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DISSENTING REPORT BY THE AUSTRALIAN DEMOCRATS
The Democrats have a strong commitment to ensuring that all families
are able to access a full range of high quality and affordable child care
services including private and community long day care centres, occasional
care, family day care, after school hours care, vacation care, kindergarten
and pre-school. This inquiry, which was established to examine the impact
on families of changes introduced by the Coalition during its first term
and the availability and affordability of child care services, was a timely
one. The more than one thousand submissions received by the committee
and the testimony the committee heard from witnesses highlighted a number
of problems with the current approach. This inquiry has made it clear
to the Democrats that a change in policy direction in relation to child
care is urgently needed to address the negative impact the Government's
current policies are having on children, parents and childcare providers.
Child Care Under the Coalition
The most consistent claims made in the submissions and testimony given
to the Committee was that under the Howard Government the child care industry
has suffered greatly and the choices available to Australia's families
have been reduced. Many people are clearly now suffering as a result of
changes introduced during the Coalition's first term in office.
The Committee heard how changes introduced in the 1996 Budget have increased
the out of pocket cost of child care services for a large number of families.
These changes have forced a growing number of parents to turn to unregulated
backyard care or to have their children cared for by grandparents or friends.
Other parents have found they are now better off if one parent works
part-time or if one parent stays at home full time. Some single parents
have decided they are better off – once financial and emotional considerations
are taken into account – claiming social security benefits and have
consequently withdrawn from the workforce or from study altogether.
Ms Ann Quadroy from the YWCA of Australia Child Care Network explained
that it is women who are bearing the brunt of these changes:
There has been a significant shift from full-time day care to part-time
care. A 1997 survey found that 68 per cent of parents had changed their
work hours to reduce their use of paid child care and we know that it
is overwhelmingly women who are making the necessary adjustments to
their work patterns. In an effort to maintain income levels and meet
increased childcare costs, the majority of women are now juggling child
care options. They are reducing formal childcare and supplementing this
with informal, cheaper, and very often unregulated, options…The uncertainty
this brings places extreme stress on families and particularly women,
not to mention concerns surrounding quality of childcare. [1]
The Democrats recognise the pressures many families face in combining
their work and family commitments. We believe it is the role of government
to assist families by broadening the choices available to them and by
making it easier to combine parenting and professional commitments. This
has clearly not been occurring under the Coalition Government.
Long Day Care Centres
The Committee heard that many child care providers are now in crisis.
As Mr Eddy Groves, the president of the Queensland Professional Childcare
Centres Association put it: “the whole childcare industry is in disarray”
[2] Ms Susan Whitaker of the Australian Early
Childhood Association also told the Committee that “the child care
industry is in crisis”. [3]
Due to falling occupancy rates – caused by a reduction in the subsidies
payable to parents – many long day care centres have had to retrench
staff, cut specific services and in some cases close centres altogether.
Both the community and the private long day care sectors have been hard
hit.
The Commonwealth Department of Health and Family Services estimates in
its submission that 37 community based long day care centres and 68 private
child care centres had closed during 1997 [4]
The Democrats have also heard of a number of other centres – both
community and private - which have closed during 1998.
Witnesses told the Committee that many other long day care centres are
now operating at much lower occupancy rates than they are licensed for.
Ms Wendy Turner from the Queensland Child Care Coalition stated that:
Recent research has indicated a dramatic downturn in utilisation of
centre based care across Queensland…a recent survey conducted by
the Private Child Care Centres Association of Queensland and its membership
reported that utilisation had fallen up to 43 per cent. Current occupancy
levels range from 46 per cent to 90 per cent, with an average of 68
per cent. Utilisation in the community sector is also consistent with
these findings [5].
This research by the Private Child Care Centres Association of Queensland
is also borne out by a survey of the members of the Child Care Industry
Association of Queensland. This survey showed an average occupancy rate
of about 60 per cent [6] despite the fact that
studies show that the break-even occupancy point for long day care centres
is about 70 per cent [7]. This means that many
long day care centres are actually losing money by operating.
This situation is not confined to Queensland. It is one which is repeated
throughout Australia. The Democrats have visited a number of centres in
all states over the past six months which are now on the brink of no longer
being viable. A number of these centres are operating at between 40% -
70% occupancy despite being full and, in many cases, having long waiting
lists only eighteen months ago. Many centre owners have told the Democrats
that they have had to close rooms, sack staff, work up to eighty hours
per week and stop paying themselves and members of their families just
to keep their businesses afloat.
We have seen instances of centre owners who have had to sell their family
home so that they could remain in business. We have met people whose marriages
have broken down under the pressure of falling occupancy rates and we
have met others who have been forced to seek professional help for depression.
Many of these small business people have told us they are now just so
desperate to cut their losses and walk away from their businesses altogether
but cannot do so because child care centres are no longer saleable items.
