Monique Ryan (Kooyong, Independent) Share this | Hansard source

We all recognise the importance of quality education, but that of early childhood education has historically been undervalued. As businesswoman and now governor-general Sam Mostyn said last year, 'Early education and child care are as important to Australia's economic future as the introduction of public schooling and of Medicare.'

In this parliament the cheaper-childcare reforms of July 2023 improved childcare affordability for all types of care and for households across the income spectrum. That reduction was proportionally largest for the lowest income families, but they do still continue to spend the largest proportion of their disposable income on child care. I note that the affordability benefits from those changes to the childcare subsidy were unfortunately quickly eroded by price hikes in childcare centres.

Providers' profit margins are higher in the major cities and in more advantaged areas. There are more services in those areas, where demand is generally higher and households generally have a greater ability and willingness to pay for them. The availability and quality of educators and staff have a significant impact on the quality, reputation and profitability of childcare services.

Stable staff tenure and community also contribute to the viability of those childcare centres. We know that labour shortages are affecting childcare services across Australia but particularly for those in rural and regional settings, for First Nations communities and for children with a disability who have complex needs or those experiencing disadvantage, as well as children aged under two.

In a time of stagnant productivity, access to child care remains the most significant barrier to workforce participation in Australia. Child care is unaffordable for as many as 40 per cent of Australian families. The average family with two children in early learning spends 16 per cent of its income on childcare fees. Twenty-four per cent of Australia is considered a childcare desert, in which there are at least three children fighting for every available spot. Only eight per cent of the country currently has enough access to centre based day care to provide at least three days of care for all children aged zero to five.

This is the result of decades of policy failure by successive Australian governments. As a result, for many parents, usually the mothers, it's just financially not worth it to go back to work. Others have to choose to work fewer hours. That costs them doubly. Mothers who are out of the workforce or underemployed while raising young children have slower career progression and lower salaries even after they return to the workforce. This impacts their financial security and their accumulation of superannuation. It exacerbates financial stress on families. It decreases national productivity and it perpetuates gender inequality and the gender pay gap. There is ample evidence of not only the substantial economic benefits of investment in early education but also the benefits for children.

As the only paediatric neurologist ever to occupy a seat in this parliament, I can tell you that children's brains develop more rapidly in the first five years than they do at any other stage in their life. Children develop better when they're stimulated. Quality early childhood centres don't just babysit children; they educate them. They help them gain early numeracy, literacy, problem-solving and social skills. It's really important to note that the disadvantaged children who might not be benefiting from a rich learning environment at home are those who benefit even more from quality early childhood education.

The current activity test determines the number of subsidised childcare hours that Australian families can receive based on their engagement with recognised activities like work or study. It effectively limits many Australian families access to ECEC, particularly those with lower incomes and those with irregular work patterns. Families with fewer than eight hours of such activities per fortnight currently can't access subsidised care unless their income is below $83,000. Those with an income over that income threshold currently receive no subsidised care. It's good, therefore, to note that the bill now before this House modifies the childcare subsidy activity test so that now all Australian families can access at least 36 hours of subsidised care every week, regardless of the time spent in recognised activities. The bill also guarantees 50 hours of subsidised care a week for those with more than 24 hours of recognised activities per week, as well as families caring for Aboriginal and Torres Strait Islander children.

These changes are a definite improvement on the existing arrangements such as they are, but they still fail to accord with the advice of the experts, which was to abolish the activity test altogether. The activity test is inconsistent with international best practice, which is for the universal provision of early childhood education for all preschool aged children. The contemporary labour force requires flexibility, and the activity test is a poor fit for its needs. Impact Economics and Policy has reported that at least 126,000 Australian children from the poorest households are currently missing out on childcare because of the activity test.

Reviews by the Productivity Commission, the ACCC, the Interim Economic Inclusion Advisory Committee, the Australian Childcare Alliance and the Women's Economic Equality Taskforce are unified. They have all called for the removal of the activity test. They found those families which need more childcare than they are currently able to access with the existing activity test, particularly the lower income families, are being disadvantaged and actively stopped from accessing the best-practice childcare. The test has significant administrative complexity for little benefit. It makes it harder for parents to access the support that they need when they're actively looking for a job or when they're struggling with variable shifts, and irregular and unpredictable working hours. Both the ACCC and Early Childhood Australia have also recommended a minimum entitlement to three days of quality ECEC for all Australian children. The Centre for Policy Development went a bit further and suggested we create a single legislated national entitlement for all children which includes both childcare and preschool.

