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Chapter 2 - The Commonwealth Government and Child Care
2.1 The Commonwealth Government expenditure on child care services was
$1.1 billion in 1996-97 and is expected to reach $1.2 billion in
2000-01. [1] This Chapter discusses the reasons
for government involvement in the provision of child care and looks at
the development of child care policies since 1972 when the Commonwealth
formally entered the child care field with the passage of the Child
Care Act 1972.
The role of government in the provision of child care
2.2 In its final report, the Economic Planning Advisory Commission (EPAC)
Task Force on Future Child Care Provision in Australia discussed principles
and objectives for child care policy and the reasons for government involvement.
EPAC noted that there were both equity and efficiency reasons for not
leaving market forces to determine child care outcomes:
- Inequities in market-driven child care: The Task Force viewed
paid child care in a similar light to health and education. It considered
that those on lower income should not be denied access because of inability
to pay. Government assistance would ensure access to affordable child
care and allow parents to participate in the work force. Parents unable
to access child care would not only suffer economic disadvantage, but
would also be denied social and personal benefits that participation
in the work force brings. The Task Force also stated that lack of access
to affordable child care would most likely disadvantage women, at least
in the foreseeable future.
- Market inefficiencies and child care: The Task Force found
that child care has several characteristics that could lead to inefficient
outcomes in the absence of government intervention. These included information
problems with parents unable to be fully informed about the options
available to them and not having access to sufficient information for
individual satisfaction. Quality child care may also deliver benefits
to the community through the promotion of early childhood development
and socialisation. The Task Force also noted that there were arguments
for government financial support for child care that reflect linkages
between child care and other government policies, for example, formal
child care encourages parents to quickly re-enter the workforce and
thereby minimises the depreciation on previous public investment in
education and training. [2]
2.3 Other researchers have cited reasons for government involvement in
determining child care arrangements. One reason is that since society
subsidises education, a person will not adequately estimate the full extent
of their investment in labour market skills and will therefore undervalue
the cost on leaving the labour market. Further, the differential taxation
treatment of market provided versus parental care may distort the price
signals that influence the use of child care. Subsidised market child
care should offset some of these distortions. [3]
2.4 The Brotherhood of St Laurence's report on affordability of child
care listed a number of arguments which favour government support of child
care:
- improving horizontal equity by smoothing expenditure across the life
cycle through assistance to families when costs are high in relation
to income;
- helping mothers maintain their workforce participation which is both
a matter of gender equity and economic efficiency;
- reducing the opportunity costs of bearing children and thereby improving
long-term social sustainability;
- offering developmental benefits to children from particularly difficult
or disadvantaged backgrounds who might otherwise not reach their full
potential;
- providing a positive element in a social protection matrix helping
to prevent poverty and ameliorate it;
- improving vertical equity which is conditionally redistributive and
which supports the efforts of low income families who are taking measures
which will benefit themselves in the long run; and
- assisting child protection `both because quality mainstream children's
services offer a preventative alternative to more intrusive forms of
protective services…and because they can be an element in more
structured or intensive family support services'. [4]
2.5 It has also been pointed out that government involvement in the provision
of child care may have fiscal benefits if increased income taxation revenue
and reduced welfare payments exceed the cost of the government's contribution
to child care. In 1994, the Australian National Audit Office reported
that:
The costs to the Commonwealth of work-force-related care are substantial,
but the break-even point where tax revenue and social security savings
equal this cost in all cases comes well below average weekly earnings.
Where care is full-time, the Commonwealth breaks even when the single
parent of one child earns $208.88 per week, or when the single parent
of two children earns $376.21 per week. The Commonwealth breaks even when
a worker on Average Weekly Earnings and with one child in full-time care
has a spouse who returns to work and earns $182.72 per week, or with two
children earns $375.65 per week. Where a middle income breadwinner earns
$20,000 above Average Weekly Earnings, the Commonwealth breaks even when
the spouse with one child in full-time care earns $42.33 per week or with
two children earns $172.04 per week. Where only part-time care is required
to earn these weekly wages, the break-even point for the Commonwealth
drops again. [5]
Commonwealth Government funding of child care
The McMahon Government - 1972
2.6 The Commonwealth Government's involvement in the funding of child
care dates from 1972 with the passage of the Child Care Act 1972.
