The Productivity Commission’s recently released Report on Childcare and Early Learning, welcomed by Federal Social Services Minister Scott Morrison, signals another year of change for the early childhood sector.

The IEU welcomes the recommendations in the report that universal access for preschool programs be continued. However, it should be noted the report recommends extended funding to long day care centres which provide a preschool program as well.

NSW spends less on preschool funding per child than any other state. Unless the state starts spending more on preschool programs this diffusing of funds to long day care can only lead to less funding for preschools.

Of particular concern is the recommendation that the number of early childhood teachers required in a centre should be based on the number of children older than 35 months that attend, rather than the number of children at the service.

In other words, the Productivity Commission did not see any value in supplying a qualified teacher to under threes, despite overwhelming research which shows that this is the most important time for brain development in children.

The report recommends the Child Care Benefit (CCB), Child Care Regard (CCR), Special Child Care Benefit and Jobs, Education and Training Child Care be abolished and replaced with a single means tested Early Care and Learning Subsidy (ECLS) starting at 85% of the hourly benchmark price for family with incomes at $60,000 or below and 20% for family with incomes above $250,000.

The ECLS will be based not on the fee charged but on hourly benchmarked price with some differentiation based on the age of the child in care. The proposed benchmark is $7.20 per hour for children aged between three and five. This will disadvantage services that operate in areas where there are higher costs – such as inner Sydney. The report also suggested parents employing nannies who have Certificate III qualification will be eligible for funding. However the government has not committed to increasing the budget allocation to fund nannies.

To receive the full subsidy, families will have to meet a new activity test of 24 hours of work-study or training a fortnight. Parents who are receiving an income support payment, primary grandparent or non-parent carers and instances ‘at risk’ will be exempt from this test.

The proposed activity test appears to be much more stringent then the current tests for CCB and CCR.

The IEU looks forward to working with the government to ensure all children have access to quality early childhood education, whatever recommendations it carries out.