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Push for reform as parents pay more for early childhood education and care

Australia’s peak early childhood advocacy organisation has called for a complete re-think of government subsidies as parents continue to pay more for early childhood education and care services, despite a significant increase in government expenditure.

According to Early Childhood Australia (ECA), the Federal Government has continued a freeze on the maximum level of child care rebate for the next three years, and has also applied a freeze on the income threshold for the child care benefit.

ECA shows that by the end of the freeze (2017–18), families will be paying thousands more for services, despite the Federal Government committing more than $7 billion per year on subsidies.

“The early childhood sector is growing rapidly—Treasury figures suggest that we could have 1.5 million children accessing approved care in the next financial year, with a 30 per cent increase in government expenditure,” said ECA CEO Samantha Page.

“Despite this increase, the freeze on the subsidy thresholds will have a dramatic effect on the cost of care over the next few years. We need a total re-think as the current system is not sustainable.”

ECA modelling shows that the proposed freeze to the Child Care Benefit and Child Care Rebate will leave a family with a household income of $135 000 per year up to $6000 worse off, per child, by 2017.

Page said that without significant reform of the child care system, government subsidies would continue to lose real value and families could withdraw children from care.

“Everyone benefits from early learning, because of increased productivity from children’s development and women’s workforce participation.

“We would be concerned that families might have to reduce the number of days they can access care for their children, which will have a significant impact on our economy and the future educational outcomes of these children.

“The program is continuing to boom, and the government’s commitment to increasing expenditure in this fiscal environment shows how important this investment is to our nation.

“We are looking forward to the Productivity Commission coming up with recommendations to allow families to continue accessing quality early learning for their children.”

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