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Childcare places still come up short

By Trisha Jha - posted Tuesday, 24 February 2015

The government released the long-awaited final version of the Productivity Commission's report on childcare late on Thursday.

It makes several important recommendations for making the sector more efficient and less complex for families, but it doesn't do enough to address the shortage of childcare places.

The PC's own statistics from the Report on Government Services show that there are approximately 165,000 full time equivalent working parents who would like to increase their work commitment, but cannot because they are having trouble with the availability and affordability of childcare places.


One of the more controversial recommendations in the final report is to extend the new recommended childcare subsidy, the Early Care and Learning Subsidy, to nannies and other in-home carers-so long as they are appropriately qualified and meet the same regulatory standards as long day care and family day care.

In practice, this means at least a relevant Certificate III qualification, the same staff-to-child ratios as exist in Family Day Care (1:4 for children under school age), and all carers must be linked to an 'approved coordinator'.

This is a huge mistake. The government has always known that, since the new requirements for childcare were being developed in 2009, changes to staff-to-child ratios and staff qualifications would push up the price of childcare in long day care and family day care. My research has also shown there is little evidence of benefit for children from these costly regulations: overall, younger children fare better from having more favourable staff-to-child ratios and gain little from qualified staff; the reverse is true the older the child becomes (though there is little evidence on specific threshold effects and marginal impacts).

For outside school hours care, there is no justification for staff qualifications (after all, the point of school is for learning) and staff-to-child ratios need not exceed what is considered appropriate during the school day.

The evidence base for the National Quality Framework regulations is flimsy - so why perpetuate the existing problems by bringing other kinds of services into the tent?

There's obviously a need to make sure that government funding is only going to reputable childcare providers, but ensuring accountability for a nanny and ensuring accountability for a long day care service are two completely different things.


Qualifications in childcare are as much about signalling as they are about skills: having a qualification is a way of showing providers and parents that a potential carer is dedicated enough to their job that it is more likely they will do it well. In the absence of personal relationships and the opportunity to understand someone's character, qualifications become a proxy for information that is otherwise difficult to come by.

But if this is the case for the long day care sector (less so in family day care) it is not the case for nannies. Parents are much better placed to make judgements about the calibre of one nanny, whom they hire directly, than they are about all the staff at their child's centre. They also have the option of selecting a carer who has the right skills and attributes to meet their children's needs. Regulation, therefore, has less of a role to play in reducing information asymmetry-and therefore should not be legally mandated to the same extent.

Nannies and in-home carers should only be required to fulfil basic health and safety requirements, such as undergoing a Working with Children check and holding a first aid certificate. This is not very different to the process currently used for 'registered' carers' ability to claim a small portion of the existing Child Care Benefit, so it is not a situation without precedent.

If the government does bring the nanny sector into the same regulatory tent with the rest of the sector, it will merely replicate existing problems. And just as happens currently, the people who will lose out from this state of affairs will be parents who need to find care for their children.

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About the Author

Trisha Jha is a researcher with the Centre for Independent Studies in the Social Foundations program.

Other articles by this Author

All articles by Trisha Jha

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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