Free childcare frees us all

Many studies have shown that for every dollar invested in quality early childhood education, there are substantial economic dividends in te future.

Now is the time for the government to think beyond the growing budget deficit and commit to quality, affordable childcare for all Australian children.

During the lockdown period in March, both state and federal governments ensured that children’s services could continue to operate. JobKeeper was available to many services, and emergency funding was made available to services that were unable to access JobKeeper.

There were no fees for both preschools and long day care with some additional funds available to ensure that centres could continue to operate.

But in July long day care centres were no longer eligible for JobKeeper. Fees to parents at eligible, community-based preschools in NSW have been waived until the end of Term 4.

Now is the time for governments – both state and federal – to rethink funding models for the sector.

There is an economic case for all levels of government to ensure that all parents have access to free childcare by investing more in early childhood education. Many studies have shown that for every dollar invested in quality early childhood education, there are substantial economic dividends in the future.

The high cost of early childhood education has an impact on workforce participation, particularly for women. Ensuring all parents have access to free childcare would ensure greater participation. Currently, the cost to parents for a child attending a long day care centre, even with the current childcare subsidy, is often higher than the cost of sending a child to an independent school.

The Grattan Institute notes that for a family with an income of $68,000 receiving the maximum subsidy, it still costs about $9000 a year to have two children in full time care. For a family in which each parent earns $80,000, the cost is about $26,000 a year. No wonder so many parents report struggling with the cost of sending their children to childcare services.

If unemployment keeps rising, the only choice for many families may be to withdraw their children from early childhood education.

Can Australia afford free universal access to early childhood education? Probably not in the present economic climate. But as we reshape our economy, we should make it a goal. Now is the time to rethink how we fund early childhood education.

Work by the Grattan Institute shows that boosting the childcare subsidy for low income families from 85 per cent to 95 per cent, removing the annual subsidy cap and tapering the subsidy down to zero for high income families would only cost the government an additional $5 billion a year. The higher workforce participation enabled by this $5 billion would boost GDP by about $11 billion a year.


Verena Heron
Industrial Officer