Goodstart makes submission to Productivity Commission
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Goodstart Early Learning makes submission to Productivity Commission

by Freya Lucas

February 21, 2024

Goodstart Early Learning has called for “a major overhaul of funding and policy for early learning and care to deliver a truly universal system that is both affordable and delivers access, equity and quality for all children.”


The current Child Care Subsidy (CCS) system, including the Activity Test, is “not fit for purpose to deliver a truly universal system,” Goodstart argues. 


Instead, Goodstart is calling for a new funding system that: 


➢ Guarantees all children can access at least three days of early learning


➢ Improves affordability with a Universal Early Learning Benefit set at 100 per cent of fee for low-income families (less than $80,000 a year) tapering down to zero at the current income cut off of $530,000


➢ Improves accessibility with direct funding for new services in areas where there is not enough supply


➢ Improves quality with more rigorous oversight, with consequences for low quality providers and more support for expansion of high quality not for profit providers


➢ Improves equity with needs-based funding to support all children to participate in early learning


➢ Addresses workforce shortages with direct funding of a wage increase for educators


➢ Improves accountability with a national early childhood education and care (ECEC) Commission that makes sure government agencies are delivering and monitors providers to make sure they are not charging excessive fees.


While Goodstart is “100 per cent” behind the Government’s vision of a truly universal early learning and care system, it is a big reform which will require a long term approach, with careful staging. 


“A truly universal early learning system needs to be built from the ground up so all children can access the sort of high quality, inclusive learning that makes a real difference to child development,” Goodstart CEO Dr Ros Baxter said.


“First, we have to address workforce, as access to early learning can’t be expanded without first addressing workforce shortages and that will require Government funding a fair wage for educators.”


“Second, the government should get rid of the activity test and give all children access to at least three days of early learning regardless of where they live.”


“Third, we must address quality and equity, by supporting those providers particularly in the not-for-profit sector who deliver that now, and developing consequences for providers who don’t.”


Only then, she continued, will Australia’s early learning sector be ready to meet rapidly increasing demand by offering improving affordability to move to a more generous Universal Early Learning Benefit.


“Future growth in the sector must deliver more high-quality centres, and that means directly investing in growth of the not-for-profit sector,’ Dr Baxter said.


Goodstart also highlighted the prevalence of for-profit providers in the ECEC sector, noting ACCC findings which showed that not-for-profit providers charge lower fees, have higher quality, lower overheads, more experienced, better paid educators and invest more in inclusion than for-profit providers.


“Yet over the past decade, over 92 per cent of new places in the sector have been created in for-profit centres, so that for-profit providers now make up over 70 per cent of the long day care sector. That needs to change so every family has the choice of attending a high-quality not-for-profit service in addition to for- profit services,” she said.


Dr Baxter said the proposed Universal Early Learning Benefit proposed by Goodstart to the Productivity Commission would deliver the biggest benefits to low- and middle-income earners, reflecting the finding by the Commission that these families are most adversely impacted by the current system.


“Children from low-income families benefit most from access to early learning but are least likely to attend, while their parents are more likely than high income parents to respond to cheaper child care by increasing workforce participation,” she said.


Finally, Dr Baxter said it would be valuable to consider the Commission’s analysis of the impact of a flat 90 per cent subsidy, or $10 a day fixed fee, and that a ‘disproportionate share’ of the increased government support would go to high income families – rather than to those experiencing disadvantage, who are most likely to benefit from greater access to early learning.


“There are more important short-term priorities,” Dr Baxter said. “A reformed system would allow us to prioritise investment in workforce, access, quality and equity as a better pathway to a truly universal early learning system.”


The Productivity Commission will make its final report to the Government in June.

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