ECEC sector responds to ACCC Inquiry Interim report
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ECEC sector responds to ACCC Inquiry Interim report

by Freya Lucas

October 05, 2023

Representatives from across the early childhood education and care (ECEC) sector have responded to the recently released Australian Competition and Consumer Commission (ACCC) Childcare Inquiry’s interim report released earlier this week. 


Early Childhood Australia (ECA), The Front Project, SNAICC – National Voice for our Children and Goodstart Early Learning have all released commentary on the report, which examined costs, competition, viability and current price regulation mechanisms in ECEC. The report also includes a set of findings that inform seven key draft recommendations, split into three broad categories: 


  • Those that include suggested refinements to the existing regulatory arrangements (1 to 5) 
  • Those that highlight potential broader design changes to the system (5 to 6) 
  • One that recommends further consideration be given to alternative price control and subsidy mechanisms (7). 


“We’ve long championed early childhood education and care (ECEC) as a fundamental social infrastructure that should be accessible to every child and family, regardless of their location or circumstances,” said ECA CEO Samantha Page. 


“This report validates that framing, recognising that while there is room for different models, there is no reason children and families should miss out.”


She also commented that the report “further recognises the importance of stability and proper remuneration of the workforce and their critical role in driving quality, ensuring the best outcomes for our children and instilling confidence in families,” linking in with the report finding that the ECEC workforce is a critical input for quality, while recognising that labour was identified as the highest cost driver for the ECEC sector (followed by land costs). 


Workforce pressures


For Jane Hunt, The Front Project CEO, acknowledgment of the workforce pressures being felt by the ECEC sector in the report was welcome. 


Ms Hunt noted that the report highlighted that those centres who invest in staff with above-award employment have lower staff turnover, staff vacancies, and higher National Quality Standard ratings.


The ACCC identified that less attractive pay, conditions, and other factors are leading to burnout and staff turnover. 


“We agree that the workforce must be well-supported because our research shows it has a direct link to quality in early childhood education and positive outcomes for children,” Ms Hunt said.


Supply and demand is not linear in ECEC


The report also identifies the limitations of relying solely on market forces to determine pricing in the ECEC sector, noting the unique factors that impact ECEC supply and demand and ways that the subsidy system has not delivered downward pressure on prices nor increased equitable access for families.


The need for decision makers to take more action to address high fees was a key takeaway for The Front Project, who note that having high fees to access quality care “greatly impacts those children who stand to benefit the most those experiencing disadvantage.”


Fee increases are more pronounced for households on very low incomes and for those experiencing disadvantage, who may be more likely to cease, or at least reduce, their use of formal childcare in response, according to the report.


The Front Project supports the ACCC’s recommendation that the government further consider and consult on changes to the Child Care Subsidy and existing hourly rate cap mechanism, to simplify their operation and address the impacts on affordability, accessibility and quality.


The organisation also strongly supports the report’s recommendation to remove, relax or substantially reconfigure the current activity test, which it identifies as a barrier to more vulnerable children accessing ECEC and its benefits, and for people entering or returning to the workforce.


“We welcome the ACCC’s recommendations to remove or relax the activity test and go further to provide accessible services to all children and families,” Ms Hunt said.


More help needed for First Nations children


Catherine Liddle, CEO of SNAICC – National Voice for our Children, welcomed the ACCC’s findings, calling for the Federal Government to increase investment in Aboriginal Community Controlled services, and to scale up regional and rural early learning infrastructure to address the challenges with ‘childcare deserts’.


“The ACCC’s report clearly identifies that there are several barriers still preventing many Aboriginal and Torres Strait Islander families and children from accessing high-quality early learning and care,” Ms Liddle said.


“If implemented, the recommendations laid out by the Commission will help ensure that meaningful steps are taken to address these challenges.”


“The Government must also ensure that funding and investment for Aboriginal Community Controlled is increased, to allow Indigenous children the opportunity to access culturally appropriate care in their early years,” she added. 


Goodstart welcomes NFP acknowledgment 


Goodstart CEO Dr Ros Baxter said the ACCC’s acknowledgement of not-for-profit (NFP) providers was a welcome one. 


“We welcome the ACCC’s acknowledgement of not-for-profit providers who are paying our teams above award wages and employing more of them in a full-time capacity – and that the benefits are evident with not-for-profits having much lower staff turnover,” she said.


“The ACCC has recognised the crucial role of attracting and retaining qualified educators in providing the quality of care that parents want, and the low wage rates that current funding arrangements result in across the sector.” 


“These are issues that could be addressed immediately, and Goodstart would welcome the opportunity to work with the Government to address these issues sooner rather than later.”


For a comprehensive analysis of the recent ACCC report, please see here

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