A draft report on childcare services has been released today. I believe any parent with a child in care should read it.
A key recommendation is to replace the current multiple childcare subsidies with just one which would be paid directly to the parents’ choice of provider, and be means and activity tested.
The recommendations for means testing a single childcare rebate would still see all eligible families receiving a minimum of 30% of their reasonable childcare fees reimbursed by taxpayers. More details about this at the bottom of this post.
Other key recommendations:
> 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’s preliminary economic modelling found the measures would likely result in up to 47,000 more full-time people entering the work force, a rise in labour supply of 0.4%.
The commission says 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 should not be underestimated.
The cost to government of the preferred settings is estimated at $8 billion per year. This is slightly above the forward budget estimates, but the commission has also included analysis for assistance arrangements that are likely to be within the Government’s funding envelope.
Details about the proposed Early Care and Learning Subsidy (ECLS)
Under the Commission’s proposed child-based assistance scheme (ECLS), the rate of assistance received by families for a child attending a formal ECEC service would be determined by the ‘deemed’ cost of providing a reasonable standard of ECEC (including a profit margin), given the type of service provided (care, education or a combination thereof) and the age of the child. The ECLS would:
• be available for all centre-based ECEC services (including long day care, occasional care and OSHC) and all home-based care (including family day care and approved nannies) which satisfy the appropriate National Quality Standards
• apply to the hours of care charged for, up to 100 hours of service per fortnight
• vary with family income, including tax-free income and all other welfare payments received, such that those with a family income of $60 000 or less would have 90 per cent of the cost of ECEC subsidised by the Government, reducing gradually to 30 per cent for those with a family income of $300 000 or more
be available for children whose parents undertake at least 24 hours per fortnight of actively looking for work, undertaking work, study or training; or are in receipt of a disability support pension and unable to work; or in receipt of a carers payment and unable to work; or for children who have, as their primary carer, someone other than their parent(s)
• have the deemed cost legislatively indexed to the annual change in the relevant wage for ECEC services
• be paid directly to providers, and be passed on transparently as a discount in the fees charged.
View the draft report online: http://www.pc.gov.au/projects/inquiry/childcare/draft