From July 12, the nation will return to the existing Child Care Subsidy, an unmanageable high-fee system the penalises women, children and childcare workers. But there is a solution. 

 

 

On Monday, the federal government announced it will be canning free childcare and returning to the Child Care Subsidy system on July 12. This includes kicking all early childhood educators off JobKeeper payments and forcing parents (a sizeable portion of whom have taken a big hit to their incomes in the wake of COVID-19) back to paying extraordinarily high fees.

This is a system that wasn’t working well before the pandemic. It is a system so complicated and clumsy that it was once described by former-Minister Kate Ellis as an egg that needed to be unscrambled. It is a system that keeps childcare inaccessible and unaffordable for families and yet, fails to pay educators adequately.

Returning to the CCS system is anti-women, it’s anti-children, and it’s anti-educator. And it’s not even good policy economically.

Even before the pandemic struck, families were struggling to afford Early Education and Care services for their children. Australia has some of the highest fees for childcare in the OECD, accounting for about 27% of household income. For many families, ECEC eats up a bigger portion of their household budget that their mortgage repayments, and is more expensive than private school fees, except, unlike private schooling, there is no choice. There is no public option. You pay the fees or your child misses out on early learning and the secondary income earner (usually a woman) has to sacrifice her career.

 

Returning to the CCS system is anti-women, it’s anti-children, and it’s anti-educator. And it’s not even good policy economically.

 

Families already routinely have to moderate how much Mum can work based on how much childcare they can afford. Research from KPMG in 2018 found that many women get either no financial benefit from working more than three days per week, or actually go backwards. As in, it costs more to put your kids in care than you can earn. 

With about half of the families who use ECEC taking a financial hit from the pandemic, more families will be having to decide whether to prioritise their career and their child’s early education, or keep paying the mortgage and electricity bills.

A recent survey of 2280 families by The Parenthood found that a third of Australian families will need to reduce their working days or remove their kids from ECEC altogether if the system returns to full fees. This would spell disaster not only for the parents forced to sacrifice their careers and their children forgoing access to education, but also for the services forced to close, businesses losing employees, and the broader economy.

This is a policy that actively pushes women further out of the workforce, further damning our career prospects and our ability to fund our own retirement at a time when women’s employment has already been hit hardest: between mid-March and mid-April female employment dropped 8.1% while male employment dropped 6.2%.

Australia has some of the best-educated women in the OECD, ranking 4th out of 46 countries for bachelor’s degree or equivalent attainment, in fact, our women are more educated than our men, and yet women’s workplace participation lags almost 10 percentage points behind, and are far more likely to take career breaks to care for young children and return to the workforce part-time. It beggars belief that a government who has invested so much in the education of women would actively work to stop them using that education in paid work.

This high-fee, hard to access system also fails to acknowledge that quality ECEC should be the fundamental right of every child in a democracy. The benefits to a child’s education can be seen throughout their schooling, boosting scores in reading, science, and mathematics through to high school. Anything that makes it harder for children to access this transformative early education is just bad policy.

 

The current situation could have been a real opportunity for the government to unscramble the rotten egg of the ECEC system. Instead, they have decided to “snap back” to a system that has the potential to add to the economic catastrophe we seem to already be facing.

 

But it’s also bad economic policy. According to the Grattan Institute, just a 6% increase in the workplace participation of Australian women would boost GDP by about $25 billion a year. KPMG modelling shows that halving the gap between male and female workplace participation would increase annual GDP by $60 billion over the next 20 years and lift our cumulative living standards by $140 billion in that time. Recent research has also found that for every $1 we invest in ECEC, we get $2 into the economy

So, far from being a drain on the public purse, fully funding ECEC actually pays for itself. And then some. It would even give us enough to pay early childhood educators properly in recognition of the vital role they play in nurturing and educating our kids. 

It is revenue positive and socially positive. It puts more money into the economy, more money in the pockets of families, encourages women to confidently build their careers and superannuation balances, and enhances the education of our children. There are simply no drawbacks.

The current situation could have been a real opportunity for the government to unscramble the rotten egg of the ECEC system. Instead, they have decided to “snap back” to a system that has the potential to add to the economic catastrophe we seem to already be facing. Not only could we have enhanced our children’s educational opportunities and reduced the stress on families, at a time like this, we could really use the boost to the economy.

 

 

 

 

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