Navigation: Previous Page | Index | Next Page
CONCLUSIONS AND RECOMMENDATIONS
Chapter 3 – Use of Child Care in Australia
Data sources
Recommendation 1: The Committee recommends that the Department of
Family and Community Services, in conjunction with the other major collectors
of data on children's services, adopt a more coordinated approach to data
collection to ensure that overlap and deficiencies in the current data
collection are overcome.
Recommendation 2: The Committee recommends that the Department of
Family and Community Services expedite the processing of results from
future surveys and census collections so that up-to-date information is
available for policy development and planning purposes.
Chapter 4 - Impact of Changes to Child Care Funding on Child Care
Services
Changes involving long day care centres
Conclusion
The Committee has considered the evidence before it and concludes that
the operational subsidy should be not reintroduced for community-based
long day care centres. The evidence is clear that the subsidy benefited
only a small proportion of those families, be those low, middle or high
income families, who were able to access community-based care. Those families
using private long day centres, the majority of child care users, did
not benefit from the operational subsidy. Therefore, the reintroduction
of the operational subsidy cannot be supported on equity grounds.
However, the Committee supports the concept of the `mixed economy' model
for the child care sector. It considers that both community-based services
and private-for-profit services have a valuable role to play in the provision
of child care in Australia. The community-based sector and private sectors
provide alternative models for the management of child care services and
provide families with choice of care and choice in level of participation
in the provision of services for their children. The Committee also notes
that the community-based sector makes an important contribution to the
social capital and infrastructure of communities. Further, the Committee
considers that the growth of one type of service provider to the detriment
of the other would not be a positive outcome for the industry. The emergence
of one provider type to act in a monopoly position may lead to price increases
and adversely impact on families and children.
The maintenance of the mixed economy model requires that both the community-based
and private services are encouraged and supported. At the present time,
the community-based sector is not only dealing with the loss of the operational
subsidy but also facing structural problems, such as the proliferation
of small centres and the unregulated growth of the private sector. Services
are also facing problems associated with falling utilisation rates and
increasing fees.
While many centres have attempted to improve efficiency through cost-cutting
and other measures, community-based centres are faced with additional
costs that private operators do not have. In particular, community-based
centres must meet the cost of running committees of management. Community-based
centres must also undertake investment in computerised management facilities
to ensure efficient operations. The Committee considers that recognition
should be given to the extra costs imposed by the community-based model
on service providers.
Although $8.3 million has been allocated over the next two years to assist
centres with restructuring, the Committee considers that further direct
support for community-based long day care centres is required to assist
these centres to maintain viability. Many community-based centres will
have to undertake major changes to remain viable: to amalgamate or co-locate
or extend existing facilities. The capital costs of either of these choices
may be beyond the financial means of many centres and government assistance
should be provided to enable them to undertake restructuring.
In providing such assistance the Committee is mindful that careful planning
must be undertaken to ensure that informed decisions are made that will
enable community-based centres to remain viable in the future and that
supply and demand considerations within the local areas are taken into
account. While the new National Planning System (see paras 2.43, 4.78)
will go some way towards this, the Committee considers that models such
as that established by the City of Darebin may provide an effective means
of ensuring efficient delivery of child care services. The model not only
incorporates community-based and private sector services, but also it
recognises the unique position of local government in balancing the needs
within communities by maintaining and enhancing the role of local government.
Recommendation 3: The Committee recommends that the Government support
the `mixed economy' model, whereby both community-based and private-for-profit
services play a valuable role in the provision of child care, by encouraging
both services and especially ensuring that community-based services continue
as viable service providers.
Recommendation 4: The Committee recommends that to ensure the continuing
viability of community-based services:
- a one-off grant be provided to community-based centres in recognition
of the additional costs associated with supporting committees of management
and the need to upgrade management facilities to improve efficiency;
- consideration should be given to expanding funding for restructuring
within the community-based sector; and
- funding be provided to develop innovative models of child care
based on the community development approach.
