18 SEPTEMBER 2024 – The Centre for Policy Development (CPD) welcomes the release of the Productivity Commission’s final report on Early Childhood Education and Care (ECEC). This report is the capstone in a series of extensive government-commissioned inquiries into ECEC reform, and represents a critical moment for action. The government now has an historic opportunity to outline a practical plan to build a truly universal early learning system – one that all children and families can rely on for generations to come.
CPD supports the Commission’s call for a universal entitlement to a minimum of three days of early childhood education and care for all children aged 0-5 years, and recommends that the government enshrine this entitlement in legislation, making it a national right akin to schooling, superannuation and Medicare.
The Commission’s recommendation to raise the maximum rate of the Child Care Subsidy (CCS) for low-income families is a positive short-term measure. However, continuing to tweak the existing funding system fails to address the deeper systemic issues within the current funding model, such as access, affordability and complexity.
Research from CPD, as detailed in the Growing Together report, shows that the current CCS significantly impacts affordability and accessibility for families. A child-centred model, where providers receive a base level of funding with additional support for specific costs like assisting vulnerable children or covering high rents, would more effectively address these issues.
Introducing set fees, such as $10 per day and free for low-income families, would further enhance affordability and accessibility. We urge the government to go further than the Commission’s recommendation and adopt a set fee model, as this will be crucial for delivering a truly improved system in the long term.
CPD strongly supports the Commission’s recommendation to remove the activity test – something that both CPD and sector advocates have long recommended. Eliminating this barrier will allow 126,000 children currently excluded from early education and care to receive the support they need to thrive.
Addressing current workforce challenges will also be crucial. We welcome the government’s recent $3.6 billion announcement of a 15% pay rise for early educators. Beyond just wages, enhancing recruitment and retention, career and qualification pathways and improving conditions for ECEC educators will be vital to lay the groundwork for a new system.
Centre for Policy Development CEO Andrew Hudson underscored the once-in-a-generation opportunity for the government to create a truly universal early education system – one that all Australians can rely on for generations to come.
“Continuing with small tweaks that fail to address the deeper systemic issues with the current funding model and approach to parent fees – such as access, affordability and complexity – won’t help deliver a truly universal early childhood education system. Moving to a set fee and replacing the Child Care Subsidy with base funding plus needs-based supports for all providers, is the only way to deliver an accessible, affordable, inclusive and high-quality system for all children and families in Australia.
“We know that the benefits of a universal system are immense. Children would get the support they need to thrive into adulthood, parents will be better able to balance work and care, it gets more people back into the workforce. It’s good for children, good for families and good for the economy – it’s a no-brainer.
“CPD research has shown that a truly universal system more than pays for itself. It could generate up to $19bn annually in tax revenue and savings. These savings include fewer health issues, lower crime rates and decreased welfare costs. It really is a win-win.
“The Prime Minister, the Treasurer, the Minister for Education – all have reiterated their commitment to building a universal early education system. This is something that can cement their legacy, that we can eventually look back upon as a key part of what it means to be Australian – in the great tradition of universal schooling, superannuation or health care.”
