tag:theconversation.com,2011:/africa/topics/families-package-14110/articlesFamilies package – The Conversation2017-02-09T01:50:50Ztag:theconversation.com,2011:article/726572017-02-09T01:50:50Z2017-02-09T01:50:50ZOmnibus welfare bill shows the always-tricky politics of budget savings<figure><img src="https://images.theconversation.com/files/156007/original/image-20170208-9124-f7sy9a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government claims budget savings will more than offset its additional spending on child care.</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>The Turnbull government has introduced a <a href="http://www.abc.net.au/news/2017-02-08/omnibus-budget-savings-bill-to-be-introduced-to-parliament/8249754">new omnibus savings bill</a> to parliament. It has combined and revised several previously blocked welfare measures into a single piece of legislation to try to achieve nearly A$4 billion in net savings over the next four years. </p>
<p>This bill builds on a range of measures introduced by the Abbott and Turnbull governments. Some go all the way back to the <a href="https://theconversation.com/looking-inside-the-sausage-machine-the-budget-is-still-unfair-42407">2014 budget</a>. But they have evolved since then, particularly with bills proposed by the Turnbull government in <a href="https://theconversation.com/family-tax-benefit-savings-trimmed-but-families-with-teenagers-hit-hardest-49496">October 2015</a>.</p>
<p>By far the most significant projected savings – A$4.7 billion over the next four years – in the bill are made by phasing out end-of-year supplements for family tax benefit recipients.</p>
<p>However, there are potential risks – either to the government’s budget strategy or to its political popularity over the next four years – should these payments be phased out, or Centrelink’s new computer systems not deliver as envisaged.</p>
<h2>What else is in the bill?</h2>
<p>The omnibus bill includes the government’s <a href="http://www.malcolmturnbull.com.au/media/responsible-budget-savings-to-fund-more-affordable-child-care-for-australia">proposed changes to child care</a>. This involves about A$1.7 billion in increased spending between 2016-17 and 2019-20, including some measures not requiring legislation. </p>
<p>The most notable sweetener in the revised package is an increase in rates of family tax benefit by about A$20 per child per fortnight. This will have a much larger overall cost, of close to $2.4 billion over four years. But the government claims budget savings will more than offset these additional expenditures.</p>
<p>The bill’s <a href="http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;page=0;query=BillId%3Ar5798%20Recstruct%3Abillhome">financial impact statement</a> shows more than A$900 million will be saved through closing the Energy Supplement to new welfare recipients. Changing the age of eligibility for a range of payments will save a further A$430 million.</p>
<p>The end-of-year Family Tax Benefit A supplement, which is currently around A$730 per year per child, will be progressively cut and phased out by July 2018. The Family Tax Benefit B supplement of A$350 per year per family will also be phased out.</p>
<p>Offsetting this is the increase in fortnightly rates. But this will still mean families with combined annual incomes below A$80,000 will lose around A$200 per year per child, plus an additional A$350 per year if they are a single-earner household.</p>
<h2>Where did these payments come from?</h2>
<p>The phasing out raises the question: why did we have these end-of-year lump-sum payments as part of the family tax benefit system in the first place?</p>
<p>The Howard government introduced these payments in the <a href="http://www.formerministers.dss.gov.au/6012/budget04_overall/">2004-05 budget</a>, initially as an increase in the rate of Family Tax Benefit A of A$600 per child. This was to be paid as a lump sum upon reconciliation of entitlement following the end of the financial year.</p>
<p>The annual lump sum was available, if required, to offset any overpayment of family tax benefits that may have occurred during a previous year. </p>
<p>Some saw this as middle-class welfare, or even vote-buying, before the 2004 election. But the lump sums tackled an overpayment and debt problem the Howard government created when it introduced reforms to family payments, to compensate for the introduction of the GST in July 2000. </p>
<p>Under the previous system of family payments for low-income working families, entitlement to these payments was based on a family’s incomes in the previous financial year. There were differing ways of adjusting for changes in incomes in the year in which the payment was actually made.</p>