50 hour limit
Conclusion
The views received concerning the 50 hour limit reflect both the
competing interests over the question of child care funding and the complexity
of the situation within the industry. First, the Commonwealth has imposed
a 50 hour limit on Childcare Assistance as a means of ensuring that
assistance is provided for care that is actually used and encouraging
providers to set their fee schedules so that families are not financially
disadvantaged by the imposition of the limit.
Secondly, providers of services argue that they must meet the demands
of the community which requires them to open for more than 50 hours
per week. By doing so, providers incur costs which cannot to any significant
degree be decreased because of licensing regulations, particularly those
concerning staff/child ratios, and staffing considerations such as the
employment of casual staff rather than permanent full-time staff which
may compromise quality of care.
Thirdly, while evidence was received that many centres provide session
rates for care which allow families to access only the care that they
require, there appears to be a lack of flexibility in fee structures that
allows fees paid to more accurately reflect hours used. Families are financially
disadvantaged in this situation. Anecdotal evidence received suggests
that this is contributing to decisions to decrease the days of care or
change work patterns or use informal care for part of a week.
The Committee considers that it is appropriate that limits should be
placed on access to assistance that goes to unused care. Further, those
families who genuinely are in need of more than 50 hours of care are able
to apply for an exemption to the limit.
However, the Committee also considers that finding a mechanism which
meets the Government's aim of reducing the proportion of assistance paid
for unused care and reflects centres' charging practices that are imposed
because of community demands for extended hours of opening, regulatory
restrictions and economic viability constitutes a significant problem
and should be addressed.
Recommendation 5: The Committee recommends that the review of centres'
charging practices referred to the Child Care Advisory Council be conducted
as a matter of priority.
20 hour limit
Conclusion
The Committee considers that the 20 hour limit is adequate to meet
the needs of families for non-work related care. Provisions are in place
to exempt families in crisis situations and families with a child who
has a disability from the limit. The concerns raised about the needs of
disadvantaged children are discussed in Chapter 5.
Recommendation 6: The Committee recommends that the 20 hour limit
continue, providing that the current provisions to exempt families in
crisis situations and families with a child who has a disability from
the limit remain in place.
Indicators of the impact of changes on long day care centres
Conclusion
The evidence presented to the Committee indicates that the child care
industry is going through a period of great change. Both community-based
and private long day care centres are faced with increasing costs, falling
utilisation rates and, in some cases, such a decline in viability that
centres must close.
The Committee considers that there are a number of variables interacting
in a complex way within the industry. These variables include some that
are the direct outcome of Government changes: the abolition of the operational
subsidy for the community-based sector; the 50 hour limit and changes
that impact on families' ability to pay for formal child care. However,
there are other variables that have emerged over time as influencing factors,
these include the decrease in the number of children in the target age
group of 0-4 years and rapid growth of the private sector since 1991 which
had resulted in oversupply of child care places in many areas. It should
also not be forgotten that long day care centres operate under State regulations
which may result in cost increases. Centres also face other cost imposts
through wage rises, employee costs such as worker's compensation, insurance,
council rates etc. Shifts in parents' choice of care will also have an
impact. All these elements must be factored into any analysis.
The Committee concludes that oversupply of places is a significant factor
influencing the industry at the moment. The National Planning System will
assist decision making in the future to ensure the growth of a viable
child care industry. However, in the interim there will be continued rationalisation
in the industry.
The Committee was concerned that evidence pointed to centres in low income
areas as being the most affected by low utilisation rates and closures.
The Department did not supply the Committee with any information in this
regard and the Committee is wary of drawing a conclusion based on this
anecdotal evidence. However, the Committee has made comments and recommendations
concerning the special needs of low income families in Chapter 5.
