Economics
Peak bodies respond to Budget announcement – a missed opportunity to support ECEC
Freya Lucas
Oct 07, 2020
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“The Government has made jobs the litmus test of this Budget. There is no more important jobs investment now – and in the future – than creating a high-quality early learning system,” Thrive by Five CEO and former South Australia Premier Jay Weatherill said of last night’s Budget announcement, which contained “nothing new” for the early childhood education and care (ECEC) sector.
Despite vigorous advocacy activity from across the ECEC sector in the lead up to the Budget announcement, the 2020-21 Budget contains no new measures to support the sector beyond those announced earlier in the year.“We had hoped that the 2020-21 Budget would seize this opportunity to support children and families through more significant reform of the Child Care Subsidy (CCS),” Elizabeth Death, CEO of the Early Learning and Care Council of Australia (ELACCA) said.
The benefits of raising the CCS rate, she continued, have been highlighted in recent research conducted by KPMG and the Grattan Institute, which both found that greater financial support for families through the CCS would generate substantial benefits across the economy.
According to KPMG, if the CCS rate was lifted to 95 per cent for low-income families (and 30 per cent for high-income families), the boost to GDP would exceed the additional federal spending by more than 110 percent, thanks to a lift in parental workforce participation.
These sentiments were echoed by Samantha Page, Early Childhood Australia (ECA) CEO, who said that while ECA welcomes the COVID-19 Response Package to help ECEC services struggling to manage the impacts of the pandemic, the measures it contains “do not go far enough”.
“It does nothing to reduce the cost burden on families or improve access for children at long term risk of disadvantage,” Ms Page said.
In the lead up to the Budget, many peak bodies from across the ECEC sector called for a range of measures to increase both the profile and funding of the sector as a whole, and to improve outcomes for children, both in the short and long term. These measures included:
- those designed to overcome barriers to participation in ECEC post the COVID-19 pandemic;
- funding to develop and implement a National Early Childhood Education and Care Workforce strategy as endorsed by Education Council in December 2019; and,
- efforts to secure a long term commitment to Universal Access to preschool funding beyond the next 18 months.
While the Budget has received praise in some circles for its role in driving job creation in sectors and industries outside of education and care, the ECEC sector, Ms Page said, has the capacity to secure more than 200 000 jobs (of which 91 per cent are filled by women), support families impacted by job losses or reduced income and provide children with quality early development experiences that can set them up for long-term education outcomes and good mental health. “The consensus amongst economists and leading researchers is that increased investment in early education would aid Australia’s economic recovery in multiple ways — boosting female workforce participation and improving education outcomes,” Ms Page said, noting that the Budget “fails to address affordability issues, address workforce shortages or help women back into paid employment”.
Executive Director of The Parenthood, Georgie Dent, pondered the sole mention of ECEC in Federal Treasurer Josh Frydenberg’s Budget delivery, saying “if the government would genuinely like to support “job creation and entrepreneurialism” among women as the treasurer claimed, why was childcare given just a single mention in his speech?”
“One of the best ways of increasing women’s participation in the workforce and solving the ‘pink recession’ is providing universal access to high-quality early learning and care,” Ms Dent added. The Australian Bureau of Statistics has concluded every $1 million spent on childcare creates about 9.2 jobs, while every $1 million spent on constructions creates around one job.
“Over the years the early learning system has become complex and outdated, now is the time for bipartisan support for a key economic reform that will drive workforce participation, productivity, GDP and government revenue,” Mr Weatherill said.
“We believe these arguments are so compelling they need to be addressed. An opportunity was missed in this Budget. We can’t afford to miss a further opportunity next year’s Federal Budget.”
To read an ECEC specific analysis of the Budget announcement, please see here.
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