<p>Under the new system, payments were significantly increased. And families were given the option of taking their payments in the form of reductions in income tax paid by their employer.</p>
<p>An annual reconciliation process was introduced to ensure families who took their payments through the tax system were treated in the same way as those who received cash benefits from Centrelink.</p>
<p>Before the beginning of each financial year families were asked to estimate what their income would be in the subsequent tax year. After they filed their tax returns there was an end-of-year reconciliation. This meant families received extra payments if they had overestimated their incomes, but incurred debts if they had underestimated their incomes and been overpaid. </p>
<p>This end-of-year reconciliation made the system more responsive to changes in income and allowed people who had been underpaid to receive top-ups. However, the system’s greater responsiveness led to a very large increase in debts. </p>
<p>Before the system’s introduction, just over 50,000 families had debts at the end of each year. But in the new system’s first year it is estimated around 670,000 families had been overpaid. </p>
<p>This led to <a href="https://www.jrf.org.uk/file/36835/download?token=wR_72oK9">considerable media and political controversy</a> throughout 2001 and 2002. In July 2001, just before an important byelection, the Howard government announced the waiver of the first A$1,000 of all overpayments. This reduced the number with debts to around 200,000 families.</p>
<p>There was further fine-tuning in 2002. And an Ombudsman’s report in 2003 concluded that, despite previous adjustments, the system would be likely to continue to result in significant numbers of unavoidable debts, and that the government should consider further policy changes.</p>
<h2>Potential perils ahead</h2>
<p>The controversy seems to have died down since the introduction of the end-of-year supplements in 2004. However, the Turnbull government’s proposal to phase out the payments implies that it considers the overpayment problem has been solved.</p>
<p>Here, the issue has some apparent parallels with the <a href="https://theconversation.com/note-to-centrelink-australian-workers-lives-have-changed-70946">Centrelink debt controversy</a> – which seems likely to be subjected to a <a href="http://www.smh.com.au/federal-politics/political-news/greens-and-labor-to-move-for-senate-inquiry-on-centrelink-automated-debt-systems-20170207-gu7h3s.html">Senate inquiry</a>. </p>
<p>There are important differences, however. Entitlement to income-support payments is primarily based on fortnightly income, whereas entitlement to family payments is based on annual income.</p>
<p>Why the government thinks the overpayments and the subsequent debt problem will be resolved so that the lump-sum payments can be phased out is not entirely clear. But it appears to reflect the <a href="https://www.itnews.com.au/news/cabinet-approves-1bn-centrelink-systems-upgrade-402586">2015 update of Centrelink’s computer systems</a>.</p>
<p>Complementing this are proposed changes in reporting systems to the Australian Tax Office (ATO), particularly the introduction of the <a href="https://www.ato.gov.au/general/new-legislation/in-detail/other-topics/single-touch-payroll/">“Single Touch Payroll” system</a>. This will mean that when employers pay their staff, the employees’ salary and pay-as-you-go withholding amounts will be automatically reported to the ATO, which can then share this data with Centrelink.</p>
<p>So, what the government appears to be assuming is that computer and system updates will provide a “technological fix” to the problem of family tax benefit overpayments – and thus it will be able to save A$4.7 billion over the next four years. But this may not occur if the new computer systems <a href="http://www.canberratimes.com.au/money/tax/tax-time-in-danger-from-atos-tech-wreck-20170207-gu7a98">are not working</a> in the ways envisaged.</p><img src="https://counter.theconversation.com/content/72657/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Whiteford has received funding from the Australian Research Council. He is affiliated with the Centre for Policy Development. </span></em></p>By far the most significant projected savings in the government’s omnibus bill is the phasing out of end-of-year supplements for family tax benefit recipients.Peter Whiteford, Professor, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/514642015-12-02T03:50:36Z2015-12-02T03:50:36ZFeminist childcare fight comes full circle as job-based policy fails children’s needs<figure><img src="https://images.theconversation.com/files/103631/original/image-20151130-10262-1du61h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government's childcare reforms seem to be counterproductive in many ways and are likely to damage children.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>In the 1970s, feminists pushed for children’s services that recognised the need for care for children whose mothers had jobs. In 2015, the situation has reversed. Feminists and others concerned about good social policies need to push the rights of children to funded children’s services, regardless of whether the child’s “primary” carer has job-related activities. </p>
