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Childcare and early childhood learning draft report released

The Productivity Commission has released its draft inquiry report on Childcare and Early Childhood Learning.

“Our recommendations seek to make childcare more affordable, flexible and accessible. Furthermore they will provide a framework for a more financially sustainable childcare system for taxpayers into the future,” Presiding Commissioner Dr Wendy Craik said.

The Childcare and Early Childhood Learning report is a draft report and the Productivity Commission will continue to seek feedback before this report is finalised at the end of October this year.

“It was clear from our research and the many comments and submissions that we received that childcare and early childhood learning play a vital role in both 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,” Craik said.

The report proposes three key areas of funding for Childcare and Early Childhood Learning (Childcare): Mainstream childcare services; Children with disabilities and additional needs; and Preschool.

“Some of our key recommendations include replacing the current multiple childcare subsidies with a single subsidy that would be paid directly to the parents’ choice of provider, and be means and activity tested. The subsidy would be based on a set reasonable cost of care,” Craik said.

The recommendations for means testing a single childcare rebate would still see all eligible families receiving a minimum of 30 per cent of their reasonable childcare fees reimbursed by taxpayers. Further options for assistance however remain under consideration.

“Means-testing the childcare rebate will mean that more families on very low incomes will pay less for their childcare than they do now. We expect low income families would see around 90% of their reasonable childcare fees paid by Government,” Craik said.

Other key recommendations from the draft childcare report include:

  • Nannies being eligible for childcare subsidies subject to appropriate qualifications (au pairs would not be eligible).
  • 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.
  • School principals being 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.
  • Increasing funding and subsidies for children with disabilities and additional needs.

“The Productivity Commission supports retaining the National Quality Framework and extending it to other subsidised services but it needs to be more flexible and targeted for the types of services provided,” Craik said.

The Productivity Commission’s preliminary economic modelling found that implementation of their measures would most likely result in up to 47 000 more full-time people entering the workforce. The economy-wide impacts of this are likely to be relatively small, with a GDP impact of, at most, an additional $5.5 billion, but the social significance of this should not be underestimated.

The Commission is inviting submissions on the draft report, its recommendations and information requests by 5 September 2014. The Commission will hold public hearings in various locations during August.


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