Making preschool more affordable would lead to greater outcomes in adult life: study

If preschool was more affordable for families, more children would finish school, unemployment would be lower, there would be less crime, and health outcomes would be better, new research from Impact Economics and Policy has shown. 

Released in partnership with the Minderoo Foundation’s Thrive by Five campaign, the research also found that recent announcements of free preschool in NSW and Victoria are being undermined by the Federal Government’s Activity Test.

The research found that even with new preschool policies in NSW and Victoria, parents subject to the Activity Test will still need to pay between $7,000 and $24,000 per child over two years, something which is considered to be unaffordable for many middle and low-income families.

“There’s a belief that the reforms we’ve seen in NSW and Victoria and which are also being considered in Queensland, South Australia and Tasmania will make pre-school more affordable for families,” said Minderoo Foundation’s Jay Weatherill.

“However, this analysis shows state-based reforms will be significantly undermined if families continue to be subject to the activity test. Governments are effectively giving to families with one hand and taking away with the other.”

The research found between 18,100 and 23,900 more Australian children would finish high school if two years of pre-school was made universally accessible. The benefits from increased school retention would add up to $27.3 billion to the economy.

The total lifetime benefits of increasing access to two years of pre-school would add up to $40.9 billion to the economy through increased earnings and less need for social services such as Centrelink, authors note. 

The numbers, Impact Economics and Policy Lead Economist Dr Angela Jackson said, provide the hard evidence policy-makers needed to make pre-school universally accessible and affordable. 

“Allowing more three and four-year-olds to go to preschool would not only benefit the children and families themselves, there would be flow-on impacts for Government and the whole of society,” Dr Jackson said.

​The embargoed report was been made available to The Sector at time of print. It is now publicly available and may be viewed here.