By Theresa Moore
Since the introduction by the McMahon Liberal government of the Child Care Act in 1972, government grants for child-care have become an election "carrot" used by both major parties.
Over the last 25 years, child-care service provision has increased. The Australian Bureau of Statistics' surveys show that 38,700 preschool-age children attended day-care centres in 1973, compared to 380,000 in 1993.
However, government funds have not been sufficient to cover increases in service costs. A recent study by the Brotherhood of St. Laurence into child-care affordability states: "Examination of trends in the provision of Commonwealth funds for child-care suggest that while levels of child-care assistance .... were generally indexed to accommodate inflation, this was not sufficient to prevent real increases in the cost of care over the period from 1992 to 1997.
"A price index for child-care costs, used by the Australian Bureau of Statistics in compiling its Consumer Price Index, has been rising very much faster than general inflation over the last decade ... Out of pocket costs for a full week's care in an average centre have risen by 50% in real terms for low income families ... Families with two or more children are particularly affected."
The introduction of "fee relief" for funded, non-profit centres in 1986 introduced income testing and prioritised access to services. Commonwealth child-care assistance paid to centres at a standard rate (based on parents' income) subsidised the fees of low-income parents.
In response to pressure from the commercial child-care industry, the Keating Labor government in 1991 extended child-care assistance payments to private profit centres. This resulted in a burgeoning of the commercial child-care industry at the expense of community-based services.
The numbers of child-care places in commercial centres increased from 32,296 in 1991 to 121,600 (in 2680 centres) in 1997; while those in the non-profit sector rose from 41,086 to 46,300 (in 1120 centres).
This "competition" has not led to a reduction in fees, nor has it meant that quality services are provided in response to real need. To maximise profits, commercial centres rarely provide places for children under three years old, and generally employ less qualified staff than community-based centres.
The Brotherhood of St Lawrence study noted: "Even if Australia has sufficient places to meet something like the need for care which families have, the distribution of care may not be adequate ... The availability may be greater for older age groups than for younger (that is, there is a concern that some private centres are less likely to take babies)."
Increasing costs
The pervasive use of the terminology of the market helps perpetuate the myth that government cuts to child-care are acceptable as there has been a drop in "demand". However, this is a direct result of government policies that push women out of the workforce and into the home.
In its 1996 budget, the Howard government cut $40 million from the child-care budget by: eliminating operational subsidises to community-based child-care centres; freezing the expansion of new day-care places; freezing child-care assistance; means-testing child-care rebates; limiting the number of hours of subsidised day care; and introducing the family tax incentive.
Low vacancy rates, reduced waiting lists and centre closures have been a feature nationally (affecting both the commercial and community sectors). Centres in working-class areas of Sydney and Melbourne have been the hardest hit by centre closures.
The NSW Local Government and Shires Association (NSWLGSA) submission to the Senate committee of inquiry into child-care reported this example: "Fairfield City Council reported [that] fee increases required in long-day care are 26% above their affordability benchmark ... Fairfield has reduced the level of service in eight centres.
"For Fairfield families the fee increases and changes to the nature of care have forced them to review their care options. They are i) leaving care and/or the mother leaving the workforce, or ii) reducing the number of hours used, and entering into complex alternate care arrangements."
The freeze on child-care assistance and the loss of operational subsidies has led to an estimated average increase in child-care costs to parents of $27 a week. This causes a vicious cycle of parents reducing the hours they can keep their children in day-care centres, which reduces the centres' incomes, which leads to further fee increases.
"It's all too hard. People are pulling out of work, they are just giving up", a Fairfield's children's services manager told the Sydney Morning Herald on June 22. "Last June, Fairfield's 11 centres had 46 vacancies. Now, there are 627 vacancies. Full-time care costs $173 a week."
The Brotherhood of St. Lawrence study found that parents on pensions and benefits, low-income earners, large families in rental accommodation and families with poor health were at risk of not being able to use child-care because it is too expensive.
Full-time care
The Howard government's attacks on child-care have put full-time child-care out of the reach of most working women. The SMH on June 22 gave the example of child-care centre director Melanie Baxter, on maternity leave with her second child, who would be left with $200 out of her net pay of $590 per week after child-care costs.
Baxter told the SMH: "I don't want to be paid by the government to stay at home. I went three years to university and worked for 10 years to get where I am. The government is forcing people like me to stay at home."
It the relatively affluent southern Sydney municipality of Sutherland, two commercial centres have closed or are up for sale.
Of the 96 children who have left centres operated by the council between January and May: 22 left because their parents could no longer afford it; 21 have taken the cheaper pre-school option; the parents of 18 have dropped out of the workforce or moved to part-time work; and the parents of 12 have been unable to afford care because of a second or subsequent child.
As the NSWLGSA stated in its submission: "This position is not confined to western Sydney. A group consisting of Willoughby City Council, Pittwater Council, Warringah and Kur-ring-gai Council report that the average fee increases in long-day care ranges from $20 to $25 per week. The effect on families, whilst not as pronounced as in Fairfield, is similar."
The current crisis in child-care is not an unintended consequence of fiscal policy, but a blatant piece of social engineering.
In its 1996 report on child-care, the federal government's Economic Planning Advisory Committee examined the relationship between child-care demand and pricing. It suggested that a 1% increase in fees, with no additional public support, would suppress demand in 2001 by around 10% (the same as the 1996).
That gives little joy to the 1 million parents of children under 12 years who have no access to formal child-care.