By Theresa Moore
Since the introduction by the McMahon Liberal government of the Child Care Act in 1972, government grants for child-care have become an election "carrot" used by both major parties.
As a result of government funding over the last 25 years, service provision has increased. According to the Australian Bureau of Statistics, 38,700 preschool-aged children attended day care centres in 1973, compared to 380,000 in 1993.
However, funds have not been sufficient to cover cost increases. A recent study by the Brotherhood of St Laurence found "real increases in the cost of care over the period from 1992 to 1997 ... Out of pocket costs for a full week's care in an average centre have risen by 50 per cent in real terms for low income families ... Families with two or more children are particularly affected."
The introduction of "fee relief" to funded non-profit centres in 1986 introduced income testing and prioritising of access. Commonwealth child-care assistance paid to centres at a standard rate (based on parents' incomes) subsidised the fees of low-income parents.
In response to pressure from the commercial child-care industry, the Keating government in 1991 extended assistance to private, for profit, centres.
This resulted in a burgeoning of the commercial child-care industry at the expense of community-based services. The number of child-care places in commercial centres increased from 32,296 in 1991 to 121,600 (in 2680 centres) in 1997; those in the not-for-profit sector rose from 41,086 to 46,300 (in 1120 centres).
This opening up of child-care to market forces has not led to a reduction in fees as a result of competition, nor has it meant that quality services are provided in response to real need. In order to maximise profits, commercial centres rarely provide places for children under three years, and generally employ less qualified staff than community-based centres.
The Brotherhood of St Laurence study commented: "Even if Australia has sufficient places to meet something like the need for care which families have, the distribution of care may not be adequate".
The study was concerned at large variations in adequacy between areas and the greater availability for older age groups than for younger.
The pervasive use of the terminology of the market in child-care can help to perpetuate the myth that government cuts to child-care are acceptable because there is a drop in "demand".
However, this drop is a direct result of the government policy of pushing women back into the home.
In its 1996 budget, the Howard government:
- cut $40 million from the child-care budget by eliminating operational subsidies to community-based centres;
- froze the expansion of new day care places;
- froze child-care assistance;
- means-tested child-care rebates;
- limited the number of hours of subsidised day care;
- introduced the family tax incentive.
Low vacancy rates, reduced waiting lists and centre closures have been a feature nationally (affecting both the commercial and community sector). Centres in working-class areas of the outer suburbs of Sydney and Melbourne have been the hardest hit by closures.
The NSW Local Government and Shires Association submission to a Senate inquiry stated: "Fairfield City Council reported fee increases required in Long Day Care are 26 per cent above their affordability benchmark ... Fairfield has reduced the level of service in eight centres. For Fairfield families the fee increases and changes to the nature of care have forced them to review their care options. They are i) leaving care and/or the mother leaving the workforce, or, ii)) reducing the number of hours used, and entering into complex alternate care arrangements."
The freeze on assistance and the loss of operational subsidies has led to an estimated average increase in child-care costs to parents of $27 per week: this has led to a roundabout of parents reducing day care hours, leading to more fee increases .
Fairfield children's services manager was quoted in a Sydney Morning Herald report on June 22: "Last June, Fairfield's 11 centres had 46 vacancies. Now there are 627 vacancies. Full time care there costs $173 a week."
The Brotherhood of Saint Laurence study found that groups at risk of not being able to use care because it is too expensive are those on pensions and benefits; low wage earners, particularly part time and casual; large families in rental accommodation; and families with higher health needs.
Full-time child care has been put out of the reach of most working women. The SMH report gave the example of a child care centre director, on maternity leave with her second child, who would be left with $200 out of a net pay of $590 per week after child-care costs.
In the relatively affluent southern Sydney municipality of Sutherland, two commercial centres have already closed or are up for sale. Of the 96 children who have left centres operated by the local council between January and May:
- 22 left because they could no longer afford it;
- 21 have taken the cheaper preschool option;
- 18 parents dropped out of the work force or to part time work;
- 12 were unable to afford care because of an additional child.
The NSW local government submission stated: "This position is not confined to 'Western Sydney'. A group consisting of Willoughby City Council, Pittwater Council, Warringah and Ku-ring-gai Council report that the average fee increases in Long Day Care ranges from $20 to $25 per week. The effect on families, whilst not as pronounced as Fairfield, is similar."
The crisis in child-care is not an unintended consequence of fiscal policy but a blatant piece of social engineering. In its 1996 report into child-care, the government's economic think-tank EPAC suggested that a 1% increase in fees with no additional public support would suppress demand in 2001 by around 10%. There are now 1 million parents of children under 12 years who have no access to formal child-care.