This issues paper examines the current arrangements put in place by governments to support our educational attainment: specifically in child care and early learning and schooling as Part A of two-part paper.

More specifically and consistent with the White Paper’s Terms of Reference, it considers how the current split of roles and responsibilities, and the overlap and duplication inherent in them, is contributing to pressures on the efficiency and effectiveness of our education system, and governments’ capacity to deliver better services and educational outcomes for their citizens.

CHILD CARE & EARLY CHILDHOOD LEARNING 

Introduction 

High quality child care and early learning services make a big difference to children, families and communities.

Positive experiences in the early years improve children’s long-term education and well-being. High quality child care and early learning improves performance in the early years of school and enhances children’s capacity to capitalise on later educational opportunities. Vulnerable and disadvantaged children, and those with additional needs, have the most to gain from participation.

All governments recognise that the benefits of child care and early learning extend beyond the child and their family, eventually accruing to Australia’s economy. These services can improve economic performance in the short-term (through increased workforce participation), and the longer-term (through young people and adults with the skills to adapt to changes in their lives) and reduced dependence on government services (including welfare and employment services).1

Australia’s child care and early learning sector is highly diverse, with services delivered by a mix of commercial, government (including local government) and community providers. The main service types are long day care (LDC), family day care (FDC), preschool, outside school hours care (OSHC), in-home care, and occasional care. Mobile services also operate in some rural and remote communities and some jurisdictions offer distance preschool programmes. A summary of service types is at Appendix A.

The sector is market-oriented, allowing families to choose a service and delivery model to suit their needs. Almost 16,500 Child Care Benefit (CCB) approved services and more than
4,000 dedicated preschools operated in Australia in 2012-13.2 Around half of approved services are provided on a for profit basis.3

The vast majority of Australian children benefit from a child care and/or early learning service before starting school.4 In 2013, around 1.1 million children attended an approved child care service and 98 per cent of four-year-olds (around 288,000 children) were enrolled in a preschool programme.5 Preschool programmes can be delivered through preschools attached to schools, standalone preschools, or approved LDC centres. Around 40 per cent of all children enrolled in a preschool programme are enrolled in a LDC centre.

Traditionally, the main purpose of Commonwealth involvement has been to facilitate parents’ workforce participation by subsidising the cost of child care. The Commonwealth is the major funder of the sector. It provided more than $6.5 billion in 2013-14, with child care fee assistance representing the bulk of this expenditure.7

The States and Territories have traditionally been responsible for regulating child care and early learning services. State and Territory funding focusses on child care quality and early learning. In 2012-13, the States and Territories spent around $1.4 billion (including Commonwealth funding provided under National Partnership Agreements),8 with around 80 per cent of this funding directed to preschool provision.9 Local governments also play a prominent role. They plan, manage, fund and deliver a range of children’s services, including child care and early learning.

Increasingly, the roles of different governments have become blurred, especially by the recent policies of all governments looking to incorporate educational elements into child care settings to achieve better quality care.

The Productivity Commission has undertaken an inquiry into future options for child care and early childhood learning, with a focus on developing a system that supports workforce participation and addresses children's learning and development needs.10 The Commonwealth is considering broader reforms to the sector in response to the Productivity Commission’s final report. Although there will be some overlap between the two processes, the White Paper has a unique focus on the allocation of roles and responsibilities between governments.