Monday next week starts a new children’s services funding program by increasing the government subsidies to parents, as described below.
Child Care Subsidy (CCS) is changing from July 2023. For the average family on about $120,000 with a child in care three days a week, the changes will cut costs by about $1,700 a year. Most families using early childhood education and care will get more subsidy.
However, the responses published so far suggest that there will be few benefits that flow to families, as the ALP government has made no changes to ensure that the current fees will be retained or recognise that many services have already raised fees in anticipation of higher profits. The childcare services have massively become privatised and often run on business models including by overseas chains.
As there is no control over fee levels and setting fair pay rate minimums for low wage staffing, the above rises will be likely to be used for profits, not to cut fees or encourage more female workers. However, the last sentence below is in an ALP outline of the benefits of their scheme somewhat surprisingly finished with the following words that suggest some awareness of the flaws.
• And the Government still has no plans to control fees in the future.
Apart from starting with And rather than But, the sentence above shows the two major flaws in the current fee rise model! What proof is there that the bulk of private providers will neither raise fees nor agree to raise inadequate pay? Both are necessary to improve children’s services now. However, there are no limits put on how centres decide to use their extra income.
We need to develop a much better plan to ensure both the fair distribution of centres and the requirement that income gained must be used to improve the services, e.g. fairer pay, not shareholder profits. Despite these issues needing attention, the government shows no signs of imposing the necessary controls on the spending of its contributions to ensure better services.
Shifting the contributions from paying families, and returning to direct service funding, with appropriate conditions, would stop the misuse of funds. Why not do that now?
Where once most of the services were non-profit and community run, or local or state government run. Post John Howard, the various Coalition governments expanded the for profit private ownership, including big business chains.
The spread of newly established centres sought profits from real estate and the financial status of local parents to establish businesses. The needs of parents, particularly in isolated or low income areas were not good business options so many areas are defined as ‘deserts’ lacking services.
The next section quotes an ALP union description of their model, just mentioning the problems!
How Families will Benefit
An Albanese Labor Government will reduce the cost of child care and make it easier for mums, children and working families to get ahead.
– Lift the maximum child care subsidy rate to 90 per cent for families for the first child in care;
– Increase child care subsidy rates for every family with one child in care earning less than $530,000 in household income;
– Keep higher child care subsidy rates for the second and additional children in care;
– Over the past 12 months, child care costs soared by 6.5 per cent – almost double the rate of inflation. Fees have increased by 41 per cent since the Liberals came to government.
– Under Scott Morrison’s recent changes to the subsidy, hundreds of thousands of families will miss out on relief compared to Labor’s Cheaper Child Care Plan. And the Government still has no plans to control fees in the future.
The bold statement above raises the serious problems of the new model.
Unless the government shifts the payments to the centres with conditions to make them conditionally limited to improving costs and quality, the proposed rise in fees is uncontrolled.
The ALP needs to develop a much better plan to ensure both the fair distribution of centres and the requirement that income gained must be used to improve the services, e.g. fairer pay, not shareholder profits. Despite these issues needing attention, the government shows no signs of imposing the necessary controls on the spending of its contributions to ‘ensure better services.’
Let’s fix it now!