Despite Government claims to the contrary, the current situation in the
childcare industry is not something which can be blamed on the failure
of the previous Labor Government to introduce an appropriate planning
mechanism for long day care places alone. Although the lack of planning
until recently has doubtlessly contributed to the current situation, it
is important to note that many of the centres now experiencing low levels
of utilisation were operating at capacity or close to capacity prior to
the introduction of the 1996 Budget measures despite oversupply in many
areas.
The experiences of Mrs Miller who operates a long day care centre on
the edges of Perth are typical of those of many other child care centre
owners throughout the country:
We were always a completely full centre until around 1996. By `completely
full' I mean more than 100 per cent because we had changeover of children
at lunchtime. We never had any funding problems whatsoever…We have
had to make a lot of changes because we have suffered from low utilisation.
We went down last year, 1997, to 66 per cent utilisation [8].
Many of the problems now being experienced by community and private child
care centres are the result of the following changes introduced in the
1996 Budget:
- the capping of Childcare Assistance at 50 hours per week;
- the abolition of additional income for dependent children when assessing
a families eligibility for Childcare Assistance; and
- the freezing of Childcare Assistance and the Childcare Rebate from
indexation for 2 years.
For the community sector the effect of these changes has been exacerbated
by the challenges associated with adjusting to functioning without operational
subsidies.
During the course of the inquiry a number of witnesses suggested that
the standard of care offered by the community sector is of a higher quality
than that offered by the private sector. The Democrats reject these claims
outright. With both the community sector and the private sector subject
to the same accreditation process, the Democrats recognise that any claims
that the care offered by the private sector is substandard are completely
without foundation.
The Democrats are, however, extremely concerned about the way this Government's
child care policies are impacting on the many small business operators
who own and operate private long day care centres.
Not only has the Howard Government failed families when it comes to child
care but it has also failed small business operators despite the Coalition's
stated `commitment' to small business going into the 1996 election. For
private child care operators, this `commitment' now has a very hollow
ring.
The Government's Response
The Government has largely refused to acknowledge the way its policies
have affected the community and private long day care sectors. It has,
instead, chosen to blame the current problems on the former Labor Government's
failure to introduce appropriate planning mechanisms and the uncontrolled
growth of centres which occurred as a consequence.
As the Department told the Committee:
What we have found is that the closures are resulting from the oversupply
situation. More often than not they are closing in areas of oversupply.
Basically it is market forces coming into play [9].
Claims that oversupply have contributed to the current crisis
in child care are, of course, supported by the Democrats. We had long
called on the former Labor Government to introduce appropriate planning
mechanisms for long day care places but to no avail. The Democrats therefore
support the planning measures introduced by the current Government and
we wish to see them continue.
However, while the unrestrained growth of long day care places has doubtlessly
contributed to the current problems centres now face, this is by no means
the main cause. We are convinced that the current situation has been primarily
caused by the changes introduced in the 1996 Budget.
Based on the evidence given to the Committee and the crisis in the child
care industry the Democrats have seen on visiting child care centres throughout
Australia, we are left with no alternative but to agree with the majority
report when it says that “the Department's understanding of the impact
the measures are having on the industry appears questionable [10]”.
Family Day Care
The Democrats recognise the important service that family day care provides
for families who wish to have their children cared for in a homebased
environment.
We recognise the fact that family day care bears no resemblance to informal,
regulated care.
We understand the crucial role operational subsidies play in maintaining
quality control for family day care services as these are used to fund
the operation of Family Day Care Co-ordination Units which recruit, select,
train, monitor and support family day care carers.
The Democrats are committed to the continuation of operational subsidies
for family day care because of the important role they play in ensuring
high-quality care. We also support the continued development of an accreditation
system for the family day care sector of which the first stage has already
been completed.
Changes introduced in the 1996 Budget, while not affecting family day
care services to the same extent as long day care services, have led to
a small reduction in occupancy rates for some carers.
Few of the children now no longer attending long day care centres have
transferred to the family day care sector. This is yet further evidence
that many families previously using formal child care services are now
using informal backyard care, or leaving their children with friends,
grandparents, at home alone or with older siblings.
Out of School Hours Care
Many Out of School Hours services have also been affected by changes
introduced by the Howard Government with 66 Out of School Hours Care services
closing prior to May this year [11] excluding
those centres which have closed in Western Australia and the Northern
Territory [12].
While the introduction of Childcare Assistance for outside school hours
services has been a positive and long overdue development, the sudden
removal of operational subsidies for these services has meant that fees
have had to rise by 20-50% [13].
The removal of operational subsidies has particularly affected this sector
because of the flexible nature of the care these services provide with
children only requiring part-time and often irregular care.
There is currently some discrepancy between the level of Childcare Assistance
payable to families using outside school hours services and those placing
school age children in family day care services. The Democrats support
raising the level of Childcare Assistance for outside school hours services
so that it is in line with that paid to families using family day care
services.
