What is the current status of the ACCC report, Productivity Commission inquiry and Educator Wage Negotiations process?

As 2024 begins in earnest stakeholders from across the early childhood education and care sector (ECEC) and beyond will again return their focus to the three important processes that were in play for much of 2023 and are expected to be resolved in 2024. 

 

This article aims to review the current status of each process and to offer a sense of timing as to when closure on the matters can be expected. 

 

Australian Competition & Consumer Commission (ACCC) Childcare review

 

The Australian Competition and Consumer Commission’s (ACCC) was directed by the Treasurer to conduct an inquiry into the market for the supply of childcare services on 28 October 2022. Since then the Commission has released two interim reports with the second report, published in September 2023, highlighting a list of seven draft recommendations. 

 

The recommendations were 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); and one that recommends further consideration be given to alternative price control and subsidy mechanisms (7).

 

Sector stakeholders are keenly interested in what the final recommendations from the ACCC will look given the concerns in some areas of the early learning community that such changes may catalyse a broader debate in Government focussing on a different regulatory set up, and that such a regulatory set up may include direct price controls and/or supply side subsidies, both of which were referenced in the second interim report. 

 

Status update: The ACCC’s timeline stipulates that the Final Report was to be submitted to the Treasurer by 31 December 2023. It does not stipulate when the Treasurer is obliged to release the report. That being said, expectations are that the report has indeed been processed and reviewed by the Government with its release due shortly, possibly soon after the Australia Day holiday has passed. 

 

PC Inquiry – A path to universal early childhood education and care

 

The Productivity Commission was also directed by the Treasurer to conduct an inquiry into the ECEC sector with a view to making recommendations that will support affordable, accessible, equitable and high-quality ECEC that reduces barriers to workforce participation and supports children’s learning and development, including considering a universal 90 per cent child care subsidy rate.

 

The inquiry, which commenced on 1 March 2023, has since released a draft report in which a close examination of the entire ECEC sector was presented alongside thirty two recommendations covering a wide range of areas and topics. 

 

The importance of the PC inquiry to the future state of the ECEC sector cannot be underestimated with history confirming that reviews of this nature have the potential to lead to significant changes to how the sector is regulated and funded. The final report will therefore be very closely watched and will be particularly impactful given next year is likely to be an election year. 

 

Status update: The PC is now midway through its inquiry timetable. The next major milestone will be public hearings commencing in February, with the final report expected to be lodged with the Government on 30 June 2023 and released thereafter. 

 

ECEC wage increase negotiations – Enterprise bargaining 

 

On 6 June 2023 a group of unions with large membership bases in the ECEC sector lodged an application with the Fair Work Commission to begin wage increase negotiations with approval being received in late September for negotiations to begin.

 

In late October, representatives from ECEC employer groups sat down with ECEC employee groups, represented by the Unions, to begin discussions with Federal Government representatives joining in mid November 2023.

 

Confirmation that the Federal Government had joined the discussions was an important development as it is hoped that, like in the Aged Care sector, negotiations lead to step change higher in educator wages that are at least majority funded by Government. Confirmation that this is, or is not the case, is keenly anticipated by sector stakeholders and has yet to be confirmed. 

 

Status update: There has been no new formal announcements from any of the parties involved in the process since November 2023 as to whether negotiations have been finalised or not, and whether any increases will be funded. That being said, if the Government has agreed to fund it, there will be a requirement to receive Cabinet approval which will take some time. Against this backdrop expectations are that late February / early March will be the next update on this process.