The Productivity Commission has released its draft inquiry report on Childcare and Early Childhood Learning with the recommendations seeking to make child care more affordable, flexible and accessible for parents and more financially sustainable for tax payers.
Presiding Commission Dr Wendy Craik said early childhood and care play a vital role in child development and workforce participation.
"However, our current system does not meet the needs of all families and the costs of supporting the current childcare system are increasing at an unsustainable rate for taxpayers," she said.
In response to this the Productivity Commission has recommended replacing the current child care subsidies with a single subsidy that would be paid directly to the parent's choice of provider and be passed on as a discount in fees.
Under the current system the Child Care Rebate covers 50 per cent of child care costs to the tune of $7500 per child per year with the Child Care Benefit offering additional support to lower income families.
The new subsidy would offer more support to lower income families so that those earning $60,000 or less would have up to 90 per cent of the costs of care subsidised with those earning $300,000 or more receiving a 30 per cent subsidy.
This support would be available for for: all centre-based ECEC services including long day care, occasional care and OSHC and all home-based care (including family day care and approved nannies) which satisfy the appropriate National Quality Standards.
Other key recommendations in the draft report include:
- Increased funding and subsidies for children with disabilities and additional needs.
- Making nannies eligible for child care subsidies, subject to them holding qualifications and complying with the National Quality Standards. The suggestion was also made that the visa restrictions on au pairs be lifted in regional and remote areas.
- Removing restrictions on the number of child care places for occasional care and the hours that centres have to be open in order to receive Government subsidies.
- Making school principals responsible for ensuring schools offer before and after school care, including care for preschoolers.
- A continuation of Government support for access to preschool for all children in the year before starting school.
Assistant Minister for Education Sussan Ley has welcomed the draft report and says Australian families should be able to plan child care around their work life not their work life around child care child care services, however she emphasized the fact that this is a draft report and that there is more work to be done.
"We want to see a system that works just as well for families in the major cities as it does in regional, rural and remote Australia" she said.
The Commission has estimated that the proposed changes could boost workforce participation by about 2.7 per cent by making it easier for some 46,700 women to return to the workforce. The Commission's preferred scenario also has the potential to boost GDP by $5.5 billion.
Importantly the Productivity Commission supports the National Quality Framework and suggests it should be expanded to other subsidised services but that it needs to be more flexible and targeted for the types of services provided.
The Childcare and Early Childhood Learning report is a draft and the Productivity Commission is inviting further comment and feedback on its initial recommendations and will hold public hearings in various locations during August.
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