With regard to quality, the Committee heard evidence that the changes
to child care funding have impacted adversely on the quality of care being
offered. There were also a number of comments comparing the quality of
care offered by the community-based sector and the private sector. The
Committee notes that the accreditation levels in both sectors are similar,
around 90 per cent. Thus, the Committee does not believe that there
is a major difference in the quality of care offered by both sectors in
meeting accreditation standards.
Concerns about decreases in quality covered two areas: the staff/child
ratio and loss of additional services. Many witnesses noted that the changes
had resulted in changes to the staff/child ratio and the ratio of experienced
to non-experienced or untrained staff. The Committee notes that the Department's
evidence on this matter is at odds with the evidence received from other
witnesses. The Committee considers that this may be another instance where
the Department's data may not reflect a change that has recently occurred
in the industry. However, while it is generally accepted that the staff/child
ratio is a significant indicator of quality of care, the Committee did
not receive any evidence that centres were not maintaining the prescribed
ratio and were therefore breaching licensing regulations. Centres did
however indicate that they had lost staff in excess of the regulated requirements.
They viewed this as a significant decrease in quality of care provided,
particularly as the prescribed ratio was believed to be inadequate.
The other issue raised in relation to the quality of care was the loss
of additional services such as nappy services and the provision of some
meals and snacks by the centres. The Committee does not agree that the
loss of these services constitutes a decline in the overall quality of
care. While the provision of these services is an added convenience to
parents, they are also an added cost for centres.
Finally, in relation to the Department's analysis of the impact of changes
taking place in the child care industry, the Committee acknowledges that
there are complex relationships within the sector. However, the Department's
understanding of the impact that the measures are having on the industry
appears questionable. In Estimates in June 1998, the Department stated
that the sector had gone from `a boom sector where people could see that
they could come in and invest, to being a sector where there were some
measures to be introduced, the impact of which was difficult to predict'.
[1] The Department's data collection and analysis
appear to have contributed in part to difficulties in predicting outcomes
and in supplying up-to-date information to monitor the changes taking
place. The Committee notes that the Department has sought to improve its
data collection and to speed its analysis.
Out of school hours care
Conclusion
The changes to the OSHC sector are still in their early stages and services
are continuing to adjust to major changes in arrangements. The Committee
is concerned that so many OSHC services have closed since December 1997
and that some witnesses predicted further closures before the end of 1998.
While the Department has assured the Committee that the new arrangements
do increase affordability of OSHC services, the anecdotal evidence and
number of closures appear to contradict the Department's stand.
The Committee considers that OSHC services are disadvantaged by the introduction
of the Childcare Assistance only model of funding. The majority of OSHC
services do not have full-time staff or permanent offices and are run
on a very small budget. While the Childcare Assistance arrangements work
well for pre-school age care where attendance patterns are stable, OSHC
services are characterised by fluctuating utilisation which reflect the
attendance patterns of school-aged children.
A further matter of concern was the number of changes to administrative
arrangements that the OSHC sector is required to deal with. OSHC services
must now complete paperwork for each component of a service: before school
care, after school care and vacation care. Many services must purchase
computerised management systems to undertake the administrative tasks
required. This situation has been exacerbated by changes to implementation
dates and changes to agencies involved. The Committee considers that the
implementation of the changes to the OSHC sector could have been handled
in a more efficient manner, taking into greater account the magnitude
of the changes the sector faced. The Committee considers that further
funding for administration of services is required to meet the particular
circumstances of OSHC services.
The Committee considers that OSHC services should have greater access
to school facilities. This would ensure that high cost facilities provided
for the community by the taxpayer are used to a greater extent for the
benefit of the community and children. In some instances OSHC services
may have to be amalgamated or situated at a school central to the area
to ensure their continued viability. This would require children to travel
from schools to the service. The Committee considers that funding should
be provided to ensure that the cost of travel is not an increased burden
on families.
