Universal Childcare: More than saving money

Published: October 30, 2024

Blog

The Productivity Commission is set to release its final report on childcare at any tick of the clock. A draft report, released in November, proposed a universal childcare model that ensures that quality low-cost childcare is available to all Australian children. 

This universal model is familiar to Australians who enjoy universal schooling, Medicare, and superannuation.  Advocates, parliamentarians and the PM himself have endorsed the benefits of a universal approach to childcare.

It’s all about choice

Before going further, I want to address up front that some parents make a choice to undertake caring responsibilities because they value the experience for themselves and their children. This is a beautiful and valid choice and I respect all parents who make this choice for their families. The key word here though is choice. It should be a choice. For so many, choice is the missing piece when the costs or availability of childcare make it an unviable option.

The long and short of the childcare shortage

While societal expectations are changing, in the absence of adequate or affordable childcare, women are still most often the ones to pick up the caring responsibilities. This has both long- and short-term implications. They may reduce or stop work to provide care, and, in many instances, this has both an immediate and long-term impact on their financial security.

The reduction or interruption to paid work due to caring responsibilities increases the gender pay gap, it decreases women’s earnings and contributions to superannuation for retirement and can impact career progression and promotion opportunities. Economists estimate that raising children can result in a 17% loss in lifetime earnings for women.

Sadly, the very real outcomes of this financial impact can be seen with older women making up the fastest growing cohort of people facing homelessness over recent years.

For women experiencing family or domestic violence, financial dependence is also a very real barrier to leaving a dangerous situation.

Boosting childcare boosts the economy

Creating a childcare model that enables and supports those women who choose to work is a big win that goes far beyond cost savings. It boosts the financial stability and security of the individuals and their families and will likely also have a positive impact on the Australian economy.  Modelling suggests that tax revenue could be boosted by as much as $3.2 billion every year from parents able to work more hours as a result of having affordable childcare. Examples from Denmark, Germany, Sweden, and Norway, where universal low-cost childcare is available, shows high levels of participation.

Benefits of early education

There is also a huge body evidence on the positive impacts of early childhood education on children. According to the Department of Education quality early education leads to better health, education, and employment outcomes later in life and lays the foundation for lifelong development and learning. Additionally, children who attend preschool are generally better prepared to start primary school.

The arguments for getting the model right are clearly significant, but to fully implement an effective early childhood care system there is also a cultural change required. Caregiving is often undervalued, taken for granted and seen as “women’s work.” It’s fair to say that, for the most part, the true costs of caregiving are invisible.

It’s time to value care

The undervaluing of care is very clear in the early childhood sector. It is a highly gender segregated workforce – more than 95% of staff are female – and it is both undervalued and underpaid. Low wages fail to reflect the qualifications and responsibility held by early educators and, as a result, over recent years many are leaving the sector. The pay rate makes the sector unattractive to graduates with education degrees who are equally qualified for higher-paying jobs in primary schools.

In the current system, the loss of qualified staff and recruitment challenges have significantly impacted the service provision, and in turn, the families who rely on those services. Some services have been forced to cap enrolments or close their doors either temporarily or permanently. Parts of Australia, including South West Victoria, face such shortages in childcare places that they have been labelled a ‘childcare desert’. This lack of availability means that some families who could afford care, can’t access it anyway, once again limiting women’s choices.

For any model of early childhood care to work, we need to value and respect the work in order to attract people to the roles.

Historically Australia has not valued care.  As an example, the monetary value of unpaid care work in Australia has been estimated to be $650 billion, the equivalent to 50.6% of GDP. To put it in perspective, that is almost four times the value of the mining industry (13.6% GDP). My observation is that this value is not reflected in public perception.

It was heartening to see some boost for early educator wages in the Victorian State and Federal budgets recently. It is a step in the right direction and starts to recognise the value of the sector. I hope it helps to attract more qualified and passionate people to these important roles.  

Valuing the work, and the workers, goes some way to fixing the broken system. I hope that we see a positive change in the way care is valued and respected by all of us, whether that be in early childhood learning centres or in homes across the country. Let’s all recognise and respect the work of early educators, childcare workers, stay at home parents and anyone else who provides care to our under 5’s. They are, after all, shaping the young minds that will one day shape our future.

Getting the early childhood system working well means better financial outcomes for many women. Let us hope that the proposed universal early education system materialises soon and low-cost quality care for all, and the choice it enables, is not too far away.