The lobby group representing private childcare providers – the Australian Childcare Alliance (ACA) – has slammed a proposed new activity test recommended in the Productivity Commission’s (PC) Draft Report into Childcare and Early Childhood Learning, claiming that it would spark a childcare “exodus”. From The Australian:
Gwynn Bridge, head of the Australian Childcare Alliance, which represents 70 per cent of all long-daycare centres, said the recommendation would have a “devastating” effect on children and families that need care even though they may not strictly fulfil the proposed new criteria.
She said she thought there would be an exodus from most centres.
“We are deeply concerned about the recommendation to cut off the care for parents who don’t meet the activity test and to us that is making a distinction between children in those early years,’’ she said.
“So we just think that’s hitting a very vulnerable group that we can’t support at all.”
She said the new rules would hurt people in suburban, regional and rural areas the hardest…
I’m sorry, but this is a classic case of special pleading by the ACA, which has an obvious vested interest in maximising the number of children in childcare in order to maximise its profits.
As shown in the table below, which comes from the PC report, the proposed “activity test” for eligibility to childcare subsidies aren’t exactly onerous, with mums/dads only needing to work, study or look for work for 24 hours a fortnight in order to qualify for 100 hours of taxpayer subsidies. Exemptions from the activity test are also available for parents with babies, grandparents, children at risk, etc:
Childcare subsidies are incredibly expensive and are forecast to cost the Budget some $8 billion cost over the forward estimates, following a monumental 300% increase in costs over the last decade. Given its huge cost, and that childcare subsidies are aimed at boosting female labour force participation, how is a modest activity test unreasonable?
Sure, implementing an activity test might reduce demand for childcare services at the margin. But chances are, this reduction in demand will come from those that are using taxpayer subsidised childcare for convenience rather than need, and not adding to the productive capacity of the labour force. Moreover, their absence from childcare would also help alleviate the upward pressure on childcare costs, benefiting other genuine users.
