ECEC sector responds to Productivity Commission draft report
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ECEC sector responds to Productivity Commission draft report

by Freya Lucas

November 27, 2023

Various members of the early childhood education and care (ECEC) community have responded to the Productivity Commission releasing its highly anticipated draft report in which the commission outlines key points from its inquiry into the Australian ECEC sector commissioned by Federal Treasurer Jim Chalmers in February of this year. 


Statements commenting on the report have been grouped in key themes in the piece below. The statements are from the following ECEC bodies: 


  • Outside School Hours Council of Australia (OSHCA)
  • The Early Learning Association of Australia (ELAA)
  • The Early Learning and Care Council of Australia (ELACCA)
  • The Front Project
  • The Australian Childcare Alliance (ACA)
  • Early Childhood Australia (ECA)
  • Community Early Learning Australia (CELA)
  • Community Child Care Co-Operative (CCC)
  • The Minderoo Foundation
  • The Centre for Policy Development (CPD) 
  • The Parenthood.


Overview a cause for optimism


“The sense of purpose within the early childhood education sector has always centred on the benefits to children – both in terms of education and development outcomes, as well as laying the foundations for lifelong wellbeing,” ECA noted in its response statement. 


“At the same, ECEC enables parents, particularly women, to participate in economic activity – paid employment, running a farm or starting a business. This dual purpose has not always been reflected in government policy and funding models, but the Productivity Commission’s recommendations are cause for optimism.”


For ECA CEO Samantha Page, the draft findings and recommendations in the Productivity Commission’s report present “a rare opportunity to re-conceptualise an early childhood service system that centres children’s outcomes while also delivering for families and supporting employers,” something she says is “very exciting”.


Affordable for families, fair for workers


The report recommends that the Australian Government lead a coordinated effort to provide every child with access to three days a week of high-quality ECEC, including fully subsidised ECEC for lower income families and relaxing the Child Care Subsidy (CCS) activity test as a barrier, something which was welcomed by the majority of respondents. 


Specifically, the report recommends abolishing the activity test for families whose household income is under $80,000, and fund 100 per cent of the hourly rate cap will make ECEC services affordable for up to 30 per cent of all families.


Expanding the availability of ECEC services will, however, require governments to prioritise the workforce challenges facing the sector, ACA President Paul Mondo noted. 


“The Australian Childcare Alliance has consistently cautioned that changes to policies in the sector must reflect the unique context in which we operate within Australia and across the country. Any policy settings made in isolation are likely to lead to unintended consequences,” he added.


“A focus must be on how we can drive accessibility and affordability for all families, whilst building a strong workforce of highly skilled early childhood educators and teachers. This cannot come at an increased cost to families.”


Mr Mondo’s perspective was echoed by the bulk of respondents, with The Front Project CEO Jane Hunt saying: “Our research has consistently shown increasing the number of quality ECEC educators and investing in the sector are critical to universal access to ECEC, so every child and family benefits from accessible services.”


The Front Project further welcomed the recommendation to improve the cultural capability of all ECEC services through publicly funded professional development for staff and better support for services.


Support for OSHC welcomed


OSHCA thanked the Productivity Commission for the recognition that increasing the availability of outside school hours care (OSHC) will help many Australian families access vital care. 


Notably, OSCHA is encouraged by the recommendation that each state and territory government should task education departments with assessing the need for OSHC for each government primary school, while developing solutions where services can be established.


OSHCA has long advocated for harmonisation of regulations across states related to educator qualification and child to educator ratios and said it is encouraging to see that the Commission has also called for nationwide uniformity. 


The association was, however, disappointed that the same incentives as other parts of the ECEC sector have also not already been made available to the OSHC sector, “as the financial burden of childcare (sic.) does not cease when a child starts their schooling”, calling on the government to consider expanding their focus for affordable childcare further than early learning and long day care. 


“Whilst most families that use OSHC services have also had children in long day care, the way they use our services are fundamentally different and requires a more nuanced regulatory approach as a result,” a spokesperson said.




Many of the peak bodies and organisations who provided commentary said they were pleased with the strong and robust assessment of the current Inclusion Support Program and the urgent need to improve it for children, educators and service providers.


Commissioner Martin Stokie acknowledged this saying “the system can only be universal if every child is welcome. The Australian Government should increase funding to enable the inclusion of all children regardless of their ability or cultural background.” 


“Governments and ECEC services also need to do more to achieve the commitments in the Closing the Gap Agreement for Aboriginal and Torres Strait Islander children. That means working towards a sustainable funding model for Aboriginal Community Controlled Organisations and investing in the cultural capability of the sector,” he added.


The notion of inclusivity needs to extend to geographical barriers to inclusion, and addressing issues of access for children with disability, in regional and remote areas, or different cultural backgrounds, will be essential for realising the full benefit for the economy and families, Thrive by Five argued.


ELAA believes that ‘childcare deserts’ could be a thing of the past if dedicated preschools were given access to CCS, freeing them up to offer extended hours of care outside of the formally funded kindergarten sessions, and CEO Andrew Cameron was pleased to see that the Commission agreed. 


“We think (the report) gets it right with its recommendation that Australia’s Family Assistance Law be amended to allow dedicated preschools to claim the CCS for additional non-preschool hours,” he said. 


Despite significant funding reforms to kindergarten and childcare by the state and federal governments over the past three years, Australia is still not optimising the potential benefits of quality universal childcare, Mr Cameron continued. 


“One of the key reasons for this is the lack of available infrastructure in rural and regional areas. By adjusting the CCS to fund extended hours of education and care outside of kindergarten or preschool programs, we could see over 3,000 existing services across Australia have the potential to make additional hours of care available to families within a relatively short space of time.”


Flexibility and a holistic approach


Director of CPD’s Early Childhood Initiative Katherine Oborne called for a holistic approach, saying “creating this system will require more than increasing the CCS, relaxing the activity test, and addressing market failure.”


“From a legislated entitlement, to new funding arrangements and rethinking where roles and responsibilities sit among the Commonwealth and States and Territories, the Productivity Commission should seize the opportunity to map out the kind of changes we need to build the system Australian children and families need and deserve.”


“Reforms need to be approached holistically addressing all of these areas of the system in a coherent and coordinated way. All the reforms need to support each other and they can’t be done piecemeal if we want the system to work.”


“It’s not something that can happen overnight, but getting it right will mean we make Australia the best place to be a child and raise a family.”


A bold opportunity


The Productivity Commission’s initial recommendations outline a road map to deliver on the Prime Minister’s ambitious vision for delivering a truly universal early education and care sector, CCC spokesperson Julie Price noted. 


“This adopts many of the recommendations outlined in CCC and CELA’s submissions, including ensuring children and their needs are at the heart of the ECEC system,” she added. .


“After decades of inaction and piecemeal solutions, we’re excited to already see real progress on these issues. This includes Federal Government investment to improve access, workforce supply and quality.”


“We are really pleased to see a strong focus on equity, workforce and quality throughout this report”.


Many of the respondents took time to thank the Commissioners for the considerable amount of research, listening and learning that has been built into the draft findings.


The Productivity Commission will hold public hearings in early-2024 on the draft report’s findings, with a final report to be provided to the Government by 30 June 2024.


The Government encourages the community to provide feedback to the Productivity Commission on the draft report, which will inform the development of the final report.


The community can provide comments on the draft report by mid-February 2024 via this link

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