Productivity Commission releases highly anticipated ECEC inquiry draft report

The Productivity Commission has released the draft report from its inquiry into the Australian early childhood education and care (ECEC) sector commissioned by Federal Treasurer Jim Chalmers in February of this year. 

The report presents the Commission’s assessment of the state of the early childhood education and care (ECEC) sector and seeks to chart a pathway towards universal access, defined as a system that “will support affordable, accessible, equitable and high-quality ECEC that reduces barriers to workforce participation and supports children’s learning and development.”

The Commission acknowledged that the journey to universal access will “take time” and highlighted as a priority that Governments should seek to address affordability and availability gaps for those least able to afford ECEC or who can only access few, if any, services.

Key areas that were examined and considered by the Commission include:

Availability – How to make services available in areas of low supply, while ensuring that services offered exceed or at least meet quality standards. 

Affordability – How to address concerns about inequities and lack of flexibility in the current subsidy structure.

Inclusivity – How to ensure that services are truly inclusive for all children, and that programs intended to support inclusion reach the children who need them. 

Flexibility – How to make services more responsive to the needs of families via better matching of hours used and hours charged and provision of extended care at preschools. 

The scope of the reform agenda detailed in the report was substantial with particular recommendations including providing up to thirty hours or three days a week of quality ECEC should to all children aged 0 – 5 years, raising the maximum rate of CCS to 100 per cent for families on household incomes less than $80,000 and relaxing the activity test within the Child Care Subsidy of note. 

Importantly the report also confirmed the significance of resolving workforce challenges in the sector and emphasised that solving the educator scarcity crisis should be a key priority for the Government in the short term.

“The investments and changes we’ve made are already making early learning more affordable and accessible right across Australia – but we know there is more work to do,” Minister for Earlier Childhood Education Dr Anne Aly said. 

Minister for Education Jason Clare added that the Productivity Commission’s Inquiry will help “chart a course to a universal early childhood education and care system.”

Over the coming months the Productivity will continue to examine the ECEC sector as it prepares its final report due to be released in June 2024.  

Feedback and submission on the draft recommendations in the report are now being solicited by the Commission with public hearings scheduled to be held in February and March 2024.

To review the Productivity Commission’s draft report click here. 

A deeper analysis of the report with observations and analysis will be published on The Sector website on 27 November 2023.