The Morrison Government's record investment in early childhood education and care is working, an independent evaluation from the Australian Institute of Family Studies (AIFS) published today shows.
The Child Care Package Evaluation Final Report examined key elements of the Government's Child Care Package and found it reduced the net cost of child care for the majority of families using care, with low and middle-income families receiving the greatest benefit.
Acting Minister for Education and Youth, Stuart Robert, said the report confirmed the Government's far-reaching reforms were delivering the intended results.
'We implemented the Child Care Package in 2018 - the biggest-ever reform in child care assistance in this country - to provide the highest level of support to those families who work the most and earn the least,' Minister Robert said.
'The institute's independent report has shown we have achieved this - and we are committed to continuing to improve the lot of hard-working Australian families by putting even more money back in their pockets.'
Some one million families are being supported by record levels of child care funding this year, with the Morrison Government investing about $10.3 billion in child care, including $9.9 billion on Child Care Subsidy (CCS) alone in 2021-22.
Mr Robert said the Government had already acted on recommendations from the report to further improve the child care system and to make it easier for families to navigate. Mr Robert said the Government had addressed workforce disincentives further by:
- Lifting the CCS from 7 March 2022 by 30 percentage points for the second child aged five or under and any younger children in child care, up to a maximum rate of 95 per cent.
- Removing the annual CCS cap of $10,655 for families earning over $190,015, from 10 December 2021 for the entire 2021-22 financial year - and beyond. Combined with the increased CCS, this means 250,000 families across Australia will be on average $2,260 a year better off.
- Made the child care system simpler and more transparent to navigate with the launch of the StartingBlocks.gov.au website. The website features a comparison checker and easy-to-use calculator for families to find the best and most affordable service for their children.
'The Government's growing investment in child care will continue to support workforce participation and reduce out-of-pocket expenses for families,' Mr Robert said.
'Around 90 per cent of families receive a subsidy of between 50 and 85 per cent, and out-of-pocket costs are still lower than when the package was first introduced.
'Almost three-quarters of all subsidies paid in 2022-23 will go to families earning under $150,000.
'The Morrison Government's investment in the CCS and improvements since are in stark contrast with Labor. Labor's reckless policy would see the biggest investment go to millionaires to the tune of up to $60,000 a year, while a low-income family earning under $70,000 a year would be better off by only $6 a day.'
Around one-quarter of families accessing the CCS earn under $70,015 and receive an 85 per cent subsidy, or 95 per cent for a second or third child aged five and under.
Minister for Government Services, Senator Linda Reynolds, said the evaluation showed the Morrison Government's Additional Child Care Subsidy was better meeting the needs of working Australian families and their children.
'Importantly, we've also cut red tape for all families getting the subsidy,' Minister Reynolds said.
'The subsidy goes direct to the service provider, so families only have to deal with paying any out-of-pocket expenses, and they don't get caught up in needless and frustrating paperwork,' Minister Reynolds said.
'We will continue to look for ways to streamline processes both for families and the more than 13,500 child care services across Australia while at the same time reducing child care costs for working families.'
Minister Reynolds said the CCS is also important for boosting women's workforce participation.
'The most recent ABS Labour Force data reveals women's workforce participation is at a record high of 62.4 per cent - higher than before the pandemic,' Minister Reynolds said.
The Government response to the AIFS final evaluation report is available here. Data collection for the AIFS evaluation was limited to the end of 2019 because of the impact of COVID-19 on families' child care use.