<p>Oddly, this reversal has come from a Coalition government that used to defend the right of mothers to stay at home and not be pressured to find paid work. The government’s current proposals will deny the children of these women access to subsidies for any form of care services, except for 15 hours of “preschool” per week in the year before school. </p>
<p>This shift revives the perceived tensions between “stay at home” mothers and “working” mothers, but in reverse – by enshrining policies that are designed to push more primary carers into paid work.</p>
<h2>Won’t improve care</h2>
<p>The government’s Child Care Subsidy – the A$21 billion centrepiece of its <a href="https://www.dss.gov.au/sites/default/files/documents/08_2015/child_care_assistance_package_-_overview_-_a3.pdf">“families’ package”</a> from the May budget – is a single payment based on family income that will start on July 1, 2017. It will provide assistance to meet the childcare costs of parents engaged in work, training, study or other recognised activities.</p>
<p><a href="http://www.dailytelegraph.com.au/news/opinion/samantha-maiden-parents-who-lose-all-childcare-benefits-have-a-right-to-spit-dummy/story-fni0cwl5-1227626804839#load-story-comments">One in four</a> parents currently using childcare services don’t have work-related needs. This includes 156,000 stay-at-home parents with a provider partner, 63,000 single parents who are not in jobs and 15,000 non-employed families. </p>
<p>So, one-quarter of a million current or similar future users would have their access reduced, or cut out, under the government’s changes.</p>
<p>As an advocate for job-related child care way back, I see this as a bizarre failure. It is a change that undermines the right of children to subsidised care services. The object of the changes, then and now, was based on a recognition that raising children requires “a village”, which can be replaced and augmented by “kindergartens” offering access to other children, adults and skills that complement families.</p>
<p>The official justification for this current set of reforms is put in terms of increasing GDP. But this ignores other benefits of quality early care, which is more than just employed parents.</p>
<p>The complex, overly bureaucratic, new funding formula has three stages of hour-based core fee subsidies. Calculated entitlements are based purely on the paid work status of parents.</p>
<p>The extra special needs funding is also justified in terms of future GDP gains via more workers. Despite being touted as addressing disadvantaged needs, it is likely to fail because access to this funding involves extra verification, as well as stigmatising labelling – which deters possible users. This funding offers time-limited access to services, which takes up more time and effort by the services, so few will take it on. </p>
<p>Another flaw in this model results from individuated funding gradually replacing the budget-based funding that directly subsidises services, mainly Indigenous ones, that don’t fit the workforce participation model. It is likely that this effective set of services will have to close, as the focus on funding individuals will undermine the secure funding a serious community service needs.</p>
<h2>Won’t make it easier to find work</h2>
<p>This adds to the case for rejecting the individuated workplace support focus. It excludes families from subsidised child care where the “primary carer” is not in work-related activities. Families make decisions on how or when to get paid work on a range of factors that go well beyond the economic.</p>
<p>For many parents, finding jobs when you have young children requires having a place in an acceptable children’s service before even looking for jobs. ABS <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/mediareleasesbyReleaseDate/D422D0160CA82AE8CA25750C00117DD1?OpenDocument">workforce data</a> show women with preschoolers (41%) are less likely to be in the labour force than those with children aged five to nine (25%). </p>
<p>Once the kids are settled and the parent is comfortable, then they search for paid work that fits with available hours and other needs.</p>
<p>Therefore, many of those now using childcare services may well fail to find jobs if their care time is cut or they find they have no continuing access to care. Other parents who have irregular – maybe sporadic – workforce spells may find the new system hard to manage and could even give up paid jobs if they find the system of reporting too hard.</p>
