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Making child care count is not just about cost

By Elizabeth Hill - posted Friday, 16 November 2007

Early childhood education and care in Australia is a fragmented mess that is falling way behind world's best practice, with public expenditure ranking second last in a recent league table measuring spending on early childhood services by developed economies. At a time of record public surpluses, Australia should be making a larger investment in children and their wellbeing.

Election campaign promises to increase child-care subsidies to parents (Labor) or pay the child-care rebate up front (Coalition) may win votes, but will do nothing to ensure a top-quality child-care system. It is time to move the debate on from the obsession by parents and politicians with affordability and begin to focus on promoting the wellbeing of children.

The fundamentals of a high-quality national early childhood education and care system have been well established by research here and internationally. It is not rocket science. But it does take resources - and these resources need to be carefully targeted.


Research demonstrates that high-quality early childhood education and care is a function of high staff-to-child ratios, a high level of carer and teacher skills and qualifications and a small care group size.

Public investment needs to reflect this. Staff/child ratios of at least one adult to three children for infants; one adult to four children aged one or two years; and at least one adult to eight children aged three to five years would go a long way to providing a high-quality system.

Children and parents who use child care benefit form long-term care relationships. Stable care relationships require skilled teachers and carers who are appropriately trained, qualified and rewarded with decent rates of pay, conditions and career structures. But Australian child-care workers are among the lowest paid in the labour force.

The Government has a strategic role to play in developing a highly qualified and stable workforce and the major parties should contribute to boosting the quality of early childhood services in these ways.

This is not to say that measures to improve affordability are unimportant. They are important. But even on the affordability front, the policies advocated by both parties will not deliver sustained results.

Labor has promised to lift the child-care rebate to equal 50 per cent of out-of-pocket expenses paid by parents using Commonwealth-approved child-care services. But new rebates add to an already impoverished set of policies to address affordability and will further exacerbate fee inflation.


As part of the Coalition's new tax system introduced in 2000, the child-care benefit was designed to provide parents with a subsidy for the cost of care. Public discontent about the escalating cost of child care saw further financial support delivered in the past two budgets.

Yesterday the Coalition promised to make it easier for parents to receive the rebate, paying it in advance to the child-care provider and reducing the effect on weekly household budgets.

But research published by the National Centre for Social and Economic Modelling in 2005 provides good reason for concern about the efficacy of such rebates.The centre showed that when the benefit was first introduced, the intended fee relief was only short-lived and any immediate gain was soon lost as the public subsidy was quickly translated into an increase in the price of child care. In a tight child-care market with limited supply, this was inevitable.

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First published in the Sydney Morning Herald on 13 November, 2007

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About the Author

Elizabeth Hill teaches political economy at the University of Sydney and is co-convener of The Family Policy Round Table

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