In May 2015 the Federal Government announced proposed changes to the nation’s childcare system. If these changes are made law, it will be good news for families where both parents work, but there’s a negative impact for some children from lower income families where one parent doesn’t work.
Goodstart had one of the leading economic modelling companies consider the proposed changes and they’ve found the changes will be good news for the economy, getting thousands of people back to work over the next few years. You can read the PricewaterhouseCoopers report here or have a look at our media release summarising the findings here.
Goodstart has made a detailed submission to the Senate Inquiry which considered the proposed changes you can read our media release here or the full submission by clicking here.
Here’s a short summary of the bill:
What could be better?
Low and middle income families – where both parents work at least 17 hours per fortnight– can expect to be better off with increased support for childcare costs from July 1, 2017.
The legislation will introduce a simpler single Childcare Subsidy, replacing the current benefit and rebate.
It will also introduce a subsidy – paid to child care centres - based on the fees families actually pay, up to a reasonable market-based fee-cap.
There is a $327 million safety net for children with identified additional needs or those living in rural, remote areas of high need.
Why does access to early learning matter?
Some children will have their access to early learning slashed.
Currently children from low income families where one parent is not working or studying can access up to 24 hours of early learning a week. Under the proposed changes this will be cut in half to just 12 hours of early learning a week (unless they meet the tougher new ‘activity test’).
For a low income family with a child in a typical childcare centre for two days, this change could cost them up to $16 a week, which a family earning less than $52,000 a year simply cannot afford.
Families in which both parents are working, but one parent is in casual or irregular work for less than 17 hours per fortnight are likely to be worse off, with less access to subsidised care than they get now.
The tougher new activity test needs to recognise all volunteering activities.
Centrelink reporting rules must not be too onerous for families whose work, study or volunteering arrangements change often and should help families avoid getting into debt.
Research demonstrates that all children, but especially children in need, benefit from at least 15 hours (about two days) of early learning per week to ensure they are ready for school and ready to learn.
to learn more about the benefits of high quality early learning.
Instead of slashing access to kids in need, the Government should bring Australia in line with nations like the UK and NZ who are offering up to 20 hours per week of early learning for all children over three while also ensuring younger children in need have access to early learning.