The ABC of child care politics

Australian Journal of Social Issues, Winter, 2007 by Deborah Brennan

The care and education of children below school age is a topic of intense public debate and policy innovation around the world. Child care raises complex philosophical and policy issues, ranging from broad questions about the relative responsibilities of state, market and family to technical aspects of policy design such as the interaction of child care subsidies with income support, family payments and taxation. Countries are finding new ways to address the growing need for child care and to deal with the associated challenges of maintaining quality and affordability (OECD 2001, 2006). A shift towards market-based provision is apparent in many countries. This paper explores the political choices made and the interests served by developments in the funding and provision of long day care (1) for children below school age in Australia under the Howard government. It focuses on three issues: (i) the growth of private, for-profit services; (ii) the adequacy of regulations and standards; and (iii) the cost of care. The paper argues that the growing dominance of a single corporate provider of child care services is unique to Australia and may require a more robust approach to regulation and quality control. There are continuing concerns about quality and affordability and considerable disquiet about the extent to which public subsidies underwrite the profits of corporate child care providers.

Background

Australia has long had a 'mixed economy' in child care services. Philanthropic organizations provided care for the children of working mothers from the late nineteenth century. The Victorian Creche Association (established in 1905) and the Sydney Day Nursery and Nursery Schools Association (established in 1932 and now known as SDN Children's Services) took the lead in developing non-profit care. Private for-profit services operated in addition, but often in the shadows. Although not a lot is known about the origins of private care, it has been a significant component of overall provision for many decades. A survey of child care undertaken by the Women's Bureau of the Commonwealth Department of Labour and Industry in the late 1960s, showed that there were forty non-profit centres run by philanthropic organizations and 520 services run as private businesses (Women's Bureau 1970). Most of these were not child care centres in today's sense of the term; rather they were home-based childminders registered with State child welfare departments. In introducing the Child Care Act in 1972 the Commonwealth government accepted the advice of the Australian Pre-School Association that good quality, developmentally appropriate care (as distinct from custodial child-minding) was best provided in child care centres under the auspices of non-profit organisations. This view was enshrined in the Child Care Act which directed Commonwealth funding exclusively to non-profit organizations (Brennan 1998: 67). Recurrent subsidies were paid on the basis of the number of qualified staff required to meet the regulations in each State and Territory, thus establishing a direct link between government subsidies and the payment of award wages. In the mid-1980s, the Labor government replaced subsidies linked to wages and qualifications with per capita payments in respect of each licensed place, supplemented by fee assistance to needy families. At this stage, Commonwealth funding was restricted to non-profit providers. A major shift occurred in 1991 when the government extended fee assistance to the users of private, for-profit care. Previously, both Labor and Liberal governments had, at least implicitly, viewed publicly funded, high quality child care as a merit good which benefited the community at large as well as individual children and their families. Child care was seen as an important element in campaigns against poverty, especially child poverty.

   ... Australian governments do much to improve the prospects of the
   less advantaged child, by providing free or subsidised schooling,
   medical attention, and so on. Increasingly, because of community
   expectations, there is a need to do more to assist the child in the
   pre-school ages. Funded childcare is an integral part of that
   increased effort on behalf of children (Anstie et al. 1988, 28).

The decision to extend public subsidies to users of private, for-profit care rather than to expand the supply of non-profit care took place in the context of a broader shift towards the 'marketisation' of human services including health, education, aged care and employment services (Keating 2004: 75). The emergence of a more individualistic, rights-oriented society, concern about the rising costs of services in the face of escalating demand, and pressures to increase the efficiency and effectiveness of government expenditure all contributed to this trend in Australia (Keating 2004: 78-79). In relation to child care, two main arguments were adduced in support of a greater role for the private sector: the need to bring additional capital into the sector to expand and upgrade the supply of services and the claim that withholding fee subsidies from the users of private, for-profit care was discriminatory. The former argument was strongly promoted by Labor's Finance Minister, Peter Walsh, who argued for 'a means-tested voucher system which would ... remove child care from the public sector and send it back to the private sector' (SMH 22 September 1987). The Federation of Child Care Associations supported this view and coupled it with the argument that the employment of unionised workers with 'unnecessarily high' qualifications was a factor in the high cost of child care.