Funding our future

Seminal research into the long term benefits of early childhood education has revealed investment in the sector doubles the return to Australian children, families, businesses and the economy – so why is the Federal Government failing to provide the funding the sector needs? Journalist Jessica Willis investigates.

For every one dollar invested in early childhood education, our economy will see a return of a notional two dollars over a child’s life, which is a higher return than many of our nation building infrastructure projects.

Why then, is the Federal Government continuing to provide a weak and disappointing funding model?

Investing in our future

Released this year, A smarter investment for a smarter future is the first comprehensive Australian analysis of the economic impact of early childhood education.

While we already know that the early years create the foundations for all future learning, health and wellbeing, we now have evidence that quality investment into Australian early childhood education benefits children, their parents/carers, governments and employers.

The report found the current Australian system, which offers 15 hours of early childhood education delivered by a Bachelor qualified teacher in the year before school, provides a significant return on investment.

Jane Hunt, CEO of The Front Project which commissioned the report, said its findings highlight the importance of investing in quality early childhood education for all facets of society.

“We all want our children to be more and have more than we had, and this report demonstrates that early learning is a vital part of making this possible,” Hunt said.

“It’s also vital to our economic stability as the world of work becomes more complex.

“We know that 65% of children today will do jobs that have not yet been invented, so the reality is that our children will need to learn how to learn – early childhood education enables this.

“Early learning develops the skills needed to engage in lifelong education and succeed through career changes, and we now have the data that shows Australia’s universal early childhood education policy could double its return on investment.

“The benefits of early education can be seen immediately and returns continue as those children become adults.

The report also bolsters the argument that quality early childhood education should be expanded to children two years before they start prep.

Key findings of a smarter investment for a smarter future report:

  • collectively, children see a $997 million increase in lifetime earnings, educational achievement and employment, and better health and wellbeing
  • families see a collective $1.463 billion boost in earnings for parents who can return to work or increase their hours of work
  • business and the economy see $319 million boost in productivity from a more educated workforce, and
  • governments see increased tax revenue of $313 million every year and decreased spending on health, welfare and justice worth $1.194 billion.

Evidence overwhelming

Research into the extensive benefits of investing in quality and accessible early childhood education has been around for decades. IEUA-QNT member Vikki Hartog said she first became aware of these benefits at a conference presentation by Professor of Child Development and Education Iram Siraj-Blatchford in the early 2000s.

“The early childhood sector has some of the most obvious short term as well as less obvious long term benefits regarding successful education outcomes for all students,” she said.

“[Siraj-Blatchford] demonstrated the positive long term benefits to school outcomes for children who attended high quality early childhood education settings and I realised that we, as early childhood education teachers, are critical in setting up children for success.”

Other notable research includes Nobel Prize winner Professor James Heckman’s work on the economic gains in investing in early childhood education which has shown quality early childhood education heavily influences health, economic and social outcomes for individuals and society at large.

Yet despite the evidence of the significant impact of early childhood education, successive Australian governments have failed to put the best interests of all Australians first by choosing to renew funding on a year-by-year basis, rather than commit to a long term, high quality investment strategy.

Permanent not piecemeal funding needed

The current federal funding model is the National Partnership Agreement on Universal Access to Early Childhood Education (Universal Access).

It is a federal/state agreement that commits the Federal Government to fund states and territories to provide all Australian children with access to a kindergarten program for 600 hours per year, in the year before they start school.

Universal access means that services are available to all children, irrespective of their circumstances and ensures children in rural and remote as well as low/socioeconomic communities have access to quality early childhood education.

Currently, the Australian government drip feeds the funding on an annual basis and can decide to cease funding Universal Access at any stage, much like their ‘subtle’ attempt to withdraw $440 million of funding in the May 2018 budget.

This tactic means that current Universal Access funding is only guaranteed until the end of 2020.

The fact that the government can, and has attempted to, abandon Universal Access by stealth is shameful.

Australia currently ranks below the Organisation of Economic Cooperation Development (OECD) average in spending on early childhood education as a percentage of Gross Domestic Product (GDP), trailing behind Chile, Israel, Estonia and Slovenia.

According to 2019 OECD figures, Australia invests 0.57 per cent of GDP in early childhood education and care, the OECD average being 0.8 per cent of GDP.

In comparison, countries such as Sweden, Iceland and Norway all spend at least one per cent of GDP on early childhood education.

World Bank data from 2015 shows that of 207 countries examined, the majority provided two to three years of pre-primary education and only 11 provided one year: Algeria, Angola, Bermuda, Gibraltar, the Islamic Republic of Iran, Ireland, Nigeria, the Philippines, South Africa, Sri Lanka and Australia.

Secure jobs and quality education

Recurrent and ongoing funding commitments will lead to improved service viability, planning, job security and quality.

The extension of Universal Access to three year olds would also ensure Australia meets international benchmarks.

Hartog said uncertainty regarding continued funding, and the Federal Government’s failure to provide a long-term commitment, conveyed a total lack of understanding about the value and benefits of quality early childhood education.

“It undermines the professionalism and contribution early childhood education teachers make and, if cuts need to be made, we will be the ones who suffer,” Hartog said.

“For example, long term professional development plans are made but these may not be possible as they depend on continued funding.”

The current system also means many jobs in the early childhood education sector continue to be insecure, as staffing arrangements depend heavily upon funding.

“Educated and experienced teachers need funding security to continue their work,” said Hartog.

In addition to permanent funding, Hartog believes extending Universal Access to three year olds is critical.

“If one year of high quality early childhood education is good, then two years is even better,” she said.

“I’ve had many children who start as a three year old and continue on when they are four.

“The growth in all areas of development over two continuous years is profound and I’ve had several prep teachers comment that it is obvious to them which children have attended such programs.

“Funding early childhood education is an investment in the future of our children, families, communities and the country as a whole – it’s time for that to be recognised and funded appropriately,” Hartog said.

To read the full report, visit