Making child care count is not just about cost

Evidence for the stress on the child-care market is the way in which the CPI's child-care index has consistently risen much faster than the rate of inflation in the whole economy. So while fee relief may feel great for parents in the short term, it threatens to quickly filter through the system and lead to another round of inflationary pressures on the price of child care. The Coalition's up-front delivery mechanism will mean that the inflationary effects will be felt much faster.

Labor and the Coalition do have supply strategies. Labor plans to build 260 new centres in high-demand areas and deliver 15 hours of free preschool to all four-year-olds. The Coalition will provide up to $1 million capital funding to local governments to build or extend child-care centres in the areas where there are no vacancies. These policies will go some way to redressing supply constraints.

But the difference in the time it will take to build, accredit and employ staff in these new centres, and the April or July 1 2008, starting date for the new improved rebates, means that it will be the rebate that dominates market dynamics and fuel demand.

In a prosperous country such as Australia, the wellbeing of children must be front and centre of all policy developments. Increased public investment must be directed towards measures that promote a high-quality national system of early childhood education and care that is available to all children - and is not just an election sweeteners for parents.