What do Australians need in a ‘families package’?

The government has foreshadowed they’ll announce a “families package” next year, what form should it take? AAP

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 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.

Treasurer Joe Hockey has given signs that the mix of anxieties about paid parental leave and the final version of a Productivity Commission report on early childhood education and care may emerge as a “holistic” families package in the new year.

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.

More time to raise the kids

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 (men can take some time too but rarely do).

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.

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 main point of controversy, so was scaled back to A$100,000, and could be scaled back even further. Were it to be set around the annual average earning of A$70,000, a majority of women, including low income recipients, would do much better than they do now.

Better child care options

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.

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 Productivity Commission report 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.

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 most other countries. Proposals to cut staff ratios or their levels of qualifications are not acceptable to parents or the experts in the area.

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.

Controlling fees

Daily childcare fees range from A$65 to A$180 and official quality ratings suggest quality and fees are not necessarily related. So some fee agreements between funder and provider, as exist in aged care, may be the way to cut costs.

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.

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.