Further responses emerge as ECEC and allied sectors come to understand new report

Responses to the recently released Productivity Commission report continue to be shared as both the early childhood education and care (ECEC) sector and allied sectors with an interest in the short, medium and long term outcomes for children and families come to understand its contents more deeply. 

 

The Australian Research Alliance for Children and Youth (ARACY), Children and Young People with Disability Australia (CYDA), Family Day Care Australia (FDCA), The Brotherhood of St. Laurence (BSL), The National Catholic Education Commission (NCEC) and The NSW Small Business Commission have all submitted their perspectives on the report, which makes several recommendations, including but not limited to: 

 

• raising the maximum rate of the childcare subsidy from 90 per cent to 100 per cent of the hourly rate cap for families on incomes up to $80,000. The Productivity Commission recommends this is implemented in 2026 to make childcare more affordable for about 30% of all families with children aged 0–12 years.

 

• for families with multiple children under five earning under $140,000, it recommends raising subsidies to 100 per cent, up from the current 95%.

 

• the proposed changes to the subsidy would not only mean more affordable childcare for low-income families. All families earning under $580,000 per year would receive a higher subsidy rate, “making nearly all [early childhood education and care] users better off”. This follows a boost to childcare subsidies in 2023.

 

Significantly, the report recommends removing the activity test from next year and recommends that state governments ensure there is outside school hours care (OSHC) for children aged five to 12 in all public schools, and an independent review of the National Quality Framework (NQF).

 

NQF review recommendation welcomed by small business

 

For the NSW Small Business Commission the NQF review is a welcomed recommendation, given the Commission’s previous advocacy in this space, having raised concerns about the way in which services are assessed against the NQF, as well as ongoing staffing challenges experienced by ECEC providers, many of which are small businesses. 

 

Speaking on behalf of the many small businesses in the ECEC sector in NSW, the Commission noted feedback from businesses that “NQF requirements were considered to be overly burdensome and convoluted, lacking in clear, objective measures for each assessment rating.”

 

“The NQF requires ongoing review to ensure there remains an evidence-based approach, with careful consideration of the operational realities of smaller ECEC providers,” NSW Small Business Commissioner Chris Lamont said. 

 

Expanded early learning options welcomed by NCEC

 

The National Catholic Education Commission (NCEC) applauded the PC position on expanded early childhood options for the broader school sector, with executive director Jacinta Collins saying the report is “a significant input into our work to chart the course to a universal early childhood education and care system.” 

 

“The Productivity Commission’s 56 comprehensive recommendations address removing barriers and emphasise the importance of accessible, flexible and high-quality early childhood options. We believe this will help smooth transitions for children entering primary school, contributing to better educational outcomes and reducing developmental gaps,” she added. 

 

“We welcome the recommendation to address barriers to providing subsidised wrap-around care in dedicated pre-schools and support universal access via an ECEC development fund to thin markets. 

 

Potential to benefit disproportionately impacted families 

 

For BSL the report represents ‘a huge step forward’ for Australia, one which, if implemented, would benefit many of the families it serves who experience disadvantage and/or intergenerational poverty.

 

“Indeed, there is a strong case to be bolder than the Productivity Commission recommends. The strength, generosity, inclusiveness and quality of a universal early childhood system is a necessary condition for growing our national prosperity, for reducing poverty in Australia and for ensuring every child can live the life they aspire to,” a statement from BSL notes. 

 

“The Federal Government must heed the Productivity Commission’s call and put a stop to the activity test. What a parent does or earns should never hinder the access their child has to quality education and care in their early years,” BSL Executive Director Travers McLeod emphasised.

 

“The Federal Government’s comprehensive Early Years Strategy, released earlier this year, indicates a commitment to reform and is an acknowledgement that the current approach is not working. Now is the time to urgently make the necessary changes to deliver a system where the children most in need of early childhood education opportunities are enabled to receive them,” he added.

 

FDCA commends Commission for noting the value of family day care 

 

FDCA National Advocacy and Engagement Manager, Michael Farrell commended the Commission for “shining a light on family day care’s unique strengths to be responsive to the diverse needs of Australia families, particularly in “thin” or underserved markets, if appropriately supported to grow and remain viable.”

 

The report, he continued, also clearly emphasised that there is a need for tailored programs, legislative amendments and/or policy shifts for the family day care sector’s true potential to be realised.

 

“The report’s response to FDCA’s long standing advocacy position around the inequitable Child Care Subsidy (CCS) hourly fee cap for family day care and the need for a non-standard hours CCS loading is welcomed, as family day care educators are independent contractors rather than employees, and thus adequate remuneration is tied directly to the CCS hourly fee cap,” Mr Farrell said. 

 

“FDCA is also encouraged by recommendations that seek to support more educators to enter the family day care workforce, for example through a bespoke traineeship program for family day care” he added.

 

FDCA was particularly encouraged that its recommendation for a model for an allowance of two family day care educators to provide education and care to up to eight children under school age at any one time in an approved venue in regional and remote Australia was also put forward.

 

“The ECEC needs of children and families across Australia are fundamentally diverse and disparate and, as such, there is no ‘one-size-fits-all’ model. For many families, family day care is their only choice, for many more it is their option of choice. A truly universally accessible ECEC system that meets the needs of children and families is unattainable without a robust and growing family day care sector,” Mr Farrell said. 

 

CYDA thankful for increased emphasis on inclusion 

 

CYDA said that it was pleased to see the report echo its longstanding calls for a stronger commitment to inclusion and inclusive practices in ECEC. 

 

“We are heartened by many of the Commission’s proposals,” CYDA CEO Skye Kakoschke-Moore said.

 

“A revitalised, affordable, and genuinely inclusive ECEC system will be life-changing, especially for children with disability who are proven to benefit most from early intervention supports.”

 

The Commission’s recommendation to enhance the government’s Inclusion Support Program is a crucial measure for which CYDA has long advocated.

 

Establishing an ECEC Inclusion Fund, if supported by dedicated streamlined processes for children with disability, would help ensure the sector meets the needs of those it has historically left behind, the advocacy body argued.

 

“Mainstream ECEC services will likely be expected to deliver more early intervention supports as changes to the NDIS progress,” Ms Kakoschke-Moore said.

 

“It would be a mistake to remove children from the Scheme before these services are fully ready and able to support them.”

 

In any reform, wellbeing must be at the heart, ARACY argues

 

ARACY emphasised  the need for any significant reform to prioritise child development and wellbeing at the core of the system, noting that children in  jobless families face significantly higher risks, being four times more likely to experience homelessness, twice as likely to be bullied or excluded, and two and a half times more likely to miss out on learning at home. 

 

As such, ARACY strongly supports the Commission’s call to scrap the activity test, along with the Commission’s recommendation that families with children under five years of age should have access to at least 30 hours of high-quality ECEC for 48 weeks a year. 

 

In assessing the effectiveness of any reforms, ARACY advocates for child development and wellbeing to be the primary outcomes and key performance indicators (KPIs) of the system. 

 

“High-quality ECEC is not just about education—it’s a protective factor for social determinants of health, supports brain development, and ensures children can thrive no matter what their background. ARACY is committed to ensuring early access to ECEC for all children to build a brighter future,” ARACY CEO Prue Warrilow said.

 

Read Jason Roberts’ analysis of workforce provisions as they relate to the Productivity Commission’s report here.