Opinion: Economics of early childhood education

Ready for a revamp

Lisa Bryant takes a look at the economics of early childhood education in NSW and considers how the coronavirus pandemic presents an opportunity for a rethink of funding mechanisms.

COVID-19 may not have delivered wage rises for early childhood teachers bUt it has delivered something dear to most teachers’ hearts: free early education and care for children at long day care services and free preschool for three and four year old children in NSW.

So the multimillion-dollar question is: How do we ensure this is retained in the post COVID world? The answer is obvious. Parents!

It’s clear Australia will be in a recession for a while. So any plan for young children to receive an early education free of charge (much as children in state primary schools do) will be needed to help parents and their tighter budgets.

It also costs less for the federal government to fund services this way.

Breaking it down

The federal government said it would pay an estimated $600 million to the wider early education and care sector (long day care centres, family day care services and out-of-school-hours care centres) for the first three months of COVID-19 arrangements. It has also allocated money for supplementary grants.

JobKeeper payments to the education and care sector are expected to cost $1 billion. That’s a lot of money but still less than the $2.2 billion the government would have paid under previous arrangements.

If you add up all the additional COVID-19 funding – free early education and care is cheaper for governments than partially subsidised education and care with parents paying fees.

The NSW government is only funding what it usually spends on preschools; plus up to an additional $51 million for preschools and $82 million for council services that are not eligible for JobKeeper payments.

If you add up all the additional COVID-19 funding, free early education and care is cheaper for governments than partially subsidised education and care with parents paying fees.

The flaw in this argument, of course, is that many services are receiving a much lower total income level than they had previously. Many service owners will tell you “free childcare” is coming out of their pockets.

But back to parents. Surely having had a taste of free early education, parents would be behind any push to keep it free?

Economists point out that there are inbuilt disincentives in how the Child Care Subsidy program works for women in full-time work. Coming out of a recession, the nation needs everyone working to keep its economic cogs turning.

Collective benefits

COVID-19 has also shown us that, above all, we live in a community – the virus has affected us all. This then seems a good time to talk about the collective benefit of early education for all of us.

So what are the arguments we need to muster to make free early education not just one of those weird things we did during the pandemic, such as cook all our own meals and avoid touching our faces, but a permanent feature of Australian society? Let’s list them:

  • It’s good for all of us, not just those of us with children. Why? Because it’s other people’s children who will grow up to be the nation’s doctors and nurses, among all kinds of professions. Don’t we all want them to have the best start to their education?
  • It’s simpler. Forget complex funding arrangements to parents – fund the centres directly and it’s easier for all.
  • It doesn’t cost governments that much more than usual.
  • Parents expect it now. Which political party would ever risk taking something away from a group that has accepted it as a right?

Some of these arguments are not that different to what we would have said before the pandemic. What is different now is that early childhood teachers and advocates for early education and care no longer have to use them alone – others will join in.

Get the message out

But we have to make sure governments hear us. There will be calls for some of the economic changes wrought by the pandemic to be made permanent. Who wouldn’t want less air pollution and more co-operation between state and federal governments to remain?

So we have to get our call in early and make it loud. Start by asking parents to write to their state and federal MPs to call for early education and care and preschool to be made permanently free of charge. Set up a letter-writing station next to your handwashing station and provide paper, stamps, envelopes.

Services can write to MPs as well. Write to local newspapers. Tell them how much children at your centre have gained from free preschool and early education. Remind them that one in five children in NSW is developmentally vulnerable by the time they start school.

Remind the politicians that early childhood teachers turned out to be essential workers all along, so paying them their worth would be another great thing to do after the pandemic.

Call for comment

Share your view on early childhood funding: bedrock@ieu.asn.au