Thursday, January 11, 2007

Childcare, Taxes and Corporations

Let me express at the outset that I have no personal interest in childcare at the moment. My children are too old and I have no grandchildren. However, a friend has asked me to express an opinion, and I am not shy of doing that.

Some facts:
  • Childcare in Australia has become big business. ABC Learning and Childcare Centres Australia are both large corporations, making multi-million dollar profits. Several Federal conservative politicians or leading members of conservative parties have significant shareholdings in one or more of these corporations. This is not to say that they have done anything corrupt or illegal, but the Federal Government does provide the subsidy that these corporations collect, directly or indirectly.
  • In 1991, John Howard's (Federal) government, opened up childcare to private providers.
  • In the years since 1991, the cost of childcare has risen greatly, to the point where Federal Government "subsidies" account for 60% of the fees charged.
  • Ann Mann, author of "Motherhood", researched levels of cortisol in children. Cortisol is a stress hormone (like adrenaline). She found children cared at home had high levels in the morning, which then became lower as the day progressed. Children in childcare had high levels, even in the afternoon.
  • There are mostly 2 "types" of childcare centres: community-based, and corporate.
  • Corporate childcare centres, by their very nature, must concentrate most on the shareholders profits. Part of this is to place quite restrictive budgets in its centres.
  • ABC Learning Centres, like others, receives 60% of its funding from Federal Government subsidies. This represents about 40% of its $250-$350 million income in 2005. It used a large amount of money to sponsor a national basketball team, and to buy paraphernalia from some of its players and coach. If it had no subsidies from taxpayers, it could still make $150-$200 million!
  • Meanwhile (meanly?!), childcare workers remain one on the lowest paid groups of adults in Australia.
The childcare benefit (CCB) paid by the Federal Government is supposed to make childcare affordable. It can be paid to parents at the end of the (financial) year, or as a co-payment to the provider. With the rise of corporate involvement in childcare, and the increase in fees, I'm not sure it's making childcare affordable - rather, it seems to be making corporate shareholders richer.

I believe the time has come when we must consider a system of public childcare, similar to public education. This would have the following benefits:
  • Proper government control of standards
  • Establishment of national standards
  • Improved pay for childcare workers
  • Consistency of care and programs, while still allowing tailoring to suit the cultural and social needs of local communities.
  • Using public money for public good, using public resources.
If they want a change in how childcare is delivered, parents and other voters must make enough noise in the media.

The Analyst