12 November 2019
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We need 21st Century thinking for childcare

Fi Bendall
20 May 2019

Regardless of who is in power, childcare is one of the biggest policy challenges facing the government. It’s a complex area with lots of moving parts and numerous stakeholders. It’s also an emotive area because it involves the care of our children and has a massive impact on the finances of so many Australian families. Successive governments have tinkered with it to varying degrees of success and failure.

Most parents will tell you that childcare, despite the rebates and government subsidies, is still an onerous financial burden. For many women (and it’s mostly women), being able to access childcare means they can return to work but will come out financially only marginally better off than they would have been staying at home. 

For others, it’s just not worth it. These are the women who drop out of the workforce entirely, leave careers, and end up paying the ‘motherhood penalty’. They fall behind in lifetime earnings, retire with less super, and often find it extremely difficult to return to the workforce at anywhere near the level they were at upon leaving to have a child.

Of course, parents are crying out for affordable childcare. But they also want quality. At the moment, most parents would tell you they are happy with the quality of the care, but at what financial cost?

Does the government drop regulatory requirements and open the industry up to more competition, putting the big operators on notice, or does it continue to pump subsidies in the vain hope of keeping prices for parents down?

Or does the government need to find a disruptive solution that manages to tick all the boxes for children, parents, childcare centre operators and childcare workers?

The depth of feeling on this issue has been palpable during the federal election campaign. In parent and community groups on social media, opinions and views have run hot. One of Australia’s best-known ‘mummy bloggers’ Adele Barbaro catalysed much of this passion in one of her Facebook posts:

The discussion thread that followed her post was packed with parents sharing their experiences and talking about the choices they’ve had to make. It’s hard to summarise or pick out specific comments because they each tell their own story, but the overwhelming sense is that many parents feel they are being gouged by the operators, who seem to up fees when subsidies to them are increased. There was also almost universal respect from the parents who posted for the childcare workers and educators looking after their children, with the general consensus that these people were still not being paid enough for the great work they do.

Beyond the immediate and important concerns of cost and quality, it’s also essential to consider the long term ramifications of childcare as an educational service that is preparing our children for schooling and, indeed, life. Children absorb so much in those formative early years. There is a strong social and economic argument to be made that quality, affordable childcare lays the foundations for future academic success as well as socialisation.

In addition to this childcare enables women to either return to their careers in a full-time or substantive part-time capacity, which means businesses don’t lose these talented women from their ranks, and these women can continue to develop their careers. That’s a massive win for women as well as the economy.

Other countries are grappling with childcare too. In many ways the US is even further behind than Australia, the UK and Western Europe. As columnist Matt O’Brien writes in the Washington Post, “At this point, it seems pretty clear that our 20th-century institutions are failing our 21st-century families...it seems like the fact that our educational system wasn’t set up with dual-earning households in mind is a big part of the problem.”

Like the US, policy discussions in Australia on childcare still seem to be stuck in a 20th Century mindset. We’ve seen so many industries overturned by new ideas and disruptive thinking, why not childcare? What can the government learn from the innovations in platform business models that have occurred in areas like transportation (Uber), accommodation (Airbnb), and entertainment (Netflix, Spotify)? Can any of these lessons be applied to the childcare industry?

At the moment, the main thrust of the debate about how childcare provision can be improved runs along the old regulate vs deregulate axis. This is largely what came out of the Productivity Commission’s Childcare and Early Childhood Learning inquiry from 2014. But are we missing something in this puzzle? Do we need a more radical approach to fix this problem? What would a truly customer-centric approach to childcare yield?

There are definitely worse places to start than by listening to what consumers want from a service. Maybe the best thing the federal government can do about childcare is to listen to the likes of childcare consumers like Adele Barbaro and other mums and work from there.

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