KEY POINTS
- Higher attendance at childcare allows parents to return to the workforce, report says.
- Major barriers for low-income families to access childcare include out-of-pocket fees, insufficient services and long wait lists.
- Some families are forking out anywhere from five to 21 per cent of their income on child care.
Most lower income families could have their child care and early education costs covered if the government accepts recommendations that all children from birth to five receive high quality services.
A draft report from the Productivity Commission has found kids who attend early childhood education and care (ECEC) perform better at school and later in life.
Here's what else it found.
Key hurdle preventing universal childcare
Growing demand in a sector that's already chronically understaffed means universal child care can't be achieved without first addressing workforce shortages.
Commissioner Martin Stokie said expanding accessibility would require the government to address workforce shortages first.
"We will not make any progress towards a universal system without addressing the sector's workforce challenges," they said.
"Improving pay and conditions is critical but more can be done to improve career and qualification pathways."
An Early Childhood Education and Care Commission should also be created to support, advise and monitor governments' progress towards universal access.
Boost childcare hours
The commission says the government should ensure all children up to the age of five have access to ECEC for up to 30 hours or three days per week.
Specifically, the government should relax work requirements and raise the maximum rate of its from 90 to 100 per cent of the hourly rate cap for families who earn up to $80,000.
For a majority of those families, this would cover the entirety of their ECEC costs.
However, families whose children attend providers that charge more than the hourly rate cap set by the government would still face some out-of-pocket fees.
Regardless, increasing the Child Care Subsidy would benefit about one in three families with young children and increase the number of hours kids spend in childcare or early education centres by 12 per cent.
It would also lead to a 3.4 per cent increase in hours worked by single parents and secondary earners in couple families with young children, which is equivalent to an additional 20,700 full-time employees.
Access problems
The report also found higher attendance at child care allows parents, specifically mothers, to return to the workforce.
However, the families that would benefit the most from these services are using them less than average - or not at all.
Aboriginal and Torres Strait Islander children are under-represented in early education and childcare settings because services are unaffordable, unavailable or fail to offer culturally safe environments.
Associate commissioner Deborah Brennan said major barriers to access for children from low-income families include out-of-pocket fees, insufficient services in local areas and long wait lists.
Those who successfully engage with a provider are forking out anywhere from five to 21 per cent of their disposable income on child care, according to an Australian Competition and Consumer Commission investigation.
Though the number of ECEC places has risen by 50 per cent to more than one million, availability varies across the nation and services in disadvantaged communities don't meet the same standards as those in wealthier districts.
"Vulnerable and disadvantaged children benefit the most from quality early childhood education and care, but they are currently the least likely to attend," Ms Brennan said."A child's entitlement to at least three days of ECEC a week should not depend on how much their parents work."
Multibillion-dollar cost
The cost of these reforms is estimated to be about $2.5 billion a year.
The government has already implemented a number of changes to bolster the workforce and improve accessibility including subsidised childcare for Indigenous communities, increased subsidies and a multi-million dollar commitment to upskilling early childhood education workers.
Jessica Rudd, CEO of parent advocacy organisation The Parenthood, welcomed the report.
"Many of these recommendations align with our vision for a fair and accessible early childhood education system," she said on Friday.
