Magazine of Socialist Action in Australia

Childcare: No relief for working families

Reading Time: 3 minutes

If there was anything in need of a total overhaul it would have to be Australia’s childcare system. This industry, which plays a vital role in caring for and educating our youngest children, is far from being universally accessible. Long wait lists, high costs, and an inadequate number of long day care centres are common issues. On top of this, sometimes people are forced to pay to stay on waiting lists!

Early childhood educators face an ongoing fight for decent wages, as they are among the lowest paid workers in the country. Ironically it is generally in the privately run childcare centres, who have enormous profits, that educators receive the lowest wages. Educators with a Certificate III qualification can be paid as low as $21.29 under the award.

While some trade union campaigns have resulted in improved conditions, including ratios and better access to further education for educators, they have done little to increase real wages. Is it any wonder that the sector struggles to recruit and retain staff?

G8 Education, which runs childcare centres around the country, recorded over $70 million in profits last year. Incredibly this figure was a 10% drop from the year before. The company blames staffing ratios for this drop. Folkestone Education Trust reported $103 million in profit, and the story is similar among other private players around the country.

The daily cost of long day care, which most working people need, has skyrocketed. It can cost up to $200 per day at some inner city private centres in New South Wales. Depending on income, families can be reimbursed a percentage of the childcare fee from the government, and must pay the rest as out of pocket expenses.

However, this subsidy is only calculated up to an hourly fee of $11.77. For families with incomes over $186,958 the subsidy is capped at $10,109 per year. If a centre charges more than $11.77 per hour, that cost is not accounted for. What is the point of the subsidy if private childcare centres are charging whatever they want?

Out of pocket

Out of pocket expenses to families have risen 48.7% in six years! Is it any wonder that many families, particularly those with more than one child, have been forced to reduce working hours due to the expense of childcare? Often, it is women who are expected to do this.

Depending on how much you earn, the childcare subsidy may cover 50-85% of cost of the hourly capped rate. While this might seem a lot, the average cost of childcare is at least $120 per long day. For a double income family earning $150,000 per year with two children, this can mean a weekly out-of-pocket expense of $600!

Last year the federal government made changes to subsidies for childcare – merging two previous rebates into one. They also introduced an ‘activity test’, meaning workers with fewer hours or families where one or both parents don’t work are less able to access childcare.

The government, in an attempt to sell their new scheme, increased overall funding by $3 billion. This year they will spend $10 billion on fee subsidies. But a significant percentage of this will end up in the hands of private operators, whose fees are not capped.

Socialists demand that childcare facilities are brought into public hands. Currently, millions of dollars are used to line the pockets of private corporations. Working people are expected to pay for a service that benefits employers. Instead of subsidising private profits, taxes should be raised on employers to fund a public system.

There is enormous wealth in society tied up in private profits. This wealth could be used to make childcare centres free, offering immediate relief to thousands of working class families. Wages for early childhood educators can be raised, and the quality of all centres improved.

Real universal access and high-quality free childcare cannot be achieved while we continue to operate in a system where profit rules. We stand for a quality public childcare system democratically managed with input from educators and families.

By Denise Dudley


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