The Australian Government should lead a coordinated effort to give every child access to three days a week of high-quality early childhood education and care, according to a Productivity Commission report.

The draft report into Early Childhood Education and Care (ECEC) finds that many families are struggling to access services due to poor availability, high out-of-pocket expenses and a lack of flexibility and inclusivity. Addressing these issues would have significant benefits for children and for women’s labour force participation.

“Vulnerable and disadvantaged children benefit the most from quality early childhood education and care, but they are currently the least likely to attend,” said Associate Commissioner Deborah Brennan.

The report recommends that the Australian Government facilitates the provision of services in markets where ECEC providers are unlikely to invest.

“Some areas of Australia have few or no early childhood education and care services. More funding will be needed to address these persistent service gaps,” said Commissioner Lisa Gropp.

The report also recommends increasing the Child Care Subsidy rate to 100% for lower income families and relaxing the activity test.

“A child’s entitlement to at least three days of ECEC a week should not depend on how much their parents work,” said Associate Commissioner Brennan.

“Providing further support for lower‑income families will ensure that cost does not prevent children from accessing education and care.”

The Commission found that many ECEC services are not inclusive or flexible enough to meet the needs of children and families.

“The system can only be universal if every child is welcome. The Australian Government should increase funding to enable the inclusion of all children regardless of their ability or cultural background,” said Commissioner Martin Stokie.

“Governments and ECEC services also need to do more to achieve the commitments in the Closing the Gap Agreement for Aboriginal and Torres Strait Islander children. That means working towards a sustainable funding model for Aboriginal Community Controlled Organisations and investing in the cultural capability of the sector.”

The report highlights the considerable and persistent workforce challenges in the sector and makes several recommendations.

“We will not make any progress towards a universal system without addressing the sector’s workforce challenges. Improving pay and conditions is critical but more can be done to improve career and qualification pathways for ECEC professions,” said Commissioner Stokie.

“A high-quality universal ECEC system is within reach. Our draft recommendations would establish strong foundations for all Australian children and expand choices for women,” said Commissioner Gropp.


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