<p>The services may also baulk at the complexity of working out entitlements. </p>
<p>These current proposals are too complex and overly bureaucratic. The changes seem to be counterproductive in many ways and are likely to damage children, and so should not go ahead.</p>
<hr>
<p><em><strong>Further reading:</strong> <a href="https://theconversation.com/childcare-funding-changes-leave-disadvantaged-children-with-fewer-hours-of-early-education-51488">Childcare funding changes leave disadvantaged children with fewer hours of early education</a></em></p><img src="https://counter.theconversation.com/content/51464/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The government’s childcare reforms are designed to push more primary carers into paid work.Eva Cox, Professorial Fellow, Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/514882015-12-01T19:11:40Z2015-12-01T19:11:40ZChildcare funding changes leave disadvantaged children with fewer hours of early education<figure><img src="https://images.theconversation.com/files/103810/original/image-20151201-26591-jjnh13.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Children need more than one day per week of preschool education to feel secure, build relationships and support learning.</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Hundreds of thousands of disadvantaged Australian children will be worse off from next week following government changes to childcare funding which mean they will receive fewer hours of early education.</p>
<p>While the <a href="http://budget.gov.au/2015-16/content/glossy/families/download/Budget-2015-Families-Package.pdf">government’s Families Package of A$3.5 billion</a> in new investment is expected to leave most working families better off, the cuts to the hours of early learning for low-income and disadvantaged households threaten to make it a backward step for our nation.</p>
<p>Under the current system, these children receive up to 24 hours of early childhood education and childcare (ECEC) a week, or about two days per week in a long day care centre, regardless of their parents’ work status. </p>
<p>The government is planning to cut this support by half.</p>
<p>These changes will shape the lives of the 900,000 families who currently use ECEC and the hundreds of thousands to follow in coming years. </p>
<p>It’s hard to overstate what’s at stake for children from low-income and disadvantaged families under the new legislation.</p>
<p>The pendulum seems to be swinging back towards a narrower view of investment in childcare to boost work participation, rather than a broader view of also supporting all children’s learning and development.</p>
<p>The developmental gap between children from higher- and lower-income families is already very stark. </p>
<p>The <a href="https://www.aedc.gov.au/parents/findings-from-the-aedc">2012 Australian Early Development Census</a> of all Australian children entering year 1 found that children from low-income families were much more likely to start school developmentally vulnerable. </p>
<p>The evidence also suggests that children who begin school behind their peers often stay behind.</p>
<p>Just 12 hours of ECEC a week is simply not sufficient to close the developmental gap. </p>
<p><a href="http://www.natsem.canberra.edu.au/storage/ANALYSIS%20OF%20THE%202015%20BUDGET2.pdf">Research</a> suggests up to 250,000 families could see a reduction in access to ECEC as a result of these changes.</p>
<p>The <a href="http://www.highscope.org/content.asp?contentid=219">Perry Preschool Study</a>, focusing on children experiencing disadvantage, found that 14 hours of participation a week in early learning was a key factor leading to significant developmental gains. </p>
<p>More recent studies, focusing on children aged 3–5 years, support the need for full-day ECEC programs where children attend <a href="https://www.edu.gov.on.ca/kindergarten/theresearchisin.html">several days per week</a>.</p>
<p>This makes sense. Any qualified educator will tell you that children need more than one day per week to feel secure, build relationships and support learning.</p>
<p>In the UK, evidence from a <a href="https://www.ioe.ac.uk/RB_Final_Report_3-7.pdf">long-running study</a> helped persuade the government to fund 15 hours per week of free ECEC for children from the age of 2 years on. </p>
<p>New Zealand, recognised as a world leader in ECEC, has gone further, funding 20 hours for children from 3 years regardless of what their parents are doing. </p>
<p>The new education minister, Simon Birmingham, could use the legislation to build a strong system of quality, inclusive ECEC services, for all Australian children and their families, by balancing the focus of the package to ensure it puts the development of children on a par with workforce participation.</p>
