Archives for September 2014

Make the numbers on childcare payments add up

Innovation and a reduction in red tape around the provision of flexible child care options have been called for repeatedly in submissions to the Productivity Commission’s Inquiry into Childcare and Early Childhood Learning.

This requires more complex and far-reaching policy reform than the ‘tax breaks for centre-based care and nannies’ often called for by leading business men and women. For a start the economics don’t add up.

The current child care system provides higher benefits than would treating childcare payments as a deduction, as the Child Care Rebate (CCR) is higher than the highest personal marginal rate of tax.

For example, a family with both parents working fulltime with one parent earning $120,000 and the other earning $60,000 paying child care fees of $15,000pa for one child, would receive an after tax refund of $5,850. Under the current scheme a CCR entitlement of 50% would be $7,500. This is the case up to the point where the childcare fees exceed the cap of $15,000 per child.

The CCR is also payable fortnightly to a child care centre, whereas tax deductibility would require either waiting until the end of the financial year or adjustments to PAYG deductions. This would pose a much higher financial burden on the majority of families.

So while tax deductibility might work for high income earners it does not distribute the benefits as equitably as a tiered rebate system. This should effectively rule it out as a policy option, however the broader issue of flexible and affordable child-care for the majority of working parents remains.

In its recent draft report, the Productivity Commission (the Commission) estimated that there may be up to 165 000 parents (on a full time equivalent basis) who would like to work, or work more hours, but are not able to do so because they are experiencing difficulties with the cost of, or access to, suitable childcare.

Australia is at the lower end of the OECD when it comes to workforce participation. Around 38 per cent of couple families have one parent working full time and one parent working part time, compared with an OECD average of 24 per cent, according to the Commission. This higher percentage of part-time workers is due to a range of factors, but the lack of flexibility both within the childcare system and workplaces are major contributors.

The Commission has come up with some excellent recommendations. Chief of which is replacing the current multiple childcare subsidies with a single subsidy that would be paid directly to the parents’ choice of provider, and be means and activity tested.

More importantly the subsidy would be based on a set reasonable cost of care, to avoid the continuing escalation in the cost of child-based assistance under the Child Care Benefit (CCB) and CCR. This has grown rapidly in recent years as CCR is tied to the actual prices charged by ECEC services – so families paying the most receive the highest benefits. This typically families with higher incomes, and sometimes for luxury or premium services.

The Commission also proposes reducing the regulatory burdens on some providers and enabling providers to offer more flexible services. This includes ECEC being accessible for approved in-home care. This is good news for the Family Day Care section, arguably the most flexible regulated childcare option.

Curiously, the Government reduced funding to Family Day Care in the May Budget which seems at odds with the push for improved flexibility in the sector. In its submission to the Commission, Family Day Care Australia has proposed extending the family day care model to allow qualified nannies to become an eligible service for which families can receive government assistance. This has been supported by the Commission, but only within the scope of the National Quality Framework and would not extend to unqualified support, such as au pairs.

Principal Commissioner, Dr Wendy Craik, and her team have done an excellent job in reviewing and making recommendations to enable quality and affordable childcare services in an increasingly complex world of work. The big question remains will the Abbott Government listen and beprepared to do the hard work required to implement this major piece of social and economic reform?

Claire Braund is the Executive Director of Women on Boards and the mother of five and nine year-old children.

AFR Talking Point, 23 September 2014, page 43 By Claire Braund

Download a copy here – Childcare AFR 23 Sept 2014

Notes of the Child Care Forum held on 15 August 2014

The forum to discuss the Productivity Commission Review of Childcare and Early Learning was co-hosted by the University of Sydney Business School Women & Work Research Group, NFAW and Women on Boards. It was attended by 70 people, representing a broad cross section of people from the academic sector, for-profit and not-for-profit childcare providers, government advisors, union representatives and members from the corporate Women on Boards network. The purpose of the forum was to:

  • develop informed responses to the PC Draft Review Report, and
  • canvass mid-to-long term options for the overall system which can be promoted to current and future Governments as well as the sector.

Click here for a full copy of the notes: 2014-09-17 Notes of Chlldcare Forum 15 Aug 2014_FINAL (1)

An evening with Diane Bell

Professor Emerita Diane Bell :Science Matters: Where are the young women? 105 of us enjoyed the dinner and Diane’s talk at the National Press Club on 11 November – Read more here – Science Matters Nov 11 plus slides


Government must focus on out-of-school-hours child care to get women back into the workforce

To improve women’s workforce participation more effectively, the Commonwealth Government must enhance the availability and accessibility to families, of before and after-school care for school-aged children, says the National Foundation for Australian Women (NFAW), a leading independent women’s advocacy group.

“The debate over childcare reform has been dominated by an emphasis on care arrangements for pre-schoolers.  While this is an important focus, it has unfortunately also led to a corresponding neglect in policy, understanding and services in the equally important school-aged child care sector”, said Ms Marie Coleman, chair, NFAW Social Policy Committee.

