Media Release by The Hon Mal Brough MP

Choice magazine survey paints incorrect picture

A child care survey published in the November edition of Choice magazine provides an incorrect picture of child care in Australia.

Noting that the majority of parents surveyed in the article have children in care, the survey repeats the myth that waiting lists are a measure of demand.

Waiting lists contain notoriously unreliable data as they contain duplicates and are quite often out-of-date. Parents freely admit they put their children on several waiting lists and do not remove names when they find child care.

The enhanced Child Care Access Hotline, available to parents since July 1 this year, is a one-stop-shop for parents seeking information on child care vacancies in their area.

In the week Choice asked its questions, there were between 90,000 and 112,000 vacancies across Australia, noting only 85% of services were reporting at that stage.

Choice was provided with detailed answers to a range of questions and these responses are attached.

The Australian Government has doubled funding to child care since 1996 and will spend a record $10 billion over four years to 2010. The number of child care places has also doubled since 1996, from 300,000 to 600,000 and over 804,000 children are now accessing child care.

Choice were asked to supply both their data and their survey but declined.

Key information as provided to Choice is attached along with their original questions.

When will the unannounced spot-checks on childcare facilities come into place? What were the motivating factors behind introducing this action?

In the 2006-07 Budget the Government announced the Child Care Compliance Strategy and a major overhaul of the accreditation regime to ensure that parents can have confidence in the system and to ensure that the $10 billion in taxpayer support goes to towards providing quality childcare places.

Quality Assurance spot checks are beginning from now and will continue in intensity over the next 6-9 months

We’ve recently surveyed over 12,000 parents regarding problems they have with childcare. Many complain that childcare’s too expensive and the rebate is ineffective (too late and not of use if you don’t have tax to claim it against). They also say that whenever the CCB goes up, so does the price of childcare. What is your response? Doesn’t the rebate simply favour people who are earning more and pay more tax but not much help to low-income families who don’t have much tax to claim against?

The Australian Government has doubled funding to child care since 1996 and will spend an unprecedented $10 billion over four years to 2009-10. Child Care Benefit (CCB) has greatly assisted parents with the cost of child care. Families on the lowest incomes receive the highest rates of CCB. CCB is funded immediately and paid to providers directly on behalf of parents.

The Child Care Tax Rebate was introduced in 2004-05 to further support working families with the cost of care. Eligible families can now claim 30 per cent of their out-of-pocket expenses, up to $4000 per child per year. It provides benefits over and above the Child Care Benefit.

According to the ABS Child Care Survey (May 2006) the average weekly child care cost per child was $31.

A recent report by the Australian Institute of Health and Welfare (April 2006) found that over the past 9 years child care costs have decreased as a proportion of income. A single income couple family receiving average weekly earnings with one child in 20 hours of care was paying 5.8 per cent of their weekly net income in 1995 compared to only 3.9 per cent in 2004.

Nevertheless, charging practices are commercial decisions made independently by individual child care services. The Australian Government has never had any role in determining fees, or fee charging practices.

A large number of our respondents, especially in cities, complained about long waiting lists, lack of choice of which days, and lack of choice of number of days. How is the government responding to this situation?

Families now have more choice than ever before. The number of child care places has nearly doubled in the last ten years, from 306,000 to around 600,000 places.

The June 2005 ABS Child Care Survey found that 94% of children aged 0-12 years had no requirement for any additional formal care. Since that survey was conducted the Government has provided over 30,000 additional child care places.

In the 2006-07 Budget, the Australian Government removed the cap on the number of Family Day Care (FDC) and Outside School Hours Care (OSHC) places from 1 July. This means there is now no limit on growth to 99 per cent of the child care sector.

There have been no limits on the number of long day care centre places since January 2000. Recent media reporting has shown that in most locations there is a surplus rather than a shortage of places – including in Sydney where councils are complaining of a lack of children affecting the viability of their services.

Waiting lists are not a reliable measure of demand as they are often out of date and people routinely join multiple lists. In the recent Budget, the Government also announced its intention to establish a National Child Care Management System to better track supply and publish supply and demand data that has never before been available.

The Child Care Management System will build on the improved Child Care Access Hotline which provides a one stop information and vacancy service. Over the week August 21 to 25, there were between 90,000 and 112,000 vacancies in the 85% of services reporting to the Hotline.

28% of our respondents said lack of choice of type of childcare was a problem, with 45% saying they chose commercial because it was the only one available. What are you doing to increase the choice available for families?

Child Care in Australia has always been provided through a combination of private business, community and some state and local government investment.

The Australian Government supports families in the choices they make about appropriate child care for their children and this system allows parents to choose which child care service meets their families’ needs.

There is a range of approved child care services types for parents to access, including Long Day Care, Family Day Care, Outside School Hours Care and In-home care. Working families can also receive the minimum rate of CCB for informal carers such as nannies if they are registered with the Family Assistance Office.

The number of places has doubled since 1996 – from 300,000 to 600,000 and over 804,000 children are now accessing child care, a 25 per cent increase since we introduced CCB in 2000. There are now approximately 10,000 child care services.

The Choice survey suggests that 72% of respondents were satisfied with the choices available. Notwithstanding, no system can hold surplus vacancies open in all locations by all types of providers to ensure that the full range of choices is immediately available to consumers without the costs to parents being excessive.

There’s been criticism of the accreditation of childcare centre * that centres are able to keep operating, even if they’ve failed accreditation checks. I spoke to the national childcare accreditation council who told me if centres haven’t reached the standard go through a process to try to improve. How long can they operate like this? Is this best practice to allow centres that fall below standards to continue to operate?

As indicated earlier, the accreditation process is being overhauled. On-going non-compliance is subject to sanctions by the Department of Families and Community Services and Indigenous Affairs and could lead to cancellation or suspension of a service’s Child Care Benefit approval.

Our survey indicates that childcare users want the govt to put more funding into childcare to reduce the cost to parents, and even think it should be tax-deductible if used to go back to work. Do you wish to comment on this?

As already answered, the Government provides substantial support through both the Child Care Benefit and the tax system via the Child Care Tax Rebate.

The Howard Government has doubled the funding provided for child care compared to the previous Government and doubled the number of available places.

It should be noted the Government’s support provides support to people across the income spectrum especially lower and middle income earners. Tax deductions generally help only high income earners and generally don’t provide much relief for people going back to work or on low incomes.

Does the Child Care Access Hotline now have information on where child care is available yet? Can we refer our subscribers to this service? Are there any other services that FACIA provides in relation to childcare that you think consumers should know about?

From 1 July 2006, parents have been able to telephone the Child Care Access Hotline to get information on child care vacancies in their local area. The service is not just a vacancy service. The Hotline can also provide information to families about the child care services in their area, quality issues, types of child care and Australian Government assistance with the cost of child care. Most calls currently seek information for parents relating to service types and Child Care Benefit rather than seeking specific vacancies.

To ensure more reliable information and to provide a better service to parents the Government recently announced that provision of vacancy and utilization data by providers would be compulsory where as previously it had been voluntary. The Hotline also has some further planned enhancements to provide more detailed vacancy information.

You can refer your subscribers directly to the Hotline. The Hotline is open Monday to Friday between 8am and 9pm Eastern Standard Time, on 1800 670 305 (free call).