Generating Requests for a New Funding Model

Nowadays, high-quality childcare has become essential for proper functioning, both for the family and the community. However, the cost of early education has raised many questions concerning the fact of whether it is treated as a necessity or a luxury good? According to the analysis of the Mitchell Institute, an Australian family with both parents on the average wage spends approximately $6,000 out-of-pocket per year on child care. More specifically, around 27% of family incomes are directed towards covering child care costs. Considering the numerous benefits of child care, parents should not be placed in a situation to choose between quality and affordability. Sadly, that’s the case in the country.

What Is the Actual Cost of Child Care Services?

A well-known fact is the government has significantly increased the spending on child care in the last 10 years. To be precise, they have recognised the importance of this development and increased investments by 140%. Yet, this number is still below the OECD’s average of 0.8% of GDP. Additionally, the families’ investments have increased by 150% as well. This means the parents’ contribution to their child’s early education has grown at a faster pace. Due to this fact, many parents indicate quality childcare costs as an extremely important factor in the decision of having another child. Research shows $1 invested for child care can deliver $2 of returns to the economy. Yet, the government is under-investing in this sector, simultaneously choosing to spend a much larger share of investment on the school system.

The School System Is Receiving a Higher Share of Investments

The school system grants the parents with the possibility to choose among the public and private sector. However, when it comes to child care services, parents are quite limited on this issue. Many parents on the average wage state that childcare fees are higher than private school fees. According to Jen Jackson, the education policies lead at VU's Mitchell Institute, "The cost of childcare for families in Australia is among the highest in the world". With the government contributing close to $12,000 for children going to public school, the family is left with minimal, almost insignificant costs. Even if the child goes to a private school, with the government’s contribution of almost $10,000, the family would pay $5,200 (the median out-of-pocket cost for all private schools) a year out-of-pocket. Compared to the cost of $5,782 a year out-of-pocket for child care services, we can confirm that prestigious schools are often cheaper than early education.

Demands for Equal Funding Among Child Care and Primary Schools

To ensure affordability and universal access to child care services, the Mitchell Institute report demands funding for child care education similar to the one received by the school system. The proposal was supported by Rebecca Stiles, director of the Hillbank Community Children's Centre in Melbourne. Another issue concerning the child care services sector is the underpayment of the educators. More specifically, despite the large investments in this sector, the workforce is still receiving a wage that is below average. The government's response highlights their significant spending on child care in the last decade. Additionally, they state that the number of families seeking a rebate has increased to 852,160 families, which is an extreme boost in numbers. The Federal Education Minister Dan Tehan stated that reforms made two years ago have decreased the out-of-pocket expense by 4.2 per cent. He also added the government will continue to work with the sector to put downward pressure on costs. All in all, the debate had opposing arguments which generally didn’t result in detailed conclusions. The issue is continuing to raise concerns and suggest measures for improving the affordability and accessibility of high quality childcare services for each child; irrespective of what his/her parents pay.