New research by Mandala and The Front Project indicates that if the government focuses its childcare reforms solely on increased subsidies it is likely to continue problematic trends already affecting cost and quality.
The research finds that access to not-for-profit childcare providers – who, on average, have been found to provide higher quality care with lower fees – is already drying up in high-to-mid SES areas and that trend is likely to spread to low SES areas if childcare reform is only focused on the demand-side. The reason is that for-profit providers are taking over from NFP providers as subsidies increase the pool of fees on offer.
Key findings from the new research include:
- There is currently inadequate access to childcare services in low SES areas and regional / remote areas
- In higher SES areas the research finds a pronounced trend away from not-for-profit providers and toward for-profit providers
- Pumping more subsidies into the market without addressing the current structural trend risks essentially transferring public money toward for-profit providers who are likely to continue taking over, especially in lower-SES areas that could benefit most from more NFP providers
The Front Project’s chief executive, Dr Caroline Croser-Barlow, who will appear today before the Senate’s Wage Justice inquiry, said the findings of the research should give pause to decision makers.
“If you simply pump money into the market via subsidies without conditions beyond regulatory compliance, what you will get is a market increasingly dominated by large for-profit providers. And the research tells us these large for-profits generally provide lower quality education, worse workforce conditions, and higher prices,” Dr Croser-Barlow said.
“All the focus of our debate is around subsidies, but no matter how they’re calibrated, subsidies alone mean sleepwalking into a market we don't want.”
Mandala managing partner Amit Singh said recommendations in the recent Productivity Commission would not be sufficient on their own to provide access to quality childcare and an affordable price.
“As Associate Commissioner Professor Deborah Brennan has correctly pointed out, the recommendations put forward by the Productivity Commission avoid trying to answer the question of supply,” Mr Singh said.
“The early childhood education market has very different features to traditional markets. There are any number of ways the government could shape this market and use its influence to prioritise quality providers and give them a leg-up over inferior competitors. While subsidies will remain important, intervening to prioritise quality providers could well deliver the best bang for buck.”
Contact details:
Anil Lambert 0416 426 722