More voices are calling for the government to bring forward its planned increases to childcare subsidies to give parents more help with fees amid the cost-of-living crisis, but logistically, it will be nearly impossible for the changes to start before the mooted date of July 2023.
The promise to increase subsidies up to a maximum of 90 per cent, simplify the taper rate to remove “cliffs” and extend support to families earning up to $500,000 a year was a centrepiece of Labor’s election campaign.
The logistics of making changes to the childcare subsidy system mean it’s nearly impossible for parents to receive fast-tracked relief on fees.Credit: Justin McManus
Since then, the economic focus has shifted to the importance of women’s workforce participation as well as how to alleviate the ongoing cost-of-living pressures.
At the end of the jobs and skills summit last week, Finance Minister Katy Gallagher declared that “women nailed it” and gender equality was now front and centre in policymaking. But in the same press conference, she made it clear the government was sticking to starting the childcare changes in July, not earlier.
There are two problems with bringing it forward: first, the timing of legislation and subsequent technical work, and second, the desperate need for more early childhood educators.
The previous changes to childcare funding – scrapping the annual cap on subsidies for higher-income families and increasing the subsidy rate for younger siblings – were before the last parliament for seven weeks.
It then took seven months from the passage of the legislation until families with two children in childcare started to see higher subsidies – and that was six months earlier than originally slated. The then-government was able to speed up the behind-the-scenes work in part because the legislation was able to pass “quite quickly”.
The changes before that – which completely redesigned the subsidy system – took more than a year between the laws passing and becoming reality for parents and providers.
So, logistics. The childcare legislation isn’t slated for introduction this week and even if it is put to parliament next week, at best it could only pass the lower house. The following sitting of parliament isn’t until budget day on October 25 and after that week, the Senate won’t return until the back half of November.
The Coalition is yet to decide its formal position, saying it needs to see the details of the proposal.
Once the bill becomes law, public servants will have to scramble to rewire the systems used to calculate how much subsidy each family is entitled to and where to send the money.
Early Childhood Education Minister Anne Aly outlined the scale of that task on Monday: “Right now, there are … 23 third-party providers who provide software that interfaces with systems for 13,685 services, and they support 1.3 million families.”
It also involves coordinating Services Australia, the tax office and the Education Department.
“If there was a way to do this [faster], I would have done it,” Aly told the ABC.
The second difficulty with speeding this up is finding more educators.
The whole point of the $5 billion pledge to make care cheaper for parents is to increase demand because more women will be able to get jobs or take on more work. The sector’s regulator estimates an additional 37,000 educators will be needed by 2024, half of them in long daycare.
But the sector is one of the lowest paid in the country and there is already a shortfall of about 6000 educators, leading to centres turning away parents. There’s almost no way to magic up new educators within months, apart from enticing those who quit because of burnout or to pursue better pay.
It’s widely agreed by providers, educators, unions and governments that pay and conditions must improve to attract and retain the needed staff.
But that won’t happen quickly.
Ministers across all jurisdictions agreed on Monday to an implementation plan for the workforce strategy the regulator issued earlier in the year. On pay, the main action is to commission research by the end of this year into structural barriers and best practices, with the findings to be discussed at a workforce forum in December 2023.
Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.