1-minute summary:
Treasurer Jim Chalmers handed down the Federal Budget last week, which included many of the promises made ahead of the election regarding education and care.
- The Childcare Subsidy was increased to 90%, meaning that 96% of families accessing Child Care Subsidy (CCS) will be better off.
- First Nations Children will get access to 36 hours of subsidised care per fortnight (increased from 24 hours).
- $10.2 million has been earmarked to establish a partnership between Australian governments and First Nations representatives to develop community-led policies and programs.
- The Government is investing $531.6 million over four years from 2022–23 to expand the Paid Parental Leave scheme and provide greater support to families. In 2026, families will be able to access up to 26 weeks of Paid Parental Leave.
- Accompanying the announcement about Cheaper Childcare was the Government’s intention to implement a range of measures to protect against CCS fraud.
- The budget includes higher education places for 1,469 early education teachers, which will be allocated to under-represented students at Australian universities, such as those from poorer backgrounds, First Nations students and students from rural and remote communities.
- The budget includes $20m over four years to set up two expert panels on pay equity in the care and community sector to support the Fair Work Commission. These panels will aim to inform the Fair Work Commission’s review of industrial awards in highly-feminised sectors like early childhood education and care, in line with the Commission’s expanded gender inclusion objectives
CELA welcomes the work of the Fair Work Commission with regard to addressing low wages in feminised industries but is deeply concerned that any outcomes will not come soon enough to address the current workforce shortages that are impacting our members. In a very tight labour market, and after two incredibly challenging years for the sector, many qualified educators are leaving, and there are not enough graduates coming through to replace them.
Last week’s interim budget, as expected, did not deliver on wages for early education and care. It did deliver on its election promise regarding affordability, meaning one less barrier for vulnerable children to access education and care. This aligns with CELA’s advocacy pillars and our 6 Point Plan for Early Education and Care, addressing issues that we have been advocating for over many years.
Over the next six months, there will be a window for workforce to be addressed, leading up to the main budget in May 2023. CELA, along with many other peak bodies, will continue to influence key politicians over coming months. Government and peak bodies alike are well aware that the Cheaper Childcare Bill, when it comes into force in July 2023, will create even more demand for our workforce, and that a stable workforce, which is nurtured and valued, is essential.
Our Workforce Pulse Check Survey for October is important, as it provides valuable information for us to share with politicians. So please tell us what’s happening with staff at your service via our survey:
TAKE THE SURVEY
Full summary for those who like the details:
Increasing the Childcare Subsidy to 90%
Treasurer Jim Chalmers handed down the Federal Budget last week, which included many of the promises made ahead of the election regarding education and care. The most important of these is $4.7b pledged over four years to increase the Child Care Subsidy (CCS) to 90% for families earning less than $530k per year.
It means that 96% of families accessing CCS for education and care will be better off, making it easier for the second earner (usually the mother) to return to work and work more if they want to. Families will continue to receive existing higher subsidy rates of up to 95% for any additional children in care aged five and under.
There is a long-game underpinning this, with the Productivity Commission engaged to investigate the feasibility of a universal 90% subsidy for early childhood education and care and the Australian Consumer and Competition Commission to investigate the drivers of costs in early childhood education and care.
First Nations Children to get access to 36 hours of subsidised care per fortnight
The Budget also delivers:
- $33.7 million to increase subsidised ECEC to a minimum of 36 hours per fortnight for families with First Nations children, an increase from the previous 24 hours per fortnight
- $10.2 million to establish a partnership between Australian governments and First Nations representatives to develop community-led policies and programs.
CELA welcomes these measures, which may assist with Closing the Gap targets. This is particularly important given 2021 saw the first time that outcomes went backwards for First Nations children since the beginning of the Australian Early Development Census began in 2009. We will continue to advocate for the removal of the Activity Test for children experiencing vulnerability, in line with our advocacy pillars and 6 Point Plan for Early Education and Care.
Expansion of paid parental leave scheme
The Government is investing $531.6 million over four years from 2022–23 to expand the Paid Parental Leave scheme and provide greater support to families. In 2026, families will be able to access up to 26 weeks of Paid Parental Leave.
Gender equity advocate Sam Mostyn will oversee the Women’s Economic Equality Taskforce. The task force will examine the optimal model for 26 weeks of Paid Parental Leave, including the number of weeks that parents can access at the same time and the mix of 'use it or lose it' weeks to support fathers to take on a more active role in caring for new babies.
