Only Macklin’s Bananas on Child Care

“The Labor Party is in no position to attack the Coalition on child care fees given its appalling record when in office,” Minister for Families, Community Services and Indigenous Affairs, Mal Brough, said today.

“Under the Coalition the overwhelming majority of families are spending less as a proportion of income on child care and fee increases over the past decade in real terms are less than those under Labor.

“The attached data from FACSIA shows the most common family using child care (couple with 1 child in part time care) are now spending between four and five per cent of their disposable income on child care compared to six per cent under Labor. This typical family has benefited enormously from the economic prosperity of the Coalition.

“While Jenny Macklin might want to bamboozle the community with tables and sweeping allegations, the facts show the real picture of childcare fees under the Coalition, such as;

• In just eight years under Labor real fees increased by 47% or $60.75.
• In 10 years under the Coalition real fees increased by 22% or $41.89.

The Minister said this data, from the Child Care Census, reflects the most comprehensive collection of what fees families actually pay. It is real fee data (i.e actual data adjusted for increases in the cost of living.)

“On one point I can agree with Ms Macklin when she says full time, five day a week approved child care at $240* a week is tough,” the Minister said.

“However, no family pays that full fee. Families receive Child Care Benefit and working families also receive the Child Care Tax Rebate. What Ms Macklin also fails to point out is that only about five per cent of children are in full time child care. The cost for the overwhelming majority of parents is far less because they use part time care.

“This scaremongering by Labor on price is doing nothing to encourage people to look at child care because if you believe Labor, you would believe that child care is out of reach.

“Labor’s policies, such as requiring carers to have four year degrees, would in fact increase childcare costs.

“Jenny Macklin can’t deny the fact that under the Coalition, most families are paying less in child care fees as a proportion of disposable income.”

Growth in Full-time Long Day Care Fees (50 hours)

Comparisons of Similar Family Circumstances

All families are different and face a range of different circumstances. Attached is a range of scenarios that cover some of the most common CCB family combinations. The scenarios were selected based on the following knowledge:

Of all long day care (LDC)/family day care (FDC) CCB families with a child <6yrs,

• 43% are couples with 1 child in LDC/FDC.
• 17% are couples with 2 children in LDC/FDC.
• 17% are single parents with 1 child in LDC/FDC.
• On average, CCB families using LDC are paying for 25hrs care per week.
• 72% of CCB families using LDC have 1 child in part-time LDC (<50hrs).
• 7% of CCB families using LDC have 1 child in full-time LDC (?50hrs).
• 17% of CCB families using LDC have 2 children in part-time LDC.
• 37% of CCB families earn less than $32,486 p.a.
• 61% of CCB families earn less than $60,000 p.a.
• 77% of CCB families earn less than $80,000 p.a.

Equivalent Family Income Comparison 1996-2006 (Real Dollars)

(allows for real wage growth based on AWOTE)

Key Findings

In the past 10 years, Australian families have benefited from real wage growth; low inflation; increased child care assistance and family benefits; and, lower tax rates.

Since 1996, across a range of equivalent family types, the Australian Government has significantly increased real disposable income for families and families pay a lower or equivalent proportion of their real disposable income towards long day care fees.

Couple families with 1 child (this type of family being the most common among CCB families) in part time long day care (with part-time being the most commonly paid and used), are paying 5 per cent of their disposable income in child care fees after government assistance is taken into account. This compares to a family in similar circumstances in 1996 who had lower real disposable income and paid 6 per cent in child care fees.

Methodology:

Source: FACSIA Analysis.

Data Sources:

• Australian Government Census of Child Care Services 2006 (preliminary data).
• ABS CPI All Groups, June 2006 (Table 1A CPI: All Groups, Index Numbers (Financial Year)(a))
• ABS Time Series, 6302 TABLE 2 Average Weekly Earnings of Employees, Australia – Seasonally Adjusted : Person – Full time ordinary time earnings.
• 2004-05 and June 2006 quarterly Centrelink Admin Data