The legislation arose from investigations conducted by the Department
of Labour and National Service into the problems of child day care and
reflected `the Government's recognition of the rapidly increasing proportion
of married women in the labour force and the consequences of this phenomenon
for the care of their children'. The Commonwealth aimed to ensure `sufficient
good quality child care facilities in the community for the proper care
and development of pre-school aged children' and at a cost that was not
`prohibitive to parents, especially to parents of children in special
need'. Children in special need included those from one-parent families,
newly arrived migrants, low-income groups generally and families where
one of the parents was sick or incapacitated. [6]
2.7 The legislation provided funding ($6.5 million in the first year)
for capital grants, recurrent grants for qualified staff and for children
in special need and grants for research and evaluation of matters relating
to child care. The funding was restricted to non-profit organisations,
including local government bodies, which operated centre-based day care
for children of working and sick parents and which gave priority for the
admission of children in special need. Centres were required to operate
for at least 48 weeks per year and be open for at least eight hours every
working day.
The Whitlam Government – 1972-1975
2.8 With the election of the Whitlam Government, responsibility for the
administration of the Child Care Act was moved to the Department of Education.
A Child Care Standards Committee to oversee grants under the Act, a Child
Care Research Committee and an Australian Pre-Schools Committee were appointed.
The Pre-Schools Committee was required to report to the Government on
the measures that would ensure that all children throughout Australia
would be able to access pre-school education and that the children of
working parents and underprivileged parents would have access to child
care centres. The report, tabled in Parliament in late 1973, was widely
criticised as being out of touch with community attitudes, for its emphasis
on the employment of staff with special training in early childhood education
and its recommendations for the extension of the traditional pre-school
model which failed to address the problems of women in paid employment.
[7] Further, by the time the Committee reported,
ALP policy on child care had shifted from the limited goal of providing
an educational service, i.e. pre-school education for every child, to
the establishment of a comprehensive child care service throughout Australia
on a priority needs basis. [8] As a result,
the Government requested that the Social Welfare Commission and the Priorities
Review Staff prepare a new set of proposals for early childhood services.
2.9 The Social Welfare Commission's report, Project Care, was
presented in July 1974 and recommended that the Government sponsor a range
of early childhood services including pre-school, day care, family day
care, play groups and toddlers groups, babysitting clubs and support services
for private minders. It also recommended that funds be allocated according
to local government areas with areas being ranked on the basis of a number
of factors including the level of unemployment and proportion of public
housing. The Government's Priorities Review Staff report endorsed the
broad outline of the Commission's report and suggested that Government
adopt the report in principle. [9]
2.10 While the new policy proposals were being formulated, the Commonwealth
continued to support child care services through the Child Care Act. In
the 1973-74 Budget, the Interim Pre-School and Child Care Program was
allocated $8 million to existing programs under the Child Care Act and
$10 million was allocated as the interim measure for pre-school education.
In the July 1974 mini-budget, funding of $34 million was allocated to
child care programs. Following intensive lobbying, this was increased
to $75 million in the August 1974 budget.
2.11 In September 1974, the Whitlam Government announced its intention
to establish an independent Children's Commission which would have the
major carriage of policy-making, funding and administrative tasks for
Commonwealth children's services. The proposed programs were to be flexible,
community based and integrated and the rigid distinction between educating
children and caring for them was no longer to be made. The then Special
Minister for State stated that by 1980 `all children in Australia [will]
have access to services designed to take care of their physical, social
and recreational needs'. [10] This announcement,
it has been noted:
represented a major philosophical departure. Not only was there to
be a greatly expanded role for the Commonwealth in funding child care
services of all types (cutting across the traditional divide between
education and care services), but subsidised child care was being presented
to the community as a normal part of community infrastructure, not as
a welfare service. [11]
2.12 An Interim Committee for the Children's Commission was established
to sponsor and promote the development of a wide range of children's services
including early childhood education, full day care, family day care, play
groups, occasional care, out of school hours care, emergency care and
other services deemed necessary or desirable. The Interim Committee also
examined the means of establishing the relative needs of communities throughout
Australia and a rating system through which funds could be disbursed to
the most needy communities.