You can listen to an interview about this on Radio National here
Integrity measures
Accompanying the announcement about cheaper child care was the Government’s intention to implement a range of measures to protect against CCS fraud, including:
- implementing electronic funds transfer payment of gap fees (subject to the passage of legislation)
- strengthening whole-of-government collaboration to identify, investigate, disrupt and prosecute fraudulent and criminal operations
- delivering increased education and early intervention activities to help providers who are trying to do the right thing understand their regulatory obligations better.
Broader economic factors
Labor’s commitment to making early education and care more affordable and its commitment through the Early Years Strategy (to be jointly led by Minister Anne Aly and Minister Amanda Rishworth) to address funding silos is to be lauded, particularly given the economic clouds forming around Australia at the moment.
Inflation is tipped to be at 5.75% over the rest of the financial year, peaking at 7.75% in the December quarter of 2022. Gross debt is forecast to be almost half of Gross Domestic Product (GDP) by the end of the decade, the highest it has been in 70 years, meaning Government wants to contain expenditure on services it funds.
In such a context, it is not surprising that Government wants to do all it can to slow spending (which fuels inflation). Unfortunately, keeping a lid on wages growth is one of the levers it can pull to slow inflation, but it is a balancing act, as people need enough money to be able to pay for bills, groceries and other necessities, many of which are going up due to inflationary pressures.
Is there anything in the budget for the education and care workforce?
Scholarships and free training
The budget includes higher education places for 1,469 early education teachers, which will be allocated to under-represented students at Australian universities, such as those from poorer backgrounds, First Nations students and students from rural and remote communities.
The Government is also delivering 180,000 fee-free TAFE and vocational education places, with extra support for participation of women and other disadvantaged groups.
This initiative is a key budget measure of the Albanese Labor Government. It is part of the broader commitment to deliver 480,000 fee-free TAFE and vocational education places, commencing with 180,000 training places in 2023 to support industries experiencing skills shortages. This initiative will be delivered in partnership with States and Territories. Extra training places will be delivered in the critical skill shortage areas, of which early childhood is one.
Wages for Education and Care
The budget includes $20m over four years to set up two expert panels on pay equity in the care and community sector to support the Fair Work Commission. These panels will aim to inform the Fair Work Commission’s review of industrial awards in highly-feminised sectors like early childhood education and care, in line with the Commission’s expanded gender inclusion objectives.
CELA’s advocacy
CELA welcomes the work of the Fair Work Commission with regard to addressing low wages in feminised industries but is deeply concerned that any outcomes will not come soon enough to address the current workforce shortages that are impacting our members. In a very tight labour market, and after two incredibly challenging years for the sector, many qualified educators are leaving, and there are not enough graduates coming through to replace them.
Last week’s interim budget, as expected, did not deliver on wages for early education and care. It did deliver on its election promise regarding affordability, meaning one less barrier for vulnerable children to access education and care. This addresses CELA’s advocacy pillars and elements of our 6 Point Plan for Early Education and Care—issues that we have advocated for over many years.
Over the next six months, there will be a window for workforce to be addressed, leading up to the main budget in May 2023. CELA, along with many other peak bodies, will continue to influence key politicians over coming months. Government and peak bodies alike are well aware that the Cheaper Childcare Bill, when it comes into force in July 2023, will create even more demand for our workforce, and that a stable workforce, which is nurtured and valued, is essential.
Our Workforce Pulse Survey for October is important, as it provides valuable information for us to share with politicians. So please tell us what’s happening with staff at your service here.
COMPLETE THE SURVEY
An important part of our work at CELA is year round advocacy on behalf of our members, representing the interests of community and small providers. Advocacy means we play a role in speaking with governments to highlight issues and potential solutions, and to help legislators understand how policies affect early education service providers and ultimately the families we support.
References:
1 $4.5b is the net estimated cost, as there is an estimated $200m in savings from integrity measures. See "Federal Budget commits $4.5 billion for more affordable child care", Australian Government Department of Education
2 Plan for Cheaper Child Care, Australian Government Department of Education
3 Australian Early Development Census National Report 2021, page 7, Australian Early Developent Census
4 Budget Paper No.1, page 56, Australian Treasury
5 Budget Paper No.1, page 1, Australian Treasury