The Australian Council of Social Service today expressed its support for the simplification of the child care system proposed in the Productivity Commission’s report on Childcare and Early Childhood Learning, but stressed that greater investment was needed in the system and that low income households, including those not in paid work, must be a priority in future reform.

Australia spends less on early childhood education and care than most OECD countries: 0.6% of GDP compared to the OECD average of 0.7%. In designing a reform package, the Government must deliver increased funding for early childhood education. This investment will pay social and economic dividends in the future.

In responding to the Commission’s final report released today, ACOSS said it provides a solid basis to reconfigure the current complex and inequitable system through a streamlined means tested subsidy that ensures that most assistance goes to families on the lowest incomes.

ACOSS CEO Dr Cassandra Goldie said:
“We strongly support the main recommendation of the report to combine existing child care payments into a single child-based subsidy and the proposal to increase assistance to families who need it the most. This broadly reflects our long-standing policy position.”

“However, while we believe that the Productivity Commission has got some of the fundamental design elements right, we are concerned that a number of its specifications will leave some low income and disadvantaged families worse off. In responding to the report, the Government must ensure that this is not the case.”

“We are disappointed that the Final Report recommends a maximum subsidy of 85% of the costs of care, down from 90% in the draft report. This will impact on the ability of low income families to access education and care.”

“We also strongly oppose the Commission’s proposal to introduce a requirement that parents must be engaged in 24 hours per week of work, study or training to receive assistance with the costs of care. It’s clear that education in the early years sets children up for life. This is particularly vital for children in low income and disadvantaged households.”

“While exemptions are suggested for parents relying on income support, children whose parents are not in paid work would only be eligible for 10 hours of care a week, down from 24 hours under the current system. This is not enough to provide children with a solid educational foundation in their early years.”

“The loss of Jobs Education and Training Child Care Fee Assistance is also likely to mean that very low income families are worse off, including single parent families.”

“We are concerned by the proposal to make Family Tax Benefit Part A conditional upon children’s attendance at preschool. We do not believe that it is fair to impose a requirement on families which involves additional costs to be eligible for assistance with the costs of children. Pre-school is not free in some states and territories.”

“We are also concerned by proposed reforms to transition Budget Based Funded services from block funding to mainstream funding, noting they currently serve many disadvantaged Aboriginal and Torres Strait Islander communities. The priority must be to support and strengthen community based Aboriginal and Torres Strait Islander early years services, including through secure and sustainable funding arrangements.”

“Proposals to extend child care subsidies to nannies should be assessed with a view to ensuring quality educational outcomes for children and delivering benefits to low and moderate income households in need of flexible care arrangements.”

“We urge the Federal government to work with all parties and the community in developing a families package that delivers high quality early childhood education which is affordable and accessible. Any reform package should seek to achieve the twin goals of improved educational outcomes for children and improved participation outcomes for parents.

“We look forward to working with the Government and all key stakeholders to design a new system which meets both of these goals.”

Media Contact: Fernando de Freitas 0419 626 155