communities, and the resulting effect on efforts to
close the gap. It is imperative that Indigenous children and children in rural
and remote communities have access to ECEC just as any other child in
NXT notes that the Australian Home Childcare Association stated in the
Committee hearing, that in regards to the continuation of BBF programs, they 'have
not had any clear communication that gives us a pathway or a direction or
certainty for those families'.
The Department of Education clarify as a matter of
urgency whether funding for in-home care will continue to be made available
under the Jobs for Families package.
Consulting with Stakeholders
NXT is concerned that the government did not conduct an appropriate
consultation process in the development of this package. Important stakeholders
such as SNAICC were not invited to be a part of the initial reference group
during the consultation period.
When questioned about the number of Indigenous organisations involved in the
consultation process the Department was unable to name a single organisation, and
the response from the Department on this issue appears to be quite
Senator KAKOSCHKE-MOORE: I understand that it is an
invitation-only process to consult with the ministerial advisory council. Were
there any Indigenous organisations that were invited to be part of the
ministerial advisory council?
Ms Wilson: There actually is an Indigenous member of
the council, but that person just does not wear a hat in terms of SNAICC. Is it
Judith Tempest? She is from New South Wales, so there is an Indigenous member
in the that (sic) group. Judith McKay-Tempest.
NXT believe in the benefits of a broad consultation process with
appropriate stakeholders, by whom and for whom these services are provided.
During the committee hearings, SNAICC noted that it appeared the Government
presented a 'very clear package...with very little room for negotiation'.
NXT are concerned that the programs may be unworkable, and that a number of
families will be left without appropriate services due to this failure.
United Voice also raised concerns in their submission to the inquiry,
that the Stakeholder Reference Group who were consulted during the creation of
these bills met only three times and were 'not so much consultation sessions as
At the Committee hearings, the Government conceded by that they have not
communicated 'as often or as much as they should have with providers and with
families'.  This
failure should be addressed, and relevant stakeholders should have be consulted
in the early stages to ensure that what is proposed meets the needs of the most
vulnerable and marginalised. At the Committee hearing, SNAICC suggested that 'perhaps
consulting earlier and with an open mind to actually listening and engaging to
develop a collective package that best meets the needs of those very diverse
children would be best.'
The Department of Education review their consultation
procedures to ensure that all appropriate stakeholder groups are comprehensively
consulted when reform packages are being developed.
NXT are concerned about the lack of transparency surrounding the tender
process currently being undertaken by the government in regards to funding of ECEC.
As noted by Ms Sydenham, Deputy CEO of SNAICC, SNAICC are concerned about the
ability of this proposed package to meet the needs of the most vulnerable, and
that without the information collated during the tender process, Senators may
not have access to all the appropriate information. In their submission, SNAICC
stated that tenders for a number of ECEC services are currently out, and that
the tender information would be highly useful to determine whether the package
will be able to deliver the services required.
During the Committee hearing Ms Sydenham stated that:
All evidence available at the moment suggests that there will
be a significant decrease in access for Aboriginal and Torres Strait Islander
children, and other children, to early learning under the budget-based funding
program. The government at the moment is undertaking probably the largest, most
comprehensive assessment of the capacity of budget-based funding services to
transition at all to the new package, and a transition support process. We
believe this is really critical information that should be on the public record
and that should be able to assist and inform senators in their decision on
whether to approve this bill or what amendments are required to make sure that
it does improve access for all vulnerable children. So we would seek to have
the government share the reports—each service will have a report of its own; I
believe they do not have the final reports as yet—or to have the government
provide a review or a systemic analysis of what is coming out of that tender
process or that research process.
NXT believe the government needs to be transparent in the way these
tenders are being offered. This information will helpfully inform any future
decisions about client need and service delivery.
The Department of Education and Training make public
information in relation to the tenders.
NXT is concerned about changes to the activity test. The government is
proposing to determine the amount of hours of subsidised ECEC through an
activity test, whereby families earning up to $65 710 where one parent works
less than 17 hours, but more than 8 hours a fortnight, are eligible for 18
hours of subsidised ECEC a week. For parents who don't satisfy the activity test
they will be able to access only 12 hours a week. Previously, if parents worked
less than 15 hours a week they were eligible for up to 24 hours of subsidised ECEC.
NXT believes that all children should have access to ECEC regardless of
the activities undertaken by their parents. Some concerns were raised that this
could mean that parents would put their children in ECEC so they could go to
the pub. Mr Manderson of Anglicare Australia addressed this concern at the
Mr Manderson: ...I do not accept the poetic notion of
linking it with people down at the pub drinking. I think that is facile and I
think it is unhelpful.
Senator PATERSON: I do not think it is clear then what
your view is about whether that is okay or not.
Mr Manderson: I am not saying it is okay; I am saying
it should not cost those kids their child care.
