Reforms could raise childcare costs by $50 a week: report

Alison Fuller with her 21 month old daughter Amelia Lule.

”I would love to put her back in the system but we just can’t afford it” … Alison Fuller took her daughter, Amelia, out of care due to rising childcare costs. Photo: Danielle Smith

CHILDCARE costs could rise by up to 15 per cent, or almost $50 per week per child, if the Gillard government’s reforms to the sector proceed as planned, the Productivity Commission has warned.

Key findings of the commission’s Early Childhood Development Workforce report, which was released yesterday, showed that childcare workers in NSW were underpaid and 15,000 extra workers were needed across the country to cope with the new reforms.

Another 48,000 childcare employees needed to upgrade their qualifications to a tertiary level by 2013.

But the government has lashed out at the independent body saying its modelling is flawed and maintains costs will only rise by between $8 and $10 per week per child at the most.

The childcare lobby seized on the Productivity Commission report saying parents will be forced to make a choice either to leave the workforce or remove their child from care and into unregulated backyard institutions to cope with higher costs.

Under the changes to start next month, childcare centres will be required to employ more staff, who will need to have a minimum tertiary level qualification by 2014.

Centres across NSW have already phased in the tighter carer-child ratios for the under two’s category.

The commission reported that to improve the quality of care across the board, the wages of teachers and childcare workers would need to rise by at least 10 per cent.

”Commission modelling suggests that, under current cost-sharing arrangements, out-of-pocket fees for long-day care services could be more than 15 per cent higher than they would have been without the reforms,” the report said.

The Education Minister, Peter Garrett, said the commission had overestimated the cost of the government’s reforms. ”We expect any cost increases next year as a result of our quality reforms to be modest,” he said.

The minister said modelling by Access Economics predicted the out-of-pocket cost of the reforms would be about $8.67 per week per child in 2014-15.

The report singled out the NSW childcare industry for under paying its long-day care and preschool teachers as ”almost all long-day care teachers, and most NSW preschool teachers are employed on wages and conditions that do not compare favourably with those offered in the school system”.

The United Voice assistant national secretary, Sue Lines, welcomed the commission’s finding that wages would need to rise for early childhood workers, and called on the federal government to fund the sector for professional wages.

The Childcare Alliance president, Gwynn Bridge, called on the government to delay the reforms.

”The implementation must be phased in over a longer period of time to enable services to adequately skill all educators in the intent of raising quality standards and until the government can afford to fund these improvements so that all families are able to access them,” she said.

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