2.13 The legislation for the establishment of the Children's Commission
was passed in June 1975. The Act was not proclaimed before the dismissal
of the Whitlam Government at the end of 1975. During its period of establishment,
the Interim Committee had not been overly successful in diversifying the
children's services with the distribution of funding during 1974-75 having
gone predominantly to pre-schools (82 per cent), and day care centres,
family day care, holiday and out of school hours care and other services
receiving a much smaller proportion. This reflected the ability of State
governments and the long established preschool organisations to make submissions
to the Commonwealth while the new parents groups attempted to organise
their approach. [12]
The Fraser Government – 1975-1983
2.14 The new Coalition Government did not proceed with the establishment
of the Children's Commission, rather an Office of Child Care was established
within the Department of Social Security. In announcing the establishment
of the Office of Child Care, the then Prime Minister, Malcolm Fraser,
stated that under the previous government approximately 75 per cent
of expenditure on children's services had gone to the pre-school sector
but that:
The philosophy of the Government in relation to child care will be
to see that the funds which the Commonwealth makes available provide
facilities for child care for those who need it, especially for single
parent families…[The Children's Commission] Act tends not to meet
the major objective, as we believe it should be, which is to establish
opportunities for child care in areas of need and areas of particular
hardship. [13]
This change has been seen as `a distinct ideological and political change
from the previous government's approach' and its restriction to `the needy'
was seen as being `at odds' with the universalist view of the Whitlam
Government. [14]
2.15 In 1976 the Commonwealth ceased to fund individual pre-schools directly
and introduced a fixed annual block grant to each State and Territory.
As a result of this change, there was a significant increase in the proportion
of all Commonwealth expenditure on children's services which was allocated
to other types of services, particularly family day schemes.
2.16 Between 1976 and 1980 total Commonwealth expenditure on children's
services declined. [15] As well, the funds
allocated to the Children's Services Program were more widely spread with
programs such as Family Support Services, the Youth Services Scheme and
Services for Disabled Children being funded out of the Program. The major
part of recurrent subsidies for centre-based care was directed to salary
subsidies, primarily to ensure that centres employed some staff with appropriate
qualifications and therefore maintained quality of care. Some assistance
was provided to low-income families, but the level of this assistance
was limited and the responsibility for distribution was left to the discretion
of centre managers. [16]
2.17 Following the 1980 Federal election and the return of the Coalition
Government, the Review of Commonwealth Government Functions was established.
Extensive lobbying by supporters of publicly-funded child care, child
care workers and academics resulted in child care services being untouched
by the Review. However, a committee (the Spender Committee) was established
to review the whole program, including its policy and administration,
and to make recommendations with a view to restriction of government subsidies
to the needy, avoidance of overlap with the State governments and the
private sector, and containment of government expenditure. [17]
2.18 The review of the Children's Services Program recommended that the
Commonwealth retain responsibility for the program and that its control
over various aspects of the program be strengthened for example by direct
Commonwealth funding of out of school hours care, vacation care and child
care in women's refuges. It was also recommended that 75 per cent
of funds within the program should be allocated to `mainstream' projects
ie centre-based and family day care services, out of school hours care
and vacation programs. Expansion of the program through family day care
services was supported.
2.19 The review also recommended that recurrent subsidies go to centres
as fee relief, related to parent's income, rather than as salary subsidies.