<p>He should ensure that a child’s access to early learning isn’t diminished because their parents don’t work.</p>
<p>Getting the new package right will help hundreds of thousands of children start school well. Investing early in our most disadvantaged children will significantly improve their lives, our nation’s future productivity and society.</p><img src="https://counter.theconversation.com/content/51488/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Susan Irvine does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Under new legislation, children from low-income families will receive just 12 hours of early learning support a week, adding to the risk of these children falling behind their peers at school.Susan Irvine, Academic Coordinator, Bachelor of Education (Early Childhood), QUT Caboolture, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/378492015-02-23T06:00:17Z2015-02-23T06:00:17ZProductivity Commission childcare report shows blind faith in market<figure><img src="https://images.theconversation.com/files/72712/original/image-20150223-21907-1n18v1m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Productivity Commission's report on childcare will help inform the Abbott government's soon-to-be-unveiled 'families package'.</span> <span class="attribution"><span class="source">AAP/Paul Miller</span></span></figcaption></figure><p>The Productivity Commission’s <a href="http://www.pc.gov.au/inquiries/completed/childcare/report">final report</a> on childcare and early childhood learning has been a long time coming. Its recommendations will now <a href="http://www.theleader.com.au/story/2897050/learning-curve-morrison-says-productivity-commissions-childcare-report-a-key-input-to-governments-families-package/">reportedly</a> form a key part of the Abbott government’s promised “families package”. </p>
<p>So far, most of the response to the report has focused on the shift in funding models and its recommendation of a single means-tested subsidy paid directly to the childcare service. Little attention has been paid to many other recommendations that radically shift the basis of funding and types of services. It is particularly important to examine the assumptions on which its recommendations are based.</p>
<p>Many of the proposals derive from assumptions that the funding of these services should ensure minimal interference, with a classic, market-based model for meeting “demand”. These assumptions ignore the Productivity Commission’s evidence that the current market-based supply of services is not responding adequately to non-mainstream parental needs. </p>
<p>These concerns were clearly articulated by families as part of the reason for setting up the inquiry. Most parental submissions and parent groups claimed that there were:</p>
<ul>
<li>inadequate places for children under two; </li>
<li>maldistributed locations of services – so some areas, for example the inner city, lacked places; </li>
<li>costs were often too high in areas with fewer places;</li>
<li>a lack of flexibility; and</li>
<li>many good services had long waiting lists. </li>
</ul>
<p>As the Productivity Commission’s terms of reference acknowledge:</p>
<blockquote>
<p>The child care and early learning system can be improved because families are struggling to find quality child care and early learning that is flexible and affordable enough to meet their needs and to participate in the workforce.</p>
</blockquote>
<p>None of these issues have been addressed per se – except by adding <a href="http://www.smh.com.au/federal-politics/political-news/nannies-and-a-single-payment-recommended-by-childcare-report-20150219-13jc0n.html">nannies to the mix</a>, which raises other issues. The Productivity Commission’s <a href="http://www.pc.gov.au/inquiries/completed/childcare/report/childcare-volume2.pdf">view</a> on these areas is that the market will provide if some parents improve their demands:</p>
<blockquote>
<p>In Australia, ECEC [early childhood education and care] services are supplied under a market model, with services delivered by mostly non-government providers on a fee-for-service basis. Governments continue to have a major role in funding, regulating quality and, in some cases, providing services.</p>
<p>Choice is a key benefit of a market-based model. In most markets, parents have some capacity to choose between similar providers and there is competition. </p>
<p>Because long day care providers commonly cross-subsidise fees, parents may not realise the full cost of the services they use and the allocation of childcare places is unlikely to be efficient. Services for children two years and under tend to be under-priced, meaning that parents demand more services than they would if fees reflected the full cost of delivering services. </p>