In evidence, the problem of differing access to the Childcare Assistance
was raised. The Department responded to concerns by stating that OSHC
services were not treated differently as for all service types Childcare
Assistance is calculated taking into account the number of children in
the family using a particular service type. The Committee is satisfied
that families using OSHC are not treated differently to those using other
services. However, the Committee considers that the response from the
Department highlights an anomaly in the provision of Childcare Assistance:
that families with more than one child, using a combination of types of
care, are treated differently from families using only one type of care.
The Committee considers that the justification for not taking into account
all service types used by a family in calculating Childcare Assistance
should be investigated further.
Recommendation 7: The Committee recommends that:
- the Commonwealth provide all stand alone OSHC services with a payment
to cover the costs of increased administration at the beginning of each
school year;
- where OSHC services amalgamate or are established in a school central
to an area to ensure future viability, funding for travel between schools
and services be provided if suitable transport arrangements already
exist. If no suitable travel arrangements are available, capital grants
be made available so that OSHC services may operate their own transport;
- the Commonwealth seek the assistance of the States and Territories
to ensure that OSHC services maintain access to school premises free
of charge or at a low or nominal fee; and
- the Department of Family and Community Services address the apparent
anomaly whereby Childcare Assistance is provided on a different basis
for families using more than one type of care.
Vacation care
Conclusion
The Committee considers that vacation care services face similar problems
to OSHC services regarding administrative costs and fluctuating attendance.
The Committee considers that additional funding for administrative costs
should be extended to vacation care services.
Family day care
Conclusion
The Committee concludes that FDC offers an important additional choice
for families seeking care for their children. It offers flexible, affordable
and quality care for those with special needs such as shift workers and
for those requiring overnight and respite care. FDC is particularly important
in rural and remote Australia. The Committee considers that the operational
subsidy is a fundamental element of the FDC system and that no changes
should be made to this arrangement.
Recommendation 8: The Committee recommends that given the important
role played by Family Day Care (FDC) in providing alternative care options
for families, the current arrangements for the provision of an operational
subsidy for FDC should continue.
Chapter 5 - Impact of Child Care Funding Changes on Families and
Children
Impact on families
Conclusion
Government assistance provided through child care funding assists parents
to more easily meet the costs of child care and is directed to a greater
degree to those on the lowest incomes. However, the question arises as
to whether this assistance is provided at a level which is effective in
ensuring that those seeking care can access it, particularly low-income
earners. And if not, what level of affordability should Government support
and what mechanisms should be used to deliver increased affordability.
The Committee received extensive anecdotal evidence that affordability
of child care has declined. Witnesses pointed to decreased utilisation
of child care services as the result of the compound effect of increased
gap fees, freezing of the Childcare Assistance ceiling, and other changes
such as the abolition of the $30 deductibility for other children.
This evidence was supported by analysis by the Brotherhood of St Laurence
which looked at such indicators as trends in average fees, gap fees and
government support in relation to inflation. The Brotherhood suggested
that to restore affordability to 1992 levels for low income families Childcare
Assistance would have to be increased to $105 per week.
The Department provided the Committee with evidence of the level of assistance
provided by the current arrangements and its impact on disposable income
(see Tables 5.2, 5.3). However, the Department was unable to provide similar
information over an extended time period. Thus, while the Committee could
identify the level of benefit accruing under the current arrangements
it could not identify trends in the degree of assistance over time in
relation to disposable income: whether it had decreased, remained the
same or improved. To have had this information would have been of great
assistance to the Committee's deliberations.
The Committee considers that while Government assistance has not increased
at the same rate as increases in child care costs for families, the impact
on affordability has varied across income ranges. The Committee considers
that there has been minimal impact on affordability of child care for
high income earners. In relation to changes to affordability for middle-income
earners, the Committee received much contradictory anecdotal evidence.