In addition, it recommended that parents should make a significant contribution
towards the costs of services, according to their means. Further, it was
suggested that users of commercial child care centres be subsidised. [18]
2.20 The Commonwealth did not implement full cost recovery but did implement
the formula for measuring families in `need'. At about the same time,
the mechanisms by which the Commonwealth allocated funding to community
groups came under close and critical scrutiny. It had been the practice
since the Whitlam Government to rely solely on the basis of submissions
from community groups for the allocation of funds. Research indicated
that this resulted in inequitable distributions with those groups with
the most time, resources and knowledge of the public sector attracting
more funds than disadvantaged groups such as low income families, sole
parents and migrants. [19]
The Hawke/Keating Governments – 1983-1996
2.21 With the election of the Hawke Labor Government in 1983, child care
policy was refocused:
Under the Hawke government child care policy began to be considered
in relation to the broader policies and concerns, particularly labour
market and social security policies. This represented an important change.
No longer was child care an isolated policy issue of interest mainly
to feminists on the one hand and traditional early childhood organisations
on the other. Instead it was becoming integral to a number of the government's
social and economic policies and of interest to a far broader range
of community groups, trade unions, policy makers and government ministers
than ever before. [20]
2.22 The Hawke Government sought to expand child care services. It abolished
the submission-based approach and introduced an needs-based planning approach
to funding child care services. It also sought to coordinate Commonwealth,
State and local governments to provide child care in areas in most need.
Need was defined as areas of relatively large numbers of pre-school age
children with working parents, few long day care places and relatively
low-income status. Priority access was given to the children of working
parents, to children of parents with a continuing disability or children
at risk of abuse and neglect. Priority was also given to sole parents
who were at home or a couple where one parent was at home with more than
one pre-school age child. There was no direct attempt to link child care
planning to labour market needs. However, the New South Wales planning
committee attempted to develop new services that were work-related: the
committee presented two lists of priority needs to the Minister - one
that was for general community-based services and the other for work-related
care. [21]
2.23 The Commonwealth also introduced the Supplementary Services Program
(SUPS) to help with the costs of the provision of services to children
with special needs such as children with disabilities, Aboriginal and
Torres Strait Islander children or children from diverse cultural and
linguistic backgrounds. Following the 1984 election, the Hawke Government
announced an expansion of child care places with 11,500 being for child
care centres, 4,450 for family day care and 3,000 for occasional care.
The cost equivalent of 1,000 child care places was directed to support
services, groups with special needs and outside school hours care. At
the same time, the Office of Child Care was moved to the new Department
of Community Services. This move was seen as `helping to consolidate the
image of child care as a normal social service, not something reserved
for those who could prove their “neediness” or inability to
cope'. [22]
2.24 In the May 1985 mini budget it was announced that the children's
services budget would be reduced with the complete withdrawal of the block
grant for pre-schools and a reduction in expenditure on child care subsidies
for 1985-86. Although the Government was lobbied over this reduction,
the Minister for Community Services noted that there were major inequities
and a shortage of children's services with only 7 per cent of children
having access to child care. Further, in order to continue the expansion
of services and to provide a more equitable system changes to the fee
subsidy arrangements were required. [23]
2.25 In 1986, changes were introduced in the method of providing a general
subsidy for child care costs. A new system of per capita subsidy for each
child care place within a centre, instead of the staff salary subsidy,
was introduced. It was argued that as most States and Territories, which
were responsible for regulating child care, had in place sufficient regulations
to ensure that good quality care was provided, a salary subsidy was no
longer necessary. This resulted in most centres (ie community-based centres)
losing about 50 per cent in their operational assistance grants and subsequently
fee increases were common. At the same time, eligibility for fee relief
for parents was extended considerably with those on joint incomes of up
to $34,000 being eligible for some reduction in fees if one child was
in care and higher if more children were in care. Fee ceilings were also
introduced to ensure containment of costs. The result of these changes
`was to redirect funding from operational subsidies to income-related
fee relief, more effectively targeting financial assistance to low income
families'. [24]
2.26 Also in 1986, the Commonwealth announced guidelines to assist employers
to become involved in child care. Under the guidelines, private sector
employers were permitted to contribute to the building costs of non-profit
child care services and they were able to purchase up to 30 per cent of
the places in the centre and reserve these places, over an agreed period,
for their employees. This initiative was promoted by the Commonwealth
to employers as providing a means of improving employee recruitment, retention,
performance and satisfaction. While industry showed some initial interest,
most companies did not go ahead and establish child care due to complexities
and difficulties in doing so.