</blockquote>
<p>There is never any acknowledgement that parental “choice” is seriously inhibited by the lack of services in many areas of high need. </p>
<p>The final point above is a bizarre illustration of market solutions. It assumes that higher costs would reduce demand, disposing of the problem. This fails to deal with the needs of those whose parental leave expires well before children reach the three-year-old stage. </p>
<p>Despite statements that under-twos cost twice as much as over-threes, the proposed fee for younger children is set for under-threes and so is little more than the next age group. This may be the result – albeit unacknowledged – of the lack of data on GDP-based benefits for under-twos in care.</p>
<p>Similarly, the proposed withdrawal of any government funding for non-disadvantaged children, whose primary carer has no workforce needs, makes it clear that public childcare funding is available only for economic, not social, needs. If there is no increased GDP output, there is no need for care. </p>
<p>This exclusion of children currently entitled to support entirely removes the original social functions of local children’s services as part of a community that supports families’ other needs. </p>
<p>Another economic absurdity that ignores children’s needs is the Productivity Commission’s critique of parents who fail to move children to cheaper services because of needs for relationship stability, thus undermining competition.</p>
<p>The hardline market approach is further reinforced by the punitive proposals that non-profit services lose tax-deductible donor status and payroll and other exemptions. The ill-founded assumption here is that because they often use these funds to “cross-subsidise” fees and upgrade services, they are ruining the commercial price signals – and presumably the profits of investors. </p>
<p>The above points illustrate serious flaws in the Productivity Commission’s approach. This raises issues both about the market model and the wider recommendations being offered. These issues highlight the differences between a community service model and a commercial one, as well as indicating that a pure market model doesn’t work.</p>
<p>Given that this area receives A$7 billion annually, the government should address identified market failures by devising a hybrid approach that would mix aspects of the market approach with conditional funding tied to meeting child and community needs.</p><img src="https://counter.theconversation.com/content/37849/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Many of the Productivity Commission’s proposals derive from assumptions that the funding of these services should ensure minimal interference, with a classic, market-based model for meeting “demand”.Eva Cox, Professorial Fellow Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/356102014-12-18T00:27:04Z2014-12-18T00:27:04ZWhat do Australians need in a ‘families package’?<p>There are a lot of babies around, and the numbers <a href="http://www.aihw.gov.au/media-release-detail/?id=60129550053">are increasing</a>. However, Australia does not have coherent policies that recognise the effect of parenting on workforce participation and vice versa. Parenting is still defined as a “women’s issue” so no real policies exist to make it possible for both parents to be good parents and good paid workers.</p>
<p>Treasurer Joe Hockey has given <a href="http://www.businessinsider.com.au/myefo-joe-hockeys-full-statement-on-the-budget-deficit-2014-12">signs</a> that the mix of anxieties about paid parental leave and the final version of a <a href="http://www.pc.gov.au/inquiries/completed/childcare/draft">Productivity Commission report on early childhood education and care</a> may emerge as a “holistic” families package in the new year. </p>
<p>Given anxiety about new spending, this will probably need to be within the approximately A$10 billion that current childcare and the proposed paid parental leave scheme cost combined. As the initial report by the Productivity Commission indicated a need for more money for care services, the package may not be as holistic as is needed.</p>
<h2>More time to raise the kids</h2>
<p>The first need to be addressed is the time out of paid work involving bearing, nurturing and bonding with the baby, say 12 months. Most women in paid employment are entitled to 12 months unpaid parental leave, and 18 weeks pay at the minimum wage, if they have been employed in the same place for the previous 12 months (<a href="http://www.humanservices.gov.au/customer/enablers/centrelink/parental-leave-pay/eligibility-for-parental-leave-pay">men</a> can take some time too but rarely do).</p>
