Why the Child Care Subsidy is failing parents

Parents’ out-of-pocket costs for long day care and other formal care grew by 50 per cent between 2011 and 2017.

But despite this massive investment, at least half the parents eligible for the new Child Care Subsidy see the system as inflexible and unaffordable, according to Centre for Independent Studies research released this week.

The feedback from surveyed working mothers with children aged between newborn and five reveals that current child care policy may not be meeting their needs or fulfilling national policy goals — particularly that of enabling women to more easily be part of the workforce.

The Child Care Subsidy is only available to families using formal, centre-based care such as long day and out-of-school-hours care. These facilities are often hard to access, with too few places for infants and little flexibility for parents to change the frequency and timing.

Rather than formal care, 50 per cent of the mothers said they would prefer informal arrangements. They wanted the option to have a grandparent or other relative, a friend or a nanny providing care, with 66 per cent even saying they would accept a lower subsidy if this meant more flexibility and affordability.

Formal child care is promoted as a contributor to educational success, and — despite there being little evidence of a benefit for most children, except for disadvantaged ones — it has been extended well beyond the notion of a year of pre-school that prepares young Australians for formal schooling.

But the CIS research showed that working mothers’ highest priority when choosing child care was the ‘warmth’ of the care-giving, with 60 per cent putting this in their top three considerations, along with cost and location. They were much less interested in the qualifications of child care workers, with only 9 per cent calling this the most important factor.

Only 10 per cent pointed to early childhood education as their major focus.

It is clear, however, that the steady increase in costs to taxpayers and families is because the dominant force in the child care industry — the National Quality Framework introduced in 2012 — puts very high and expensive expectations on centres offering formal care, mandating diploma or degree qualifications for staff and a focus on early learning as part of the daily routine.

For decades, governments have emphasised their commitment to helping parents — particularly women — to participate in the workforce. However, many mothers contributing to the CIS study stated that they were underemployed, with 46 per cent saying they would work more hours if they could rely on other types of child care.

The policy conflict is obvious and needs to be resolved. The current system looks like an attempt to retrofit a four-year early education strategy over the top of a workforce participation scheme.

There is no evidence that this is what the majority of parents want. Indeed, it appears to bring significant negative consequences, including putting barriers in the way of parents who want to work. Apart from the personal impact on any employment goals that mothers and fathers may have, such disincentives to work have real implications for the Australian economy.

Children’s safety and wellbeing are paramount. But good policy must design a system that meets parents’ needs and spends taxpayers’ money wisely.

Dr Fiona Mueller is Director of the Education program at the Centre for Independent Studies, and co-author of the research paper ‘What do parents want? Polling on preferences and attitudes to childcare in Australia’.