ACCC interim report recommendations fails to address the complexities, variations & challenges of the early learning sector

The following text is lifted from an ACA Media Release - Tuesday 31 October 2023:

ACCC interim report recommendations fails to address the complexities, variations and challenges of the early learning sector​

The Australian Childcare Alliance (ACA) has submitted its response to the Australian Competition and Consumer Commission’s (ACCC) childcare inquiry 2nd interim report, highlighting the limitations of the data presented in the report, and challenges associated with recommending viable solutions in the draft report.

ACA President, Paul Mondo, says the ACCC’s report, as it has acknowledged, offers a limited picture of the Early Childhood Education and Care (ECEC) sector, and as a result impacts its capacity to provide effective solutions to the challenges faced across the country. 

“Unfortunately, due to the limitations of the timeline in producing the report, the data simply doesn’t capture the complexity of the ECEC sector, which makes some interim recommendations unfeasible without further research into the potential impact of widespread policy changes,” Mr Mondo said. 

“Until we have a comprehensive understanding of the sector, any policy changes have potential to cause unintended but significant consequences for both service providers and Australian families.”

The ACCC report stated wage costs increased by 28 per cent between 2018 and 2022, significantly higher than inflation, and yet during this period fees had only increased by around 4 per cent each year.

These price increases were found to be structural, as the report showed that costs increased consistently over the last five years, regardless of provider governance structure, with the most significant costs to an ECEC service being wages, followed by property expenses.

The Australian Childcare Alliance offers two priority recommendations to Federal Government:

• Implementation of a Government-funded wage increase which invests in sector longevity and value, responds to growing population needs and ensures that the stabilisation of the ECEC workforce does not come at the cost of parents; and
  
  
• Removal of the activity test to give vulnerable families and children equal access to, and participation in, ECEC services.

These recommendations align with long-time positions of the ACA, which has previously addressed the failings of the activity test in relation to the Child Care Subsidy and called for a daily rate cap instead of the current hourly cap model. The ACCC 2nd interim report has included a draft recommendation supporting this, as it concluded the activity test needed to be removed or reconfigured. 

Last week, the ACA joined forces with other employer groups and the United Workers Union (UWU), the Australian Education Union (AEU) and the Independent Education Union (IEU) in landmark negotiations for Government-funded pay rises and better working conditions for Early Childhood Education and Care workers.

“A focus must be on how we can drive accessibility and affordability for all families, whilst building a strong workforce of highly skilled early childhood educators and teachers. This cannot come at an increased cost to families.”

"We look forward to working with the Government as it reviews its policies once the ACCC provides its final report to Government in December 2023,following the ACCC findings and those of the Productivity Commission later this year. Our foremost priority is to ensure that we have a funding system that ensures affordable and accessible early learning for all Australian children, for our workforce to be appropriately remunerated and for services to remain viable.”

“Quality Early Childhood Education and Care needs to be affordable and equitable for all Australian families. Historically, changes to funding have sometimes had unintended consequences that have deeply impacted the sector, so we caution against limiting flexibility that could lead to in some services becoming unviable and reducing childcare options for families,” Mr Mondo concluded

ENDS

Media enquiries: Anne Wright 0411 035 695 OR Olivia Joyce – 0448 129 595