2.27 By the late 1980s debate within and outside government circles focused
on the provision of publicly-funded child care and the expansion of public
child care. Within the Government, the Minister for Finance, Senator Peter
Walsh, proposed a voucher system to replace operational subsidies and
expansion of the sector through private providers.
2.28 Following continued debate about the Government's child care policies,
in late 1987 the Minister for Community Services and Health commissioned
a study from the Centre for Economic Policy Research on the economic issues
surrounding publicly funded child care. The Centre's report argued that
there were major economic and social benefits from publicly funded child
care and that society as a whole had an interest in the upbringing of
children. Further, it helped to facilitate entry to the labour market
by single parents and second earners (usually women) in low-income families.
The report also stated that there was a net fiscal gain to the Commonwealth
through increased taxation revenue, savings on dependent spouse rebate
and savings on social security pensions and benefits. [25]
2.29 The Government decided to continue with the existing system, which
combined a needs-based planning approach for new places with fee relief
targeted at low income families. The 1988 Budget included the announcement
of a National Child Care Strategy. This involved the establishment of
a further 30,000 new child care places over four years through cost-sharing
arrangements with the States and Territories. The majority (20,000) of
these places were for out of school hours care and 4,000 new places in
long day care centres and 2,000 new occasional care places.
2.30 Under the Strategy, the Commonwealth again introduced a program
to encourage employer contributions to child care provision. As a result,
1,000 of the 4,000 centre-based day care places to be built were to be
set aside for employer-sponsored, work-based care. [26]
The costs of running the centres would be shared between the Commonwealth,
users and employers. The Commonwealth would provide fee relief but no
operational assistance. Parents were expected to pay fees comparable to
those charged by community-based centres thus employers were expected
to contribute an amount equal to the Commonwealth's operational assistance
grant and top up the level of fee relief. Employers were obliged to implement
the Government's guidelines on priority access but could reserve all places
for their employees. The Commonwealth also proposed that contributions
by employers would be tax deductible and employers providing child care
on their premises would be exempt from fringe benefits tax.
2.31 In 1990 the Government expanded the National Child Care Strategy
to allow for an additional 50,000 places by the end of 1996-97. Fee relief
(now known as Childcare Assistance) was also extended to users of child
care centres not receiving any capital or operational funding from the
Commonwealth on the grounds of equity between families using public and
private services. This also recognised the continuing high unmet demand
for affordable child care places to meet the work-related needs of families.
This resulted in a significant increase in long day care places. Private
services also became eligible for access to supplementary services in
the form of special workers to assist children with special needs.
2.32 The Government also announced the introduction of an accreditation
scheme of child care centres. The National Accreditation Council was established
in 1993 and a Quality Improvement and Accreditation System, aimed at improving
the quality and standard of approved child care, was introduced in 1994.
All long day care centres applying for Childcare Assistance were required,
as a condition of eligibility, to comply with standards under the System.
It has been noted that the Government, by linking fee relief to accreditation
`saw a way of ensuring “value for money” for itself and therefore
the taxpayer'. [27]
2.33 The Government also introduced the Childcare Cash Rebate to assist
eligible families with the cost of work-related child care expenses. The
Government had opposed tax rebates for work-related child care expenses
as benefiting those on higher incomes more than lower paid workers or
those looking for work. In her second reading speech on the Childcare
Rebate Bill 1993, the Minister for Family Services stated that the Rebate
`is a major plank in this government's commitment to increase the number
of child care places, to make child care more affordable and increase
the choices for Australian families…Child care is no longer a welfare
issue. It is an economic issue and is now an integral part of the government's
approach to building a highly skilled and adaptable workforce.' [28]
