The Guardian 17 May, 2006
Budget 06:
Childcare thrown to market forces
On Budget night, Federal Treasurer Peter Costello boldly predicted that about 700,000 children will have received childcare places by 2009 under a new system of childcare funding. Few share this confidence.
Long-time Howard friend and adviser Pru Goward is not convinced that the uncapping of family day-care places will overcome current shortages. Liberal backbencher, Western Sydney’s Jackie Kelly agrees.
Others commentators — like Catholic Social Services Australia Executive Director Frank Quinlan — fear that the Government’s decision to let market forces totally shape the provision of childcare will see services shift to follow a "map of profitability".
Labor leader Kim Beazley has also dismissed claims that the invisible hand of the market will magically deliver 25,000 new places. He has pledged a future Federal Labor Government to spend $200 million on 260 new childcare centres on primary school grounds. Childcare trainees would receive $1,200 towards covering the cost of training and $800 a year to apprentices in the childcare field.
From July, the Howard Government will remove controls on who can provide family day-care and where. At present, the Government controls the number of family day-care providers in a given area. To an extent, this has helped ensure the viability of the providers currently registered in the system. Similar caps on out-of-school hours care are also set to be jettisoned.
The changes have encouraged companies like ABC Learning Centres and Childs Family Kindergartens to look at moving into the before- and after-school market. New "hybrid" centres offering care for children above and below the age of five may appear.
Jonathan Kruger of the Childcare Associations Australia has warned that the current situation, characterised by simultaneous childcare shortages and gluts across the country, will worsen without government intervention. "There has been a systematic failure of the free market to deliver childcare places where they are required in long day care", he told The Australian Financial Review.
Robyn Munro-Miller of the National Association of Outside School Hours Care added the uncapping of places was irresponsible. "It seems the Federal Budget was not an attempt at finding solutions but at removing responsibility from the Government from finding solutions."
Family and Community Services Minister Mal Brough is dismissive of the critics. "… I think there are a small minority of people that say childcare basically should be free — that’s what they are really saying when they say affordable — and we don’t accept that." While the Government accepts that shortages exist in the system, it has no time for those complaining that they simply cannot afford suitable childcare.
In fact, though chronic shortages plague childcare provision in inner Sydney and Melbourne, up to 30,000 places are currently vacant Australia-wide. The latest changes do nothing to alleviate the financial problem posed by childcare to lower income parents who are simply not able to afford the costs involved.
And the problem is worsening — fees for childcare rose by 5 per cent in the first three months of 2006, alone. "Middle income families using moderate amounts of childcare receive only the minimum childcare benefit and cannot take full advantage of the 30 per cent rebate, which benefits those on higher incomes the most", as Federal Sex Discrimination Commissioner Pru Goward observed.
Mal Brough is claiming that, if providers have access to up-to-date information about where demand exists, that market forces will cure all ills. To this end, he is proposing that an additional $50 million be spent to improve market data and track usage and inquiries from parents. The money was not made available in the Budget, however.
"People aren’t aware of things like outside-of-school-hours care, and many of the long day care centres actually complain to me that they in fact could have more people in them", the Minister lamented. And while a barrage of complaints continues to be directed at the Government about the prohibitive out-of-pocket costs facing families for childcare, the option of increasing payments to lower income parents or other subsidies for places is simply not being entertained. "We’re not in that game", Mr Brough said.