How can childcare be more affordable?
What’s the Problem?
From the period 2002 – 2015, childcare expenditure for children under 5 has increased by 74 per cent for couple families and 104 per cent for single-parent families. Around 3 in 5 households who had used or thought about using childcare reported experiencing substantial difficulties with the cost of childcare.
The rising cost of childcare has huge implications on whether parents, particularly mothers, participate in the workforce. Currently, there are around 12 per cent less females participating in our workforce compared to males. In fact, the true participation gap is actually in the order of 40 to 50 per cent due to the high proportion of women in part-time work.
With rates for childcare costing up to $170 to $200 per day in some of our capital cities, equating to an annual cost of up to $52,000, it might not make economic sense for parents to work. If we consider the fact that childcare has a positive effect on children's social and emotional wellbeing, the high cost of childcare is inhibiting the potential for our kids to thrive.
Not only that, childcare costs have been shown to increase inequality. For families in the bottom third of the income distribution, the proportion of household income spent on childcare has increased by 48 per cent in the period 2002 – 2015. For those in the top third, however, it has only increased by a little over 9 per cent.
Government regulations enforced by the National Quality Framework to upskill early childhood education staff, increase educator-to-child ratios and the implementing of educational programs will continue to see an uplift in operational costs and some of these costs will continue to be passed on to parents.
What are your ideas on how childcare can be made more affordable such that all young children have access to early learning regardless of socioeconomic circumstances?
- Single parents are more likely to use paid care than couple parents. In 2014 - 2015, 7 per cent of single parents used paid childcare for children aged under 5, while 46.5 per cent of couple parents did.
- 34 per cent of parents are late paying their bills, mortgage of rent because of childcare.
- For most families (55 per cent), childcare equates to 10-30 per cent of family income.
- Major government childcare subsidies have remained largely the same since 2008 and have not increased at all in real terms (at rates greater than inflation).
- Experts say that the factors that affect the affordability of childcare include: the supply of childcare centres and centre vacancies (both of which have increased recently); demographic and labour market changes (particularly the strong growth in female workforce participation); and regulatory changes (such as the National Quality Framework, which seeks to increase the quality of childcare).
- Despite high childcare costs, early childhood educators are some of the lowest paid professionals in Australia, earning as little as $20 an hour. It is no wonder, and very worrying, that as many as one in five early childhood educators plan to leave the profession within the year.
- The government’s new childcare plan will change the way families are given assistance with paying for childcare and is expected to be implemented in 2018. Read more about the changes here.