Childcare experts and parents have been left scratching their heads at the Productivity Commission’s long-awaited blueprint for childcare reform, arguing its proposed new funding system is too difficult to understand and that many families would be worse off under the plan.
One childcare sector representative told Fairfax Media the Abbott government would be “crazy” to implement the commission’s report, which recommends that childcare funding is based on an hourly rate, benchmarked against the median price of various types of childcare. They argued this would see such a significant proportion of parents lose out.
The report, which was released on Friday, also drew a lukewarm response from the peak childhood body, Early Childhood Australia.
Chief executive Samantha Page said that the commission had done a good job of highlighting the problems of childhood access and affordability, but did not offer the answers.
“I don’t think it gets us there with the solutions,” Ms Page said.
One of the commission’s key recommendations is that the multiple childcare payment currently available be rolled into one means-tested subsidy. While Ms Page welcomed the idea of a single subsidy, she said parents would not be able to work out what they would get from the government.
“It’s a complicated mathematics formula.”
The commission has recommended funding be prioritised towards low and middle income families. The subsidy rate would cover between 85 per cent of costs for families with incomes at or below $60,000 and 20 per cent for families earning $250,000 or above.
But groups including Goodstart Early Learning cautioned that the payments in the report are not a percentage of the fees parents actually pay but “a percentage of a fixed amount set by the government”.
“The fixed amount suggested in the report is lower than the actual fees paid by up to half of the families using child care centres in Australia,” chief executive Julia Davison said.
Under Productivity Commission modelling, families earning over $160,000 will get less childcare support under the proposed reforms. The Australian Council of Social Service also cautioned that some low income families would be worse off.
Along with other groups in the childhood and community sector, advocacy group The Parenthood is calling on the federal government to increase funding to the sector, rather than make changes within the existing $7 billion a year budget.
“Because the Productivity Commission was tasked by government to come back with recommendations that don’t cost any more money, what we see … is merely a moving around of funds, resulting in a few winners, but greater sea of losers,” executive director Jo Briskey said.
The Abbott government has not yet given a clear indication about whether it will increase funding. Social Services Minister Scott Morrison is calling for a bipartisan approach to childcare policy, saying that if funding is boosted, there will need to be savings elsewhere. He is due to meet Labor’s childcare spokeswoman, Kate Ellis, next week.
The Productivity Commission’s report, which went to the Coalition last October, also recommended that federal funding be extended to nannies. This was applauded by the Australian Chamber of Commerce and Industry, who said it could be a cost-effective option for families with multiple children under five.
On Friday, Mr Morrison said the government was not at the stage of ruling anything in or out from the report.
“I’m very keen for our government members to get out and canvas their communities widely.”
