Reaching for Better Child Care

Child care is a critical component of our modern economy. As productivity increasingly becomes the driver of economic growth in Australia, it is necessary to ensure that all adults that are willing to work are given an opportunity to do so.

As such, the Federal Government needs a consistent and responsive child care policy to address the issues parents face when re-entering employment after an initial period of care of their newborn child.

Affordable child care is of increasing importance to Australian families as they struggle to meet increasing cost of living pressures, and contemplate the need for a second income to meet these financial pressures.

Child care is an important service to our community that enables greater workforce participation and support to parents.

As at the September quarter, 2011, 14,523 child care services were operating in Australia caring for 992,520 children. This means that around one in every four children below twelve years of age attends child care.

In recent years, the Labor government has reduced the Child Care Rebate from $8,179 to $7,500 and since Julia Gillard became Prime Minister, the cost of child care has risen by more than twenty per cent. The promised end of the ‘double drop-off’ never eventuated as Labor broke its promise to build 260 new child care centres.

The Coalition is a strong supporter of improved standards and conditions for early childhood educators. It is important that we as a society ensure quality care is provided to all Australian children, while ensuring that child care remains affordable.

Creating Opportunities for Parents

When considering a policy approach in relation to child care, the first step is to consider the desired outcomes of the policy. In relation to the Coalition’s child care policy, the primary objective is to create choice for parents. This includes providing parents with the ability to re-enter the workforce or to continuing caring for their children.

In order to achieve such choice in the care of children, it is necessary to provide suitable and affordable child care. This is to ensure that parents are afforded the choice of going back to work without overbearing child care fees that consume much of the increase in income.

While affordable child care is one facet of a wide-ranging policy, there is also a need to support those parents that do choose to remain at home and care for their children themselves.

This is where a comprehensive paid parental leave scheme provides essential support to Australian families. Starting a family is an expensive pursuit and a comprehensive paid parental leave scheme would assist in alleviating some of the financial stress young families face.

Australians deserve a wide-ranging child care policy that not only ensures affordable child care services but also offers choice to Australian families, so that they are not forced into any one option. This means a parent can choose to stay at home if they wish to but are also not prevented from doing so, because the care is too expensive—or a parent can choose to go back to work, not just because they cannot afford to stay at home.

This is as much about empowering parents as it is supporting them.

We need to make child care more accessible and more affordable for Australian parents. Too many families are excluded from child care because of where they live, what job they take, and how much they earn. Each time this happens, our economy loses the skills and capabilities of a working adult who can make a contribution to building a stronger economy.

This is as pertinent as ever. Recent Australian Bureau of Statistics data indicates more than 110,000 Australian parents say they cannot pursue the employment opportunities they would like to because they cannot find suitable or affordable child care.

The increased focus on lifting productivity means that the use of Australia’s labour resources needs greater efficacy. As such, more workers in the workforce means greater productivity. There is a direct relationship between affordable childcare and the amount of hours parents—especially women—can work.

Additionally, the child care system in Australia is a model that predominantly supports a 9-5 economy. Yet Australia’s modern economy is increasingly a 24-7 one. Child care options need to support these changes in order to increase workforce participation and boost economic development.

Australian families need a system that is not only affordable, but ensures people can work flexible hours whilst knowing that their children are receiving high quality child care.

According to the Australian Bureau of Statistics, since the 2010 election child care costs have increased by more than twenty per cent.

Child Care

Around one million Australian children are in child care, however many more are excluded due to cost and limited choice. In particular, parents who work in regional and remote areas and those who undertake shift work find it difficult to find care which suits their circumstances.

Particularly for women, there is a significant contribution access to affordable, high quality child care can make to increased participation while also optimising children’s learning and development.

While there are positive elements of the National Quality Framework, its rollout is symptomatic of a government that too often rushes and mishandles the implementation of its policies. What is needed is for the government to work with the states and territories to find practical ways to improve the implementation of the National Quality Framework.

It is critical we have a system that works in the best interests of all concerned. It must provide a safe, nurturing environment for children but also meets the needs of their families.

Whilst State Governments have responsibility for the regulation and oversight of child care, the Commonwealth is the major player from a funding point of view.

Commonwealth funding was first provided to help finance child care in 1972. Over time the funding model has progressed considerably, and now there is the option to have a Child Care Rebate of up to fifty per cent of the cost of child care (to a cap of $7,500 per child per annum) paid either directly to a child care centre, or to parents.

There is also a means tested Child Care Benefit for a large number of families. Yet many families say they find child care to be their second largest expense after their rent or mortgage payments.

