EARLY CHILDHOOD EDUCATION AND CARE
PRIORITIES
- Abandon the activity test.
- In principle support for a sustainable universal early childhood education and care system and a plan for delivery, building on the recommendations of the 2024 Productivity Commission Report.
- Guarantee at least 3 days a week of free early childhood education and care for every child between 2 and 4 years old.
- As a matter of urgency initiate Federal Government investment in early childhood education and care facilities in rural, regional and outer metropolitan Australia with preference for directly funding not for profit, community and government centres.
- Federal, state and territory governments to finalise and work to realise a national vision for early childhood education and care, centred on leadership of a transformed national system, equity and funding for strengthened community, not for profit and public provision.
RATIONALE
The Federal Government subsidises providers through the Child Care Subsidy (CCS) which enables them to lower their fees and adjust or waive them depending on a family’s income and other factors.
The Australian Productivity Commission delivered its report and recommendations on achieving a Path to Universal Early Childhood Education and Training in September 2024.
The recommendations include abolition of the activity test, which has excluded children whose parents do not meet criteria of engagement in paid work, study or volunteering.
An estimated 126,000 children miss out on childcare as a result of failing the activity test, many of them from Indigenous and low-income backgrounds.
Education advocates have long argued for scrapping the test which they say results in childcare being a parental privilege rather than a young person's right — like primary school.
Acknowledging serious market failure, the Commission also recommended greater government involvement through direct funding or incentives in building and funding childcare in rural and regional Australia.
There is extensive evidence of ‘childcare deserts’ where there is limited or no childcare available because providers are unable to cover costs or make profits in poorer areas.
The Productivity Commission report recommends further adjustments to the CCS to provide 3 days of free childcare for 48 weeks of the year for families earning less than $80,000 a year and up to $140,000 for those with multiple children in care.
Since the Report’s release, advocacy groups and researchers including WEL have applauded proposed removal of the activity test and the vision of a universal early childhood and care system.
WEL however agrees with the view that the underlying assumptions of the Report indicate that the Productivity Commission does not grasp the basic incompatibility between a market led system where private, for profit providers increasingly dominate and a universal, therefore free or affordable early childhood education and care system. Retaining a largely private for profit system means fees will inevitably keep rising and poorer, rural, regional and remote communities will remain childcare deserts.
Retention of the market-based model where for profit providers continue to increase their market share will exacerbate ongoing problems that families experience with ECEC in terms of cost, complexity and availability.
Nor would such a model improve women’s capacity to engage in full time work as the costs of childcare will over time outweigh additional income from employment.
Professor Deborah Brennan, Assistant Commissioner for the Productivity Commission Inquiry, made a supplementary statement in the Inquiry report in which she identified the need to ‘strengthen and expand not for profit provision’ and for ‘regulatory and funding settings which prioritise providers that deliver high quality affordable ECEC to families’. On measures of quality the not for profit sector significantly outperforms for profit providers.
Working together, the federal, state and territory governments have already developed a draft national vision.
A national vision should clarify and spell out the roles early childhood education and care can play in strengthening Australia’s economic life, social inclusion, education equity and well-being, and would help shape future planning and funding priorities. It would serve as a basis for stewardship of a national system and for funding decisions to drive improvements in equalising children’s access and engagement, standards, service design and delivery. The draft vision is unclear about the vehicles for reshaping the new national system, using the term ’governments’ without specifying how the federal, state and territory governments would work together to exercise ‘stewardship’ over the transformed national system.
Australia needs better public and political understanding of the multiple ways a well-funded universal early childhood education and care system could play in enhancing parental well-being, enabling women’s full workforce participation and fostering all children’s cognitive, social and emotional development and developing and sustaining a well-paid professional workforce.
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