Priorities for Childcare Reform

Media
 01 Dec 2023

Jessica Rudd is a mum, lawyer and interim Chief Executive Officer of The Parenthood, and she’s here to explain the urgent changes our childcare system needs.   

BY HEJIRA CONVERY, KINDICARE

DECEMBER 1, 2023

Jessica Rudd’s address to the National and Rural Press Club this week said a lot about the state of play of our early childhood education and care (ECEC) system.  

With eye-opening facts, a hopeful forecast, and plenty of giggles (including the obligatory Bluey reference), Jessica’s address is definitely worth watching.  

In it, she highlights the substantial challenges faced by the families using childcare and the educators providing it, and backs calls for structural reform of our ECEC system.  

In the short term (like, now), Jessica and her fellow advocates are urging the government to fix the Child Care Subsidy Activity Test for families and raise wages for educators.  

Then, once these urgent matters are dealt with, there’s a longer term goal to overhaul our system to ensure that every single child in this nation has access to affordable, high-quality ECEC. 

This reform makes sense on an individual and societal level, and Jessica has taken time out from her important work with The Parenthood to speak with KindiCare and explain why these childcare changes are badly needed, and also, highly beneficial. 

Pictured: Benjamin Balk, Founder and Chief Executive of KindiCare with Jessica Rudd, acting Chief Executive of The Parenthood

Jessica explains that fixing the Activity Test is a number one priority, because it is harming the families it sought to help.  

As you’re probably aware, the Activity Test is one of the key eligibility criteria for the Child Care Subsidy (CCS).  

You need to be active in a recognised way to get the CCS, such as by working, studying or volunteering, and the more active you are, the more subsidised care you can access each fortnight.  

Jessica says, “The Activity Test was designed to incentivise parents to rejoin the workforce after having kids,” but in reality, it’s made things tricky for many families.  

She explains that, “Because it’s so complicated, and parents are usually trying to find work at the time they start looking for childcare, the Activity Test prevents them from initiating that first step to return to the workforce.  

“Parents are spooked by the administrative burden of meeting the requirements of the Activity Test, so they don’t go for it, because they can’t get the Subsidy, and they miss out.”  

Jessica says the current Activity Test is having a particularly dire effect on disadvantaged families, and being unable to access ECEC is bad news for children and parents, and bad news for our nation.   

She says, “The overall impact is that we have children missing out on early learning in their crucial first five years, parents missing out on going back to work, households missing out on earning multiple incomes, the economy missing out, and the government missing out on revenue, because when parents are working, they are paying taxes.”  

With all this in mind, the Productivity Commission has recommended that the government relax the Activity Test, and although it’s up to them how they do this, Jessica is calling for the government to act now, not later. 

She explains that one in five Aussie children are arriving at school with a developmental vulnerability, and ECEC support is absolutely critical for all early learners in the years before big school begins.  

Jessica says a funded wage rise for educators is also imperative.  

ECEC workers are caring, committed and passionate people, doing physically arduous and highly responsible work, and we can all agree that they need to be paid fairly for the hours they put in and the priceless benefits they bring. 

Unfortunately, this isn’t the case at the moment.  

Though many ECEC providers pay above award wages and offer great incentives for their employees, Jessica says, “Educators have been terribly underpaid for such a long time and it’s no wonder that we are losing them to other sectors, like aged care, which has been given a 15% pay bump.” 

She says, “For an educator to take home $500 less per week than an entry level bricky labourer, when they are skilled and have attained the necessary qualifications of a Cert III, is just a joke.”  

She is calling for a funded wage increase, “So educators can afford to live, afford to work in the sector, afford to pay for their own children’s education, and make a life.” 

Given that pay is an urgent matter, Jessica is pleased to see the Multi-Employer Bargaining process currently underway.  

You can read more about this process here, but basically, it means that unions, employers, educators and the government can sit down together to negotiate a wage increase for early childhood educators.  

Jessica says, “Our current government designed the process and now that it’s at the table, we’d like to see them demonstrate why this is a great piece of industrial relations policy reform, by actually putting their money where their mouth is and funding a substantial wage increase.”  

She adds, “We have passionate early childhood educators who are skilled in their field, highly professional individuals who should be valued for their work,” and it’s hoped that the negotiations will ease their cost-of-living pressures, help with staff retention at services, and make ECEC a much more attractive proposition for those toying with this career.  

Once these immediate matters are dealt with, Jessica is then keen to see a structural, holistic reform of our ECEC system.  

It’s well-known that 90% of a person’s brain development happens in their first five years, but despite these years being so critical, there’s no educational entitlement for our children until they go to school at the age of five. 

As things stand, many children are missing out on the quality ECEC they need and deserve, due to affordability and accessibility challenges, but there is a push to improve things in a big way. 

Thrive by Five is calling on the government to pass legislation that will create a high-quality, universally accessible ECEC system that caters to every single early learner, and The Parenthood is totally on board with this.  

Jessica says, “It makes sense to legislate a universal child-based entitlement and to entrench that in a piece of law that can no longer be tampered with by politicians, depending on who’s in power.” 

The Parenthood is also on board with the idea of market stewardship, where an Early Years Commission (or something similar) would bring Commonwealth, State and Territory governments together to address affordability, transparency, quality, inclusion, access and flexibility in ECEC. 

Jessica is also heartened to see the Productivity Commission recommending a minimum entitlement of three days, or 30 hours per week, of ECEC for every child under the age of five, and zero-cost childcare for low-income families. 

She explains that the Productivity Commission is, “Recommending an increase to the Child Care Subsidy to 100% for families earning a combined income of less than $80,000 per annum. 

“So, what this would mean is that all those low-income households that make up 30% of families in Australia will then get access to ECEC for their children for three days a week for free, and anyone earning over that will still have the Subsidy and their kids will get that minimum entitlement of three days.”  

Thrive by Five has suggested that fees be capped at $10 per day for the three days, and whatever ECEC model the Productivity Commission recommends, The Parenthood is looking forward to seeing what they propose when their final report is released in the second half of 2024.  

Jessica and her team are also awaiting the Australian Competition & Consumer Commission’s final childcare inquiry report in late December 2023. 

When both these reports are in, Jessica says the government will have all the information and recommendations it needs to make big, beneficial changes to Australia’s ECEC system.  

In the meantime, she stresses the importance of an urgent fix when it comes to the Activity Test and educators’ wages, and we are crossing fingers (and toes) that positive change can happen soon.  

Stayed tuned!