Major childcare reforms proposed in landmark report

FAMILIES on lower incomes should receive free, subsidised childcare, a highly anticipated inquiry into the nation’s early children education and care (ECEC) services has recommended.

Tasked by the Federal Government to make recommendations that will support affordable, accessible and high-quality ECEC, the Productivity Commission handed down its final report on Wednesday last week.

The report presents the Government a roadmap to achieve a universal childcare system in which all Australian families with children under the ages of five have access to three days – or at least 30 hours – of childcare a week.

It contains 56 recommendations to help remove some of the access barriers facing Australian families, chief among them being increasing the rate of the childcare subsidy to 100 per cent for families on incomes below $80,000, and for families with multiple children under five earning less than $140,000.

The report also recommends the childcare subsidy activity test be abolished, as access to ECEC should not be restricted to families who are working or studying at least eight hours a fortnight.

The commission estimates that these reforms would increase demand for ECEC by 10 per cent, particularly from low- and middle-income families who are not currently using such services, and would help to facilitate an increase in workforce participation.

Associate Commissioner Deborah Brennan said a child’s entitlement to at least three days of ECEC a week should not depend on how much their parents work.

“Children experiencing vulnerability and disadvantage benefit the most from quality early childhood education and care, but they are currently the least likely to attend,” she said.

While the recommended reforms would increase the cost of the childcare subsidy by 37 per cent annually to about $17.4 billion, the commission maintains it is the most cost-effective option to support higher ECEC attendance in children who would benefit most from the service.

Implementing new measures to support the ECEC workforce, investing in ECEC services in communities experiencing disadvantage, and expanding access to outside school hours care, are also addressed in the report.

Federal Minister for Education Jason Clare said the report made it clear that more needs to be done to make sure children from disadvantaged families, who would benefit the most from high quality early education, are not missing out.

“The report is a significant input into our work to chart the course to a universal early childhood education and care system,” he said.

Member for Corangamite Libby Coker said the Albanese Government will work through and consider the findings of the Productivity Commission’s report as it continues to roll out its “ambitious agenda for families”.

“Early childhood education and care unlocks opportunities, particularly for women and children, so it makes absolute sense for government to invest in accessible, inclusive and affordable care for Australian families,” she said.

“All children should be able to access high-quality early childhood education and care no matter where they live or their background.”