More than one in three families experience difficulties affording childcare despite increased government assistance over the past decade, a new study by The Australia Institute has found.
The Australia Institute’s latest policy brief Trouble with childcare: Affordability, availability and quality, provides an analysis over a decade from 2001 to 2010 that highlights the difficulties families report with access to childcare services.
Despite the cost of childcare being an election issue in 2004 and 2007 and subsequent increases in government assistance, this paper has found a greater proportion of families were reporting cost difficulties by 2010.
This paper has found that when the federal government increases assistance in childcare funding, this assistance is quickly absorbed through rising childcare fees. This game of catch up between federal government and the childcare industry is leaving families stuck in the middle.
The Australian Council of Social Services and The Brotherhood of St Laurence have argued previously that childcare costs for low income families should be five and six per cent of disposable household income respectively. This paper found that one in five households of relatively low socio-economic advantage, who reported costs difficulties were paying over 10 per cent of their disposable income on childcare.
The paper proposes three possible policy options to address affordability:
- Redirect current funding for the CCR to managed funding of childcare places and centres in areas of highest need to maximise service affordability.
- Extend means testing to the Child Care Rebate (CCR) or combine the CCR and Child Care Benefit (CCB).
- Adjust means testing to achieve a progressive scale of the proportion of household disposable income spent on childcare costs.