Senator PATERSON: Should the design of the system
allow for it?
Mr Manderson: The design of the system should give
those children the educational opportunities they need.
As United Voice highlighted during the hearing, and reflected in their
submissions, access to ECEC is best understood as a right held by the child
regardless of their parents' capacity to work or inability to pay. The noted
that as a minimum, all children should have access to a minimum of 24 hours, or
two days, of subsidised ECEC per week.
Senator KAKOSCHKE-MOORE: There has been some
discussion today about changing the minimum hours, and a proposition that we
could shift from 12 hours subsidised care per week to 15. Does United Voice
have a view on that?
Ms Gibbons: I note that there were a number of
submissions, and particularly the submissions from ACA, ECA and the Early
Learning and Care Council, that suggested that. The current arrangement is that
people are able to access 24 hours of subsidised care a week. We would prefer
to maintain that because that provides two days of early learning—two full days
of early learning—for children. If children are at the heart of this policy
then that is an arrangement that would work for them.
It also overcomes the issues that I talked about with the
casual worker who has all of these different arrangements and has to try to
work out how to meet the activity test. If they have the guaranteed two days,
she knows she is available to put her name on the list to pick up casual work
for two days a week. I recognise that some significant stakeholders have put
forward that compromise position, but United Voice's position is still that it
needs to be maintained where it currently is.
This position was mirrored in the Committee hearing by Anglicare
Australia, who stated that at an absolute minimum, children should have access
to at least 24 hours of ECEC.
Anglicare Australia also highlighted that childcare should be viewed as early
childhood education, and that child's ability to access education should not be
dependent upon their parents' ability to satisfy an activity test.
A compromise of 15 hours a week for parents who don't satisfy the activity test
has been put forward by Goodstart Early Learning and the Australian Childcare
Alliance. The NXT is concerned that 15 hours a week does not amount to
two full days of care, and is ill-fitting with the business practices of many
NXT are concerned about the workability of a change to 12 hours of care,
for service providers. When questioned about the suitability of 12 hours of
care, Goodstart, as the country's largest childcare provider, stated that they
could ensure that they would be able to offer services over two days to meet
the 12 hour entitlement. However, NXT note that United Voice held concerns
about the impact of this change to either 12 or 15 hours will have on smaller
Senator KAKOSCHKE-MOORE: If the changes were to go
ahead and the 15 hours of subsidised care is rolled out, what impact do you
think that will have on your members? Will it change their working patterns or
hours of work?
Ms Gibbons: We do have a real concern about what that
looks like. There has been no modelling about this that has been released by
the department. The concern is that most care is paid for by the day. What that
means is that when people are planning their rosters for people who work in the
sector, they can structure those rosters so that they have as many people as
possible during the peak times, they have enough people in the quieter times,
they can stay open for as long as possible and they can provide as many
full-time or full-day jobs as possible. As soon as you change the structure to
15 hours a week, what they think is proposed is two days, but that would
actually change the way that the parents are currently charged. They are
currently charged for a full day, which is around 10 to 11 hours. If they are
only charged for 7½ hours, what does that mean for the people who work in the
sector? Does that mean they have much shorter days? I think there is a real
question mark. It is really hard to know what the impact will be because there
has been no modelling in relation to this. There has been no unpacking of how
the workforce is going to respond to what is in the package. My real concern is
that you will see hours shrinking. You will see increasing casualisation. You
will see less people working full eight-hour days and a lot more people working
six-hour days. This is an industry that is already incredibly low paid and
already has retention issues and turnover issues. The more you make the work
precarious, the more you are exaggerating that problem and making that problem
The current business structure of most childcare providers revolves
around a 12 hour day model. NXT are concerned about the impact on small
business if a change to the minimum subsidised hours is introduced. As
highlighted by Goodstart, if a 12 hour subsidy is introduced, changes may have
to be made to billing types and centre practices.
Mr Cherry: 'If we move to shorter sessions, families
might love to pay for eight hours rather than 12, but they all want the same
eight hours, which are between 8 am and 4 pm. Our current cost structure
reflects our children and when they are actually in our services. The NQF
allows you to staff your centre dependent on your children. The cost savings of
shifting from billing for a day to billing by the hour would be very minimal,
which means the hourly rate will go up quite significantly because you would be
billing your costs over eight hours rather than 12 or 11. Families might love
to be billed for only eight hours a day, but they may not be saving any money.'
The NXT is concerned about the implication of hourly billing on
providers, and the lack of consultation that was involved in this
The Department further consults with stakeholders regarding
the suitability of the 15 hours proposal and the impact on business models of
The Department conduct modelling on the impact 15 hours
of subsidised ECEC would have on childcare workers' workforce participation.
Senator Skye Kakoschke-Moore
Nick Xenophon Team
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