The legislation before the House will improve affordability of childcare for a small proportion of families, but its settings for subsidised care remain complex and will still act as a barrier for many Australian families. We should work to the abolition of the activity test. A universal access model in which every child is entitled to a minimum number of subsidised hours per week, regardless of their parent's activities or income, would reduce administrative burden, and it would make the system easier to understand. We could also streamline the subsidy calculation process by using a flat rate or a simplified sliding scale based on income alone without considering activity levels. It would make it easier for all Australian families to understand their entitlements.

There is, of course, a cost to all such measures. Abolition of the activity test and provision of universal access to subsidised childcare would carry a significant cost. The childcare sector is chronically short of staff. Increasing demand will only exacerbate that issue. We'll also need to increase the number of childcare places to meet the increased demand generated by these changes. But, if something matters to a country, it finds the money for it. This is such an important issue for our economy, for Australian parents and for Australian children.

The ACCC has found that the current one-size-fits-all policy approach cannot meet all needs across the childcare centre. They said:

… the highly localised nature of childcare markets; the way parents select services based on availability and informal assessment of quality; and providers' supply decisions mean … that market forces alone are not meeting the needs of all children and households.

We need a mix of different regulatory measures to improve outcomes for households in diverse circumstances and in locations across the country. As Gina Cass-Gottlieb, the chair of the ACCC, has said:

Market stewardship roles can be effective in care-based economies where competition-driven market dynamics do not always achieve the desired outcomes,

The ACCC recommended that:

… the Government consider providing funding or grants directly to providers to assist with the costs of supplying services in areas that are considered unprofitable, or supplying services to groups within the community where costs of providing care are higher …

We know that First Nations children are less likely to be enrolled in child care. There are a number of reasons for that. The burden of the administrative process can discourage carers from using formal childcare services, but also many families are hesitant to provide the information required because of their previous negative experiences in dealing with government departments. In addition, the childcare subsidy system doesn't always recognise First Nations kinship care relationships in a timely way, and that can deter families and carers from seeking to access the subsidy. The subsidy also has limited influence on reducing childcare fees or prices for family day care, outside-school-hours care and in-home care.

Family day care is an important alternative childcare choice for many families as it may offer more flexible hours of care and adjustable session lengths, and sometimes it better caters to cultural and linguistic needs. Despite that, since 2018 the number of family day care and in-home services has declined in this country; 116 family day care services and 19 in-home care services have closed. This decline in family care services has disproportionately affected culturally and linguistically diverse households, low-income households, those living in very remote areas and carers working non-standard hours.

Offering universal childhood education and child care is not as simple as merely making existing centres free or nearly free. We have to have an overarching vision for best practice child care. My colleague the member for Goldstein, in her amendment today, which I supported, called for the establishment of an early childhood development commission. Such a commission, which was recommended by the Productivity Commission, could play a crucial role in enhancing the quality, accessibility and equity of early childhood education and care across this country. It could offer many benefits.

Firstly, a dedicated commission would provide centralised oversight and coordination of early childhood education and care, policies and programs. It would ensure consistency and quality across the country. It could address disparities in access to and quality of care, particularly for disadvantaged and vulnerable children. It could set and enforce high standards for early childhood education, developing and implementing best practices and professional development for educators, leading to improved outcomes for our children.

The commission could analyse data on early childhood development, providing valuable insights to inform policy decisions and improve practices. This evidence-based approach would help identify gaps and areas for improvement. The commission could offer resources and support to families, helping them navigate the ECEC system and access the services they need. This would include providing information on available programs and subsidies. With a focus on long-term planning, the commission could develop strategies to address future challenges and opportunities in early childhood education, ensuring sustainable and ongoing improvement.

The quality of our early childhood education has to be high. Workforce issues and barriers to access must be addressed; the sector must be valued. We need to have a concerted effort to ensure that all disadvantaged families can access the services and support that they need and deserve. It's a lofty goal, but it's worth pursuing.

Universal early childhood education has the potential to be a game-changer for Australian children and families, and for our economy now and into the future. Universal early childhood education has the potential to benefit children through quality learning environments, to reduce financial pressure on parents, to reduce gender inequity and to enhance economic outcomes for Australia. For that reason, I commend this bill to the House.

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