2.34 The Rebate was to be paid directly to families and was not means-tested.
Families with children under the age of 13 (higher in some special cases)
in work-related care at a registered service provider could receive a
Rebate. Families were required to pay the first $16 per week of the cost
of care and could then receive a Rebate of 30 per cent of care, minus
any Childcare Assistance, up to a fee ceiling of $110 per week for one
child in care (ie maximum rebate of $28.20) or $220 per week for two or
more children in care (ie maximum rebate of $61.20). The Rebate was available
to families receiving Childcare Assistance for fees paid above the $110
ceiling (minus $16 and up to a second ceiling of $110). [29]
2.35 Child care expenses incurred in care services not eligible for government
assistance were also covered by the Rebate `in recognition of the fact
that almost two-thirds of working families use these care arrangements,
either by choice or because formal care is not available'. [30]
Thus the Rebate was available for care provided by relatives, friends
etc if the provider of the care was registered for the Rebate and met
the eligibility criteria.
2.36 The Rebate was seen as recognising that child care assistance was
not a welfare measure but a work-related expense. However, it was criticised
because it was paid to all eligible families, spreading available resources
thinly across the well-off and the needy. It was also criticised as being
regressive, because `people receive the Rebate on expenses incurred after
other assistance such as fee relief has been paid. Poorer families, because
they receive fee relief, tend to have lower out of pocket expenses for
child care than higher income earners and thus receive less than the maximum
Rebate while high income earners receive the full Rebate.' [31]
2.37 In 1993 the Commonwealth, through the New Growth Strategy, made
a commitment to meet work-related demand for child care based on a target
of 354,500 places by 2001. Under the strategy the Commonwealth would provide
funds through grants and loans to local government and community organisations
to be used to increase the number of work-related child care places. Employers
were also able to access loans to provide centre-based long day care places.
Priority was to be given to providing care for under 3 year olds. [32]
2.38 In the 1995-96 Budget, the Government announced changes to the composition
of places promised under the New Growth Strategy with 4,500 community-based
long day care places to be converted to family day care places and another
500 community-based long day care places to be converted to providing
innovative services in remote areas. Additional funding was also provided
to the Supplementary Services Program.
The Howard Government – 1996-
2.39 With the election of the Howard Government in March 1996, a number
of reforms were introduced which `have emphasised moves towards a greater
reliance on means-tested childcare assistance as opposed to operational
and capital assistance as well as a greater reliance on private providers
of childcare services'. [33]
2.40 The new Government announced that a new National Planning Framework
would be developed. The Framework would address factors such as inequities
in the distribution of child care places and access to child care and
the significant growth in government expenditure on Childcare Assistance.
The Government also announced that a National Information Strategy, aimed
at ensuring all the various participants in child care in Australia were
fully informed about changes to child care provisions and related issues,
would be implemented.
2.41 The 1996-97 Budget saw the introduction of a number of major reforms:
- Cessation of operational subsidies for community-based long day care
centres (excluding occasional care, family day care, multi-functional
and multi-functional Aboriginal children's services) from 1 July
1997. This move was seen as removing inequities in Government assistance
to families using private and community-based centres. It was also envisaged
that this move would encourage community centres to be more efficient
and cost competitive with private sector centres. At the same time,
the Government announced that it would provide funding to help community
centres to restructure and obtain financial and management advice prior
to the subsidies being withdrawn. Any fee rises due to the removal of
the operational subsidies were expected to be partially offset by community
centres becoming more efficient.
- The limiting, from 1 April 1997, of Childcare Assistance to 50
hours of care per week per child. Those working families who are able
to show that they have a genuine need for care in excess of 50 hours
per week can be exempted from the limit. A saving of $30 million in
1997-98 was expected from this measure.
- Indexation of the Childcare Assistance Fee Ceiling and the Childcare
Cash Rebate Ceiling was frozen for two years. It was estimated that
as a result of this measure, there would be savings of $17.5 million
in 1997-98 and approximately $31 million in 1998-99.
