Australia’s childcare system is failing to meet the educational needs of disadvantaged children, according to new findings from a report by the Australian Competition and Consumer Commission (ACCC).
The Federal Government asked the ACCC to conduct a review of the childcare sector in 2022.
In its final report, out this week, the ACCC made eight recommendations to improve childcare accessibility and affordability in Australia.
Childcare in Australia
There are about 14,000 childcare centres in Australia, including daycare centres and pre-schools, which teach children basic development skills before they start school.
Government subsidies cover some of the costs of childcare. Families earning less than $80,000 a year receive a 90% subsidy to send one child to childcare.
However, the amount of the subsidy depends on several factors, such as the type of service, the age of the child, how many children are in childcare in one family, and a family’s combined income.
ACCC childcare report
The childcare rate changed in July to increase subsidies for low-income families.
The ACCC report said the change was initially successful in reducing childcare expenses. However, it found childcare fees had risen faster than inflation and wages in the last five years.
It warned rising costs could put more pressure on families, undoing the relief brought on by last year’s increased subsidies.
The report raised concern about the declining number of family daycare centres, which provide small-group services for children from birth to around 12-years-old.
The ACCC said a shortage of family daycare services “disproportionately” affected culturally and linguistically diverse households. It also found that First Nations children are less likely to be in childcare.
Low wages in childcare were also identified as an issue for retaining educators in the sector.
Childcare recommendations
The ACCC recommended the government change childcare subsidies to give families access to more affordable care and increase support for childcare providers.
It asked the government to regularly ‘index’ subsidy amounts — adjusting prices to reflect changing costs (inflation).
The government has also been asked to take a more active role in cautioning childcare services against unfair fee increases.
The ACCC recommended the government implement measures that would allow them to publicly call out providers over-charging families.
Governments at all levels have been asked to actively monitor childcare markets, to ensure childcare is affordable and accessible to a range of groups.
This included improving access to subsidies for First Nations households.
Further consideration to increase and retain childcare staff was also recommended.
Federal Government response
In addition to the ACCC investigation, the early education and childcare sector is being reviewed by the Productivity Commission.
The government said it would consider the ACCC’s proposals along with those put forward by the Productivity Commission when it hands down its final report in June.
Early Childhood Education Minister Anne Aly said the government would “carefully look” at the ACCC’s recommendations, which will help identify areas of improvement for the future.
