CCS affordability changes, 4 years of preschool funding and more in Budget 2021/22

In a highly anticipated 2021 Federal Budget the early childhood education and care (ECEC) sector will see a boost from the previously flagged changes to the Child Care Subsidy system confirmed as well as a commitment to extend the funding for the National Partnership on Universal Access to Early Childhood Education for a four year period, contingent on certain conditions being achieved. 

The failure to guarantee funding for the National Partnership beyond twelve months in the two previous federal budgets had been a matter of concern and disappointment for advocacy groups and services delivering  preschool programs across the country but after a long hiatus the Government has now moved towards a firm commitment to support continued universal access.

Despite this commitment appearing positive, the Government has confirmed that the funding will be contingent on the states and territories agreeing to a reform timeline focused on increasing participation and school readiness, with payments post 2024 being tied to attendance targets. 

Elsewhere in the Budget the Government pledged $16.9 million over four years to streamline the regulatory system as part of its deregulation agenda, which will see a new consolidated Child Care website created, and a further $17.9 million over four years to establish a new Early Childhood Program focused on children with additional needs. 

The Apprenticeship Commencement Wage Subsidy Program, which currently sees up to $7,000 per quarter per trainee in support, has been extended to March 2022 but unfortunately no specific policies were put in place, as yet, to help alleviate workforce shortages currently being experienced across the ECEC sector. 

Another area of disappointment is likely to be the failure to reduce the significant timeline between now and the implementation of the CCS changes in July 2022 and also the omission from the changes of the outside school hours care (OSHC) sector. 

The key highlights from this years Budget as related to ECEC are as follows:

Child Care Subsidy System Changes

The Government has committed $1.7 billion over five years to assist families by reducing out of pocket costs and supporting parental choice through increasing the Child Care Subsidy (CCS) rate by 30 percentage points for the second child and subsequent children aged five years and under in care, up to a maximum CCS rate of 95 per cent for these children, commencing 11 July 2022; and removing the CCS annual cap of $10,560 per child per year commencing 1 July 2022.

Guaranteeing Universal Access to Preschool funding for four years

The Government will provide $1.6 billion over four years from 2021-22 to make an ongoing Commonwealth funding contribution to preschool. The first four years of funding will be delivered through a new funding agreement to be negotiated with the states and territories. The new agreement will support access to at least 15 hours of preschool each week (600  hours per year) for children in the year before school for a period of four years. From 2023 this will include funding of around $1,340 per child in 2022 regardless of the preschool setting. 

Funding to improve preschool data collection and a new performance framework 

A preschool outcomes measure will be developed and trialled for introduction in 2025. The measure will include $33.6 million over five years from 2021-22 to improve preschool data collection and underpin a new preschool framework to support the reform.This includes funding for the annual National Early Childhood Education and Care Collection (NECECC), to improve and expand the NECECC to underpin a performance framework to drive reform with a focus on attendance and to develop and trial a method for testing the degree to which preschools achieve the outcome of getting children school-ready.

Establishment of a new disability focused Early Childhood Program

The Government will provide $17.9 million over four years from 2021-22 to establish a new Early Childhood Program. The program will deliver a range of disability-specific information, workshops and supported playgroups for young children aged birth to eight years of age with disability or developmental needs. 

Funding to reduce red tape in child care

The Government will provide $134.6 million over four years to progress the Commonwealth’s deregulation agenda to ‘reduce unnecessary regulatory burden’ of which $16.9 million will be used to, amongst other things, establish a central child care services website, consolidating two existing sites. This is expected to make it easier for families to get accurate information about child care services, quality, fees and vacancies. In addition, the Government will pilot joint monitoring, data sharing and compliance operations with two states’ jurisdictions in a bid to step up efforts to prevent and detect fraud within the child care system. 

Expansion of Boosting Apprenticeship Commencement Wage Subsidy Program

The Government will expand the Boosting Apprenticeship Commencements wage subsidy to further support businesses and group training organisations to take on new apprentices and trainees. This measure will uncap the number of eligible places and increase the duration of the 50 per cent wage subsidy to 12 months from the date an apprentice or trainee commences with their employer. From 5 October 2020 to 31 March 2022, businesses of any size can claim the wage subsidy for new apprentices or trainees who commence during this period. Eligible businesses will be reimbursed up to 50 per cent of an apprentice or trainee’s wages of up to $7,000 per quarter for 12 months.