- Reduction of the Childcare Cash Rebate from 30 per cent to 20 per
cent for one child families with incomes above $70,000 a year (plus
$3,000 for each other dependent child). Savings of approximately $10
million in 1997-98 and $11 million in 1998-99 were expected.
- Abolition, from 1 April 1997, of the additional income allowed
for additional dependent children under 16 when assessing eligibility
for Childcare Assistance. As a result, families are no longer able to
deduct $30 per week from their incomes for each dependent child when
assessing Childcare Assistance. This was intended to simplify the income
testing of Childcare Assistance and to align it with the income testing
of the Family Payment. Savings from this measure were expected to be
$22 million in 1997-98 and $24 million in 1998-99.
- Reduction, from 1 April 1997, of the income cut-offs with respect
to eligibility for Childcare Assistance for families with two or more
children to $74,880 for two children and $91,416 for families with three
or more children. Savings from this measure were expected to be approximately
$4 million in 1997-98 and $4.4 million in 1998-99.
- Uncommitted community-based and employer-sponsored long day care centre
places to be established under the New Growth Strategy would not proceed.
The private sector would be relied on to provide additional new centre-based
care. Capital funding of approximately $11 million would be retained
to provide additional childcare places in rural and remote areas. Expected
savings were $28.8 million in 1997-98 and $25.6 million in 1998-99.
- From 1 January 1998 Centrelink would pay both Childcare Assistance
and the Childcare Cash Rebate. [34]
2.42 A Special Needs Subsidy Scheme (SNSS) was introduced in July 1997
to assist children with severe disabilities or traumatised refugee children
to participate equally in mainstream child care programs. Funding through
SNSS provides for additional staff, advice, training and specialised resources
and/or equipment needed for children with special needs.
2.43 In the 1997-98 Budget further changes to the child care arrangements
were announced:
- From 1 January 1998, Childcare Assistance for school aged children
using child care centres and family day care services, operational subsidies
for outside school hours care services (including year round care services),
the outside school hours care rate of Childcare Assistance and (from
1 February 1998) vacation care block grant funding would be incorporated
into a new income-tested Childcare Assistance payment for school age
children. The new payment would be available to families with children
in Commonwealth-approved child care centres, family day care services
and outside school hours care services. This measure was aimed at improving
the access and affordability of low and middle income families to outside
school hours care. The expected cost of this measure is $5 million in
1997-98 and $5.1 million in 1998-99.
- From 1 January 1998 the payment of Childcare Assistance for non-work
related care would be limited to 20 hours per week. Exemptions would
be available for families in specific circumstances such as families
in crisis or children at risk of abuse and neglect. The expected savings
from this measure are $4.4 million in 1997-98, $16 million in 1998-99
and $25.4 million in 1999-2000.
- Childcare Assistance will be paid fortnightly in arrears to families
from 1 January 1999, rather than in advance to service providers.
This will bring the payment of Childcare Assistance into line with other
assistance paid by Centrelink and save $32.5 million in 1998-99 and
$3.1 million in 1999-2000.
- 2,500 additional family day care places to be provided over four years,
particularly in rural and remote areas.
- Under the National Planning System, a limit of 7,000 long day care
centre places will be eligible for Childcare Assistance per year from
27 April 1998 and the calender year 1999. This is in addition to
existing commitments for new centre places to be established within
the community sector with capital assistance under Commonwealth and
Commonwealth/State growth strategies. [35]
2.44 The above reforms were introduced through the Child Care Payments
Act 1997 with the implementation date of the reforms delayed until
27 April 1998. On 23 January 1998, the Minister for Family Services
announced that the Government had decided to defer the implementation
of the changed payments arrangements aspects of the reforms until a child
care card or similar technology was available. It was proposed that the
card be introduced in 1999 and that it would allow for the integration
of Childcare Assistance and Childcare Rebate payments by Centrelink. [36]
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Footnotes
[1] Submission No.894, Revised Appendix 2, (DHFS).