As fees have risen, a number of families have found that the increase
in fees has not been offset by Childcare Assistance and have consequently
withdrawn their children leaving them to play unsupervised in school playgrounds
or to play at home alone.
The Democrats believe that these problems could have been minimised by
withdrawing operational subsidies gradually over an extended period or
by introducing some kind of safety net funding which recognises the flexible
nature of the care out of school hours care services offer.
Unregulated, Backyard Care
A number of witnesses told the Committee that formal child care and the
safety of Australia's children is at risk because of the rapid growth
in unregulated backyard care. As Ms Judith Atkinson from the Australian
Federation of Child Care Associations put it:
Reports from all our state associations are that services are experiencing
low utilisation and difficulty remaining viable. Australian Bureau of
Statistics figures show that participation of women in the workforce
is stable. The Australian Federation of Child Care Associations therefore
raises the concern: where are the children going if they are not using
formal child care or family day care? If they are turning to unregulated,
informal backyard care how is government going to be able to ensure
child protection and safety [14]?
While the Government has said that it supports all families' child care
choices, the Democrats believe it is crucial to differentiate between
children who are cared for by trusted relatives or friends and those who
are being cared for by carers who are completely unchecked and unregulated.
We stringently oppose the continued growth of the latter form of unregulated,
backyard care. This practice must be stopped as soon as possible both
to protect the safety of Australia's children and to ensure that there
is a viable future for high-quality, formal child care in this country.
At the moment those offering unregulated backyard care can register as
being eligible for the Childcare Rebate. This means that parents using
these services can claim Childcare Rebate to offset their fees. Yet these
informal, backyard carers are not subject to any character checks, safety
checks or any other form of quality control. This practise, which was
introduced by the previous Labor Government and has been supported by
the present Government, must cease.
As Ms Paterson told the Committee:
The second alternative is people using backyard care, which the federal
government appears to me to support by the Medicare cash rebate. Anyone
that is registered with Medicare by providing a tax file number can
have a parent use that service and get a rebate, and they undercut licensed
qualified care significantly, and there is no regulation accreditation
or standards…I am told of, and I know of, services that have in
excess of 20, and even up to 40, children in a single house [15]
The Democrats support the removal of Childcare Rebate eligibility for
those providing informal, backyard child care as a priority.
Recommendations
Unless steps are taken urgently to make formal child care services viable
again and to stamp out the growth of unregulated, backyard care, the high
standard of child care we have worked so hard to achieve in this country
will inevitably be changed for the worst.
The Democrats recommend the following changes to the current approach
to childcare:
- immediately raise the level of Childcare Assistance available to families
from $2.30 to $2.70 per hour;
- increase the Childcare Assistance ceiling for out of school hours
care services so that it is in line with that which is paid to families
using similar services through family day care;
- increase the 20 hour limit on non-work related care to three full
days of care;
- remove the 50 hour cap on Childcare Assistance for work related
care;
- remove Childcare Rebate eligibility for those providing informal,
unregulated backyard child care; and
- continue with the current arrangements for the provision of operational
subsidies for family day care services.
Senator Andrew Bartlett
(AD, Queensland)
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Footnotes
[1] Ms Ann Quadroy, YWCA of Australia Child
Care Network, Committee Hearing, Canberra, 25th May 1998, CA 482.
[2] Mr Eddy Groves, Queensland Professional
Childcare Centres Association, Committee Hearing, Brisbane, 16th June
1998, CA 527.
[3] Ms Susan Whitaker, Australian Early Childhood
Association, Committee Hearing, Brisbane, 16th June 1998, CA 568
[4] Submission, Department of Health and Family
Services, page 22.
[5] Ms Wendy Turner, Queensland Child Care
Coalition, Committee Hearing, Brisbane, 16th June 1998, CA 534.
[6] Mrs Gwynneth Bridge, Child Care Industry
Association of Queensland, Committee Hearing, Brisbane, 16th June 1998,
CA 583.
[7] Mr Kevin Stapleton, Child Care Industry
Association of Queensland, Brisbane, June 16th 1998, CA 583.
[8] Mrs Angela Miller, Coordinator, South
Lake Child Care Centre, Perth, 30th April 1998, CA 435.
[9] Committee Hansard, 25.6.98, p. 635.
[10] Majority Report, Community Affairs References
Committee, Child-care Funding 1998, p.5.
[11] Submission, National Out of School Hours
Association, p.2.
[12] Ms Robyn Monro Miller, Committee Hansard,
25th May 1998, CA476.
[13] Submission, National Out of School Hours
Association, p.3.
[14] Ms Judith Atkinson, Committee Hansard,
25th May 1998, p.CA471.
[15] Ms Danielle Paterson, Committee Hansard,
CA p.524.