Childcare – why should you pay for it?

Starting before they are born, our governments spend a lot of money on children.

The Commonwealth budget for education alone is $67 billion, and in NSW $24 billion. Add the other states and territories, plus health care, and as the saying goes, pretty soon you’re talking real money.

While our society obviously values children highly, it is rare that anyone questions why so much of their cost is socialised. Having children is, after all, a choice. Other lifestyle choices do not attract such taxpayer generosity.

Among the taxpayers who provide the funds are many who do not have children themselves. Some are yet to start a family, while others have chosen not to have them. But there are also those who, for various reasons, would very much like to become parents but cannot.

A strong case is always necessary to justify spending other people’s money, but a particularly convincing case is required to justify compelling those who cannot have children to pay for other people’s children. It’s like obliging paraplegics to pay for the running shoes of the able bodied.

The government thinks there is a strong case for childcare. It wants women to return to the workforce as soon as possible, so they resume paying tax and contributing to government revenue. With state and federal governments all addicted to spending more than they collect, they have a strong incentive to increase taxpayer numbers.

The government also argues that the less time women are out of the workforce, the more they retain their work skills. This is presented as a benefit to the women, as women who return to work more quickly typically earn higher incomes. However, they also pay more tax.

For the mothers of the children, the case is not so clear. Some women are obviously career oriented and anxious to return to the workforce as soon as possible. However, there are many who would prefer to care for their children themselves, especially while they are small, rather than entrust them to strangers in childcare facilities. Motherhood is a powerful instinct, and most jobs are rarely more engaging than raising a child.

The key reason most do not remain at home is economic: single income families with children typically struggle to pay a mortgage or rent plus general living expenses, vehicle expenses and the rest.

The underlying cause of this is government policies, particularly high income taxes, excise on essentials such as fuel, and the regulation and taxes that lead to expensive housing. Remove these and it would be a lot easier to live on one income.

From the point of view of the children, the case for childcare is even less compelling. Mothers have been caring for their children for thousands of years and have not recently become incompetent.

But we are told that it is no longer sufficient to simply keep children safe, happy and entertained while their parents are at work; the children must now be educated by qualified early childhood educators. It is now known as early childhood education and care (ECEC).

Moreover, whereas childcare workers were once just sensible, caring people, most with children or grandchildren of their own, they must now hold post-school – and sometimes even university-level – qualifications. Mothers who have successfully raised four children of their own cannot become childcare workers unless they have obtained the appropriate qualification, while those who have a qualification but no prior childminding experience are fine.

There has also been a ratcheting up of regulation of the physical environment, the programs and routines offered, plus the ratio of staff to children in childcare centres.

For the most part this has been driven by middle-class parental guilt. That is, parents seeking to justify the decision to place their children in childcare are demanding standards that allow them to believe their offspring are receiving a better start in life than if they stayed at home. It makes them feel better about leaving the kids with someone else.

Unfortunately, there is no evidence to show that these standards are enhancing children’s outcomes. This was conceded in the Productivity Commission Inquiry Report into Childcare and Early Childhood Learning. The evidence indicates that the only children who benefit from ECEC are from dysfunctional households, such as those where substance abuse is an issue.

Furthermore, the ramped-up regulation and credentialism have made childcare seriously expensive. Even moderately well-paid parents baulk when the cost is almost as much as they can earn by going to work. For the poorest parents, especially single mothers who have a strong need to return to work, it is simply out of reach.  

Childcare advocates, especially those with a pecuniary interest, are seeking to convince the government to implement a universal ECEC system, based on recognising early childhood education as a fundamental need. Naturally they claim this should be provided at minimal cost to parents, arguing it would give children the support they need to thrive into adulthood, while parents, particularly women, would be better able to balance work and care responsibilities.

This is a profoundly elitist view, based on the assumption that virtually all women prefer to return to work, and that virtually all children benefit from early childcare education. As previously discussed, neither is true. Moreover, the cost of such a system, tens of billions of dollars, would be borne by taxpayers.

What is never considered is changing the incentives so mothers do not feel so pressured to return to work. If income taxes were significantly reduced by, for example, allowing single income households to split their income between working and non-working parents, the pressure would ease. If the cost of childcare was tax deductible, it would help. If fuel excise plus GST did not take over half the cost of fuel, households would have more money for other purposes. If housing was not so heavily taxed and regulated by local, state and federal governments, there would be more houses at affordable prices.

And if childcare was less regulated, with only those opting for early childhood education paying for it, the cost of ordinary childcare to mothers who genuinely need it would be more affordable.

As it stands, ECEC is a taxpayer-funded elite middle-class racket. Rather than hit taxpayers for ever increasing subsidies, the sector needs to be substantially deregulated.  Middle and upper-middle class families who expect gold-plated, diamond-encrusted childcare – with its university educated workers and low staff ratios – should pay for it themselves.