[2] Economic Planning Advisory Commission, Future
Child Care Provision in Australia, Task Force Final Report, AGPS,
November 1996, pp.29-33.
[3] Lee, J, Child Care – A Review of
the Issues, Department of Economics, University of Newcastle, Research
Report or Occasional Paper No 220, February 1996, pp.21-2.
[4] Tasker, G, & Simon, D, Is child care
affordable? Pressures on families and their use of formal long day care,
Brotherhood of St Laurence, Community Child Care, Melbourne, 1998, pp.3-4.
[5] Australian National Audit Office, Mind
the Children The Management of the Children's Services, Efficiency Audit,
Audit Report No 42, 1993-94, AGPS, p.42, also cited in Julie Lee, Child
Care – A Review of the Issues p.23.
[6] Senate Hansard, 25.10.72, Vol s.54, pp.1908,
1909.
[7] Brennan, D, The Politics of Australian
Child Care From Philanthropy to Feminism, Cambridge University Press,
Melbourne, 1994, pp.83-6.
[8] Brennan, D, Children's Services in Australia:
The State of Play: A Review of Commonwealth and State Policies, 1972-1982,
Family and Children's Services Agency, Sydney, 1982, p.5.
[9] Brennan, D, The Politics of Child Care,
pp.87-8.
[10] Ministerial Statement, 19.9.74, cited
in Brennan, Children's Services in Australia.
[11] Australian Institute of Health & Welfare,
Australia's Welfare 1993, AGPS, Canberra, pp.130-31.
[12] Brennan, D, Children's Services in
Australia , p.10.
[13] House of Representatives Hansard, 2.6.76,
Vol H of R 99, p.2797.
[14] Brennan, D, The Politics of Australian
Child Care, pp.99,100.
[15] Brennan, D, Children's Services in
Australia, p.16.
[16] Research Conference, Royal Australasian
College of Surgeons, Funding options for child care and their relation
to social justice and quality issues, 1989, p.21.
[17] Brennan, D, The Politics of Australian
Child Care, pp.108-09.
[18] Brennan, D, The Politics of Australian
Child Care, p.110, Research Conference pp.21-2.
[19] AIHW, Australia's Welfare 1993, p.131.
[20] Brennan, D, The Politics of Australian
Child Care, pp.168-69.
[21] Brennan, D, The Politics of Australian
Child Care, p.176.
[22] Brennan, D, The Politics of Australian
Child Care, p.177.
[23] Senate Hansard, 16.5.85, Vol S108, p.2069;
28.5.85, Vol S109, p.2599.
[24] AIHW, Australia's Welfare 1993,
p.131.
[25] Brennan, D, The Politics of Australian
Child Care, pp.197-99.
[26] Moyle, H, Meyer, P, Golley, L and Evans,
A, Children's services in Australia, 1996: services for children under
school age, AIHW, Children's Services Series No. 2, 1996, Canberra,
p.93.
[27] Brennan, D, The Politics of Australian
Child Care, p.202.
[28] Senate Hansard, 26.10.93, Vol S160, p.2513.
[29] Department of the Parliamentary Library,
Bills Digest, Childcare Rebate Bill 1993, p.2.
[30] Senate Hansard, 26.10.93, Vol S160, p.2513.
[31] Department of the Parliamentary Library,
Some Recent Developments in Child Care, Current Issues Brief No.6
1995-96, p.3.
[32] Moyle et al, Children's services in
Australia, 1996, p. 96.
[33] Department of the Parliamentary Library,
Childcare in Australia: current provision and recent developments,
Background Paper No.9 1997-98, p. 4.
[34] Portfolio Budget Statements, 1996-97,
Health and Family Services Portfolio, pp.178-88.
[35] Portfolio Budget Statements, 1997-98,
Health and Family Services Portfolio, pp.193-202; Submission No 894, p.8
(DHFS).
[36] Minister for Family Services, Media Release,
23.1.98.