“There continues to be a substantial gap in the workforce participation of mothers compared with fathers of school-aged children.  To illustrate, the participation rate of mothers with children aged 6 to 14 years was 78 percent.  But for fathers of children in the same age band, it was as high as 92 per cent.  This suggests that accessible school-aged child care has an important role to play in closing that gap.

“The shortage of before and after school care programs is now at crisis point in many densely populated parts of the country and particularly in Sydney.  This must be treated as an urgent issue for policy-makers and also for the Productivity Commission which largely overlooked the matter in its interim report on childcare – a gap we hope will be addressed when the Commission delivers its final report on 31 October 2014,” Ms Coleman said.

Ms Coleman said that the findings of a 2012 NATSEM study supported the case for greater availability and affordability of Outside School Hours (OSH) care for school-aged children.

The NATSEM study found that only a limited number of school-aged children are in formal care and that the use of formal care is strongly correlated with parental wealth.  Specifically:

  • Just over 10 per cent of school-aged children are placed in formal OSH care when their parents are at work
  • Children living in low-income families are much less likely to be using formal OSH care than those in high income families – only 1 per cent in the bottom income quintile, compared with over 20 per cent in the top income quintile.

“These findings show there’s clearly room to improve the accessibility of OSH care.  We believe the Commonwealth government should improve funding for the sector and encourage State and Territory governments to co-operate in making school facilities available as OSH care sites.

“Commonwealth funding should be tied to appropriate standards for OSH care programs, but at the same time, the sector should not be over-burdened with ‘red tape’.  After all, the needs of school-aged children in generally short-term care outside of class time, are quite different from those of infants and toddlers in long day care.  It goes without saying that carers and educators in OSH care programs should be vetted and appropriate qualified, but it may not be necessary for all to have education qualifications or for centre reporting requirements to fall under the stringent National Quality Control Framework,” Ms Coleman said.

“Successful OSH Care programs are those that run fun, safe and engaging programs for kids from facilities located at the school itself.  Making OSH care more available, affordable and convenient will have a very positive impact in getting women with school-aged kids back into the workforce”.


For further information contact Marie Coleman on 0414 483 067 or Viv Hardy at CallidusPR on 0411 208 951 or 02 9283 4113.

Download a copy of the Release here – NFAW Release – OSH Care – September 2014-1

More attention needed for before and after-school care:


Improving before and after-school care and holiday programs could be the most efficient and effective way of helping more women re-enter the workforce, the National Foundation for Australian Women says. 

With current policy debates firmly focused on paid parental leave and care for small children, the Foundation for Australian Women is calling on the federal government to pay closer attention to care for children once they are at school.

“The concentration of parental complaints and of governmental policy on care for the under school age child has led to a serious deficiency in both service provision and policy understanding of the sector,” it says in its final submission to the Productivity Commission’s inquiry into childcare.

According to the Australian Bureau of Statistics, the workforce participation rate for mothers whose youngest child is between six and 14 years is 78 per cent. This compares to 92 per cent for fathers of school-aged children.

The Foundation for Australian Women said research indicates that only a very limited number of school-aged children are in formal care.

A 2012 National Centre for Social and Economic Modelling study found that about ten per cent of school-aged children used what is called ‘outside school hours care’ and that they were more likely to come from affluent areas. It also found that many households with school-aged children were having difficulty accessing childcare.

In its submission, the Foundation for Australian Women said that parents were also reporting particular problems during school holidays. “Parents report sub-teen children [are] unwilling to attend programs designed for five and six year-olds and that activities which are of interest are not eligible for the Child Care Benefit or Child Care Rebate.”

The Productivity Commission’s draft report, released in July, reported that it too, had heard parents were having problems accessing outside school hours care, noting that schools’ six-hour days and 12 weeks of holidays do “not facilitate parents participating in paid work”.

The commission recommended that state and territory governments direct schools to take responsibility for organising an outside hours service for their students “where demand is sufficiently large for a service to be viable”.

The Foundation for Australian Women said the idea had “merit” but “will require the cooperation of state education departments, which may be a barrier to implementation”.  “The commission’s report is unhappily not comprehensive in its treatment of this area … and we note that most commentary and response to the [draft] report has ignored the area,” it said.

The Productivity Commission will provide its final report to the federal government by October 31.

Judith Ireland, National political reporter – September 9, 2014



Review of Childcare and Early Childhood

The NFAW submission to the Productivity Commission Review of Childcare and Early Childhood argues for joint consideration of Paid Parental Leave and child care policies, and emphasises the importance of care for the school age child as likely to offer the greater gains in maternal workforce attachment – read more at:

Productivity Cssion – Final Sub Early Childhood care and education Sept 2014

Productivity Commission Final Sub early childcare and education – tax deduction child care policy chart for MC