Any comprehensive policy considering the current and future need for child care in Australia, needs to include consideration of the following elements:

  • the hours parents work or study, or wish to do so;
  • the particular needs of rural, regional and remote parents, as well as shift workers;
  • accessibility of affordable care;
  • types of child care available including but not limited to: long day care, family day care, in home care including nannies and au pairs, mobile care, occasional care, and outside school hours care;
  • usual hours of operation of each type of care;
  • the out of pocket cost of child care to families;
  • rebates and subsidies available for each type of care;
  • the capacity of the existing child care system to ensure children are transitioning from child care to school with a satisfactory level of school preparedness; and
  • the needs of vulnerable or at risk children.

In line with this, there needs to be consideration of whether there are any specific models of care that should be considered for trial or implementation in Australia, with reference to international models, such as the home based care model in New Zealand and models that specifically target vulnerable or at risk children.

Supporting Australian Families

The Coalition’s proposed Productivity Commission Terms of Reference seek to identify the means by which child care in Australia can further contribute to the needs of families and the nation. It needs to consider the choices available to families, within the existing funding parameters, include subsidies, rebates and tax deductions and how to enhance their efficacy for Australian families.

The Coalition wants Australian families to have more choices when it comes to the decisions they make about the care of their children. Parents need more choices as they move in and out of different types of child care due to their changing personal, economic and working circumstances. We want a child care system that is more capable of responding to the dynamic and individual needs of parents.

The Coalition in government will make child care more accessible and more affordable for Australian parents. We cannot afford to have families excluded from child care as our economy loses the skills and capabilities of a working adult who can make a contribution to building a stronger economy.

Even with the many reforms of the past decade, many Australian families are still struggling to access affordable child care. Child care prices have risen by more than twenty per cent since Julia Gillard became Prime Minister in the middle of 2010. This has a detrimental impact on parents returning to work.

This is why the Federal Government need options, within the existing funding parameters, for enhancing the choices available to Australian families in how they receive child care support, so that this can occur in the manner most suitable to their individual family circumstances.

The Coalition will consider the various mechanisms including subsidies, rebates, and tax deductions to improve the accessibility, flexibility, and affordability of child care for families facing diverse individual circumstances.

In government the Coalition:

  • restructured the tax and benefits system in favour of families;
  • introduced the Baby Bonus and the First Home Owners’ Grant;
  • provided greater resources and choice in health and education;
  • introduced Family Tax Benefit;
  • reformed family law and the Child Support Scheme;
  • provided a 21 per cent real increase in the pension and linked the Aged Pension to growing incomes (25 per cent of MTAWE) instead of CPI (1997), allowing pensioners to share directly in the wages increases flowing from our strong economy;
  • eased the taper rates, enabling around 300,000 older Australians to receive a pension for the first time or get an increase in their pension rate;
  • boosted subsidies for Aged Care places and delivered significant real term funding increases for residential care and Community Aged Care Packages;
  • introduced more generous eligibility arrangements to give more older Australians access to the Commonwealth Seniors Card;
  • provided bonus payments to recipients of the Carer Payment and Carer Allowance; and
  • introduced the thirty per cent rebate for private health insurance.

As demonstrated by past Coalition governments, we are committed to helping Australians get ahead to build a better life for themselves and their families through reducing cost of living pressures whilst ensuring parents can access child care, education and health services.

The Coalition approach to child care reform will help ensure that child care is more accessible, affordable, and flexible for Australian parents. For many families, the one-size-fits-all approach to child care is not working.

This is why the Coalition has released the terms of reference for its proposed Productivity Commission inquiry into child care that will identify how we can improve the current system to make it more responsive to the needs of parents.

While the Coalition has welcomed the positive elements of the National Quality Framework, we are committed to working with the states and territories to find practical ways to improve its implementation.

Under our policy, the Productivity Commission would consider all the current impediments to a family friendly child care system and look at how parents can better access existing services including long day care, occasional care, family day care and in-home care. We would also look at the economic ramifications of inadequate child care places and whether current support for parents is sufficient and properly targeted.

The Productivity Commission Review of Child Care is part of the Coalition’s plan for a stronger economy. A more flexible and responsive child care system will lift workforce participation and is part of the Coalition’s plan to deliver a strong and prosperous economy and a safe and secure Australia


The Productivity Commission Review of Child Care is part of the Coalition’s plan for a stronger economy. A more flexible and responsive child care system will lift workforce participation and is part of the Coalition’s plan to deliver a strong and prosperous economy and a safe and secure Australia

The Coalition will engage with the states and consider developments with the implementation of the National Quality Framework in states and territories, especially whether it has achieved the intended quality regime and what other ramifications it has had, with specific consideration given to compliance costs.

Ultimately, there is a need for assessment of the regulatory framework for child care providers and the impact of the implementation of the National Quality Framework. Any policy approach needs to be comprehensive and responsive to the needs of Australian families, and the Coalition will deliver better outcomes in child care for all Australian families.

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