<p>The current Abbott government proposal is for 26 weeks, with super, also starting with the minimum wage but then rising to replacement pay up to A$50,000. This establishes a wage-related payment which mirrors other leave payments that are currently only available to some women, particularly public servants and high-flying professionals. However many of these public servant schemes are likely to be absorbed in the Abbott scheme so will disappear.</p>
<p>Most mothers take extra holiday pay and extend their leave to take at least 12 months. The 26 weeks proposed is closer to the time mothers need than 18 weeks. The top pay limit of A$150,000 was the <a href="http://www.smh.com.au/federal-politics/political-news/tony-abbott-backs-down-on-paid-parental-leave-cap-20140430-zr1ts.html">main point of controversy</a>, so was scaled back to A$100,000, and could be scaled back even further. Were it to be set around the <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0">annual average earning of A$70,000</a>, a majority of women, including low income recipients, would do much better than they do now.</p>
<h2>Better child care options</h2>
<p>Going back to paid work with a toddler needing care is not easy. There is a serious shortage of places for under twos because new child care services mainly depend on the vagaries of private developers’ investments in services that offer the best profit margin. As staffing costs more for under twos, they are not adequately provided for. So the subsidy system needs to change so it both pays more for higher cost groups and makes payments conditional on services being provided for those children who have highest needs for care.</p>
<p>This change of funding could also ensure that other services were where they are needed and more affordable. This would be a major policy change as currently there is no contract, or even direct contact between services and funder to ensure children’s needs take priority over profits. The current system is “demand driven” which assumes that services will respond to parents’ needs as a business would a customer. However the evidence from the <a href="http://www.pc.gov.au/inquiries/completed/childcare/draft">Productivity Commission report</a> suggests far too many parents’ needs are not being met, such as affordability, hours of operation, location of services and qualifications that meet children’s diverse needs. </p>
<p>A shift to direct subsidies, where the government gives direct cash subsidies to the child care service as well as fee relief for the parents, would see a better fit between services and parental needs. This is how it operates in <a href="https://theconversation.com/pc-logic-let-the-market-solve-childcare-market-failure-29580">most other countries</a>. Proposals to cut staff ratios or their levels of qualifications are not acceptable to parents or the experts in the area.</p>
<p>Direct funding contracts would allow for more flexibility in the variety of services, maybe with outworkers connected to centre based services, rather than privately employed nannies. This type of service would protect quality of care, adequate working conditions and child safety but would need funding of administrative and support staff to keep it affordable.</p>
<h2>Controlling fees</h2>
<p>Daily childcare fees range from A$65 to A$180 and official quality ratings suggest <a href="http://www.smh.com.au/federal-politics/political-news/childcare-quality-does-not-drive-up-costs-study-20141103-11fxxl.html">quality and fees are not necessarily related</a>. So some fee agreements between funder and provider, as exist in aged care, may be the way to cut costs.</p>
<p>The role of early childhood services in the Productivity Commission’s initial response was that subsidies should only be for parents with work related needs or for children needing remedial attention, except for 15 hours per week in the year before school. This is based on economic arguments about increasing GDP, now by mothers or later by remediated children. This narrow definition denies the social and communal aspects of learning and growing for children and the needs of other children for access to the services.</p>
<p>Child care should remain a community service, not just an economic one. In the longer term, we need to take a long look at rebalancing workplace participation and child rearing, and address the time it takes to balance social and financial roles for individual, family and communal well-being.</p><img src="https://counter.theconversation.com/content/35610/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There are a lot of babies around, and the numbers are increasing. However, Australia does not have coherent policies that recognise the effect of parenting on workforce participation and vice versa. Parenting…Eva Cox, Professorial Fellow Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.