The Committee therefore was unable gain a clear impression of the impact
on affordability of child care for middle-income families but it would
appear, for the moment at least, middle-income earners are able to access
child care without too much economic difficulty. However, the Committee
considers that there has been a much more significant decline in affordability
for low income families, which is having an adverse impact on their ability
to access formal child care. The impact has been felt most by families
with more than one child.
The Committee has considered the suggestions for an increase in the fee
ceiling and concludes that an increase in the child care ceiling may lead
to price increases across the sector, thereby further diminishing affordability
for low-income families. However, the Committee considers that there is
need to further assist low income families to access child care by increasing
the level of assistance provided through the introduction of a `top up'
or `supplement' to Childcare Assistance for these families. In particular,
the Committee considers that low-income families with more than one child
should receive additional assistance.
Recommendation 9: The Committee recommends that urgent action be taken
to better target child care assistance to low income families, particularly
those with more than one child, by the introduction of a `top up' or `supplement'
to the current rate of Childcare Assistance.
Recommendation 10: The Committee also recommends that the Department
Family and Community Services conduct research to establish criteria to
judge affordability levels for families accessing child care as a matter
of priority.
Impact on children
Conclusion
The Committee considers that the impact on children of changes to child
care funding has not been adequately assessed, in particular any changes
to quality of care. The Committee notes that quality of care is maintained
through the Quality Improvement and Accreditation System (QIAS) and State
and Territory licensing requirements. The Committee strongly supports
QIAS. The system has been a major factor contributing to improved quality
of child care. At present the Child Care Advisory Council is undertaking
a review of QIAS (see para 4.104). The Committee considers that the quality
aspects of child care and their impact on children in care are important
issues during this time of rapid change in the sector and that the review
should be completed as a matter of priority.
In relation to informal care, the Committee recognises that informal
care will always be the most favoured option for many parents. For example,
families with very young children often prefer their children to be cared
for by a person they know, a relative or friend, in an informal setting.
However, the Committee also notes that informal care, by its nature, is
largely unregulated and that in some instances it may not provide the
same benefits and protection as formal care for children and their families.
The Committee notes that legislation has been drafted in Queensland to
regulate informal care and set standards for informal home-based care.
While informal care will be the preferred option for many families, there
are other families for whom informal care is not the preferred option
but who appear to have been forced to choose informal care because of
affordability and access issues. The Committee also considers that formal
child care should be available and affordable for those who wish to place
their children in this type of care.
Recommendation 11: The Committee recommends that the review of the
Quality Improvement and Accreditation System being undertaken by the Child
Care Advisory Council be completed as a matter of priority.
Families in rural and remote areas and disadvantaged families
Conclusion
The Committee notes that the Commonwealth has provided additional funding
assistance for community-based services in rural and remote areas and
those services with a large Aboriginal and Torres Strait Islander population
through the Disadvantaged Area Subsidy. Recurrent grants have been made
to OSHC services, for example the Salvation Army centre at Macquarie Fields,
which provide a unique service such as care for disadvantaged groups.
Exemptions to the 20 hour limit are also available and these have been
provided to a number of centres in rural and remote Australia.
However, the Committee considers that in addition to increased support
for low-income families already recommended by the Committee, see paragraph
5.43, there is a need for further assistance for disadvantaged families
living in urban areas. The Committee believes that the range of services
to which the Disadvantaged Area Subsidy applies is too restrictive. While
some centres in urban areas have received DAS funding, for example, a
centre providing the only 24 hour care service in Adelaide, the scheme
is aimed primarily at centres in rural and remote areas. Many urban centres
provide important services and benefits for particularly high-needs families.
These services are in addition to those normally provided by child care
centres and may include a strong protective element such as that provided
by the Salvation Army Centre at Macquarie Fields. The Committee considers
that this should be recognised and supported through additional funding
as are schools in disadvantaged areas.
The Committee considers that additional assistance be directed to areas
of identified social or economic disadvantage, for example areas of high
unemployment or areas where there are high levels of public housing. These
features have ramifications for community standards of living, access
to human services and costs of community infrastructure. Within these
areas, assistance should be targeted at centres where parents are particularly
socially or economically disadvantaged. These would include centres with
a high proportion of users eligible for maximum Childcare Assistance;
a high proportion of sole parents; places allocated to children deemed
to be `at risk' and children from non-English speaking backgrounds.
Recommendation 12: The Committee recommends that additional funding
be provided to centres which cater for very high needs families in socially
or economically disadvantaged urban areas.
Chapter 6 - Other Matters: Taxation Issues, Workforce Participation
And Child Care Workers
Taxation and related issues
Conclusion
The Committee notes the views expressed by several groups and individuals
during the inquiry that parents should be given the widest possible choice
to either participate in the paid workforce or remain in full-time care
of their children. It notes that a range of programs already exists, either
through the taxation or social security systems, that provide assistance
to meet this objective. The Committee acknowledges that there will be
differing views over the appropriate `mix' of support given to families
to pursue their choices in these matters.
The Committee notes the evidence received that indicates that there are
features of the tax and social security systems, and the interaction of
these systems, that may mitigate against parents' choices, and believes
that the relationship between various Government assistance programs and
the taxation system should be closely monitored to ensure that there is
a balance between targeting assistance and encouraging workforce participation
and/or parenting responsibilities.
The Committee has some reservations in relation to the proposal put to
it during the inquiry for the introduction of universal child care payments
to all families with young children. These reservations relate to the
potentially significant additional budgetary costs of such a scheme given
the current budgetary constraints, and the possibility that funds would
be spread too thinly across the potential target group. The Committee
would be concerned if the introduction of universal payments led to the
situation where there were less financial resources available for low-income
families and other disadvantaged groups most in need of assistance.
Recommendation 13: The Committee recommends that the costs required
to implement any proposal to introduce universal child care payments to
all families with young children be investigated to ascertain whether
such a proposal could be at all viable.
Women's labour force participation
Conclusion
The Committee received a considerable amount of anecdotal evidence suggesting
that recent fee increases and changes in the child care sector are having
an adverse impact on women's participation in the paid workforce. Evidence
to the inquiry, including the results of several surveys, showed that
many women are withdrawing from the paid workforce or reducing their working
hours citing the increasing costs associated with child care as the major
reason.
While the published labour force data do not appear to reflect these
trends to date, the Committee believes that the full impact of the changes
has yet to be reflected in these official statistics. The Committee is
of the view that some decline in women's labour force participation rates
will become evident in official labour force data in subsequent years.
The Committee notes that some indications of this trend are already emerging
in the data on discouraged job-seekers, with some increase in the numbers
of women citing child care considerations as their principal reason for
not actively looking for work. The Committee also notes that while labour
force participation rates for women with dependents under 15 are published
monthly, only the June annual ABS survey collects information about women
with dependents aged 0-4, 5-9 and 10-14. The Committee considers that
more frequent collection of data on labour force participation rates of
women with young children would have been of benefit to the Committee's
analysis of the impact of this matter.
Impact on workers in the child care sector
Conclusion
The Committee considers that, based on the widespread anecdotal evidence
provided during the inquiry, child care workers have been detrimentally
affected by the changes which have been occurring in the child care industry.
They have suffered job losses, and reduced working hours, wages, conditions
of service and career development opportunities. They are lowly paid and
working in difficult conditions. Professional recognition should be given
to the valuable contribution provided by these workers in managing the
physical, emotional and intellectual development of children in their
care. As one submission noted, next to parents, it is with the children's
services workers that `the greatest responsibility for the care and education
of the youngest and most vulnerable members of our society rests'. [2]
Navigation: Previous Page | Index | Next Page
Footnotes
[1] Budget Estimates 1998-99, Community Affairs
Legislation Committee, Committee Estimates Hansard, 3.6.98, p.CA143.
[2] Submission No.664, p.13 (City of Darebin).