Local, Independant and Effective

Certainty in childcare needed for rural and regional families

February 17, 2017

Independent Member for Indi Cathy McGowan says the government’s explanation of its childcare reform package fails to provide certainty for rural and regional families.

Ms McGowan said more work was needed following the response from the government to a Question tabled in the Parliament in October 2016. The question asks for information about how the planned transition from Budget-Based Funding Services would impact on rural families. (The question and answer are below.)

“The government has admitted it has not done the modelling of the impact of proposed childcare reforms on rural families using mobile childcare services (4),” Ms McGowan said.

“The reassurances from the government about how mobile childcare services will be funded in the future are neither guaranteed nor accountable in the proposed legislation,” Ms McGowan said.

“Families in rural areas who cannot use centre-based care need certainty that they will continue to have access to high quality child care,” Ms McGowan said.

“The funding for all services outside urban centre-based care has been lumped into the Community Child Care Fund (3). This is a competitive fund and there are no guidelines about how it is to be apportioned.

“The government has not done the thinking required to make this change work for rural and regional communities. There is no modelling and no plan.

“Rural and regional families are being asked to take all this on trust.

“During the transition period I look forward to providing a strong independent voice while working with the government on a clear plan for childcare for rural and regional Australia.”

Ms McGowan asked the Minister representing the Minister for Education and Training, in writing, on 11 October 2016:

(1) How will the subsidy package for Budget Based Funding Services (BBFS) under the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, (a) cater to the sparseness of population and unpredictability of utilisation of mobile children's services in rural and regional Australia, and

(b) cover the cost of operational delivery of mobile children's services in rural and regional Australia.(2) How many families are estimated to be affected by the transition to the subsidy package for BBFS.(3) What cost savings are estimated to be achieved from the transition to the subsidy package for BBFS. (4) What are the findings of any modelling that has been undertaken on the impact of the transition to the subsidy package for BBFS on mobile children's services in rural and regional areas.(5) Was a regional Australia impact statement completed for this legislation; if so, what were the findings.(6) How will families in the electoral division of Indi who are utilising the four mobile children's services in Victoria benefit from the transition to the subsidy package for BBFS.

Mr Hunt: The answer to the honourable member's question is as follows:

1. The Australian Government is committed to ensuring that BBF services (including mobiles) are well supported in their transition to the new child care system. For the first time, many BBF services will access child based fee subsidy assistance through the Child Care Subsidy (CCS) and some will also access the Additional Child Care Subsidy. For the BBF services that need it, there will also be an opportunity to access additional support through the Community Child Care Fund (CCCF). The CCCF, part of the Child Care Safety Net, will provide grants to child care services to reduce barriers to accessing child care, provide sustainability support for child care services experiencing viability issues (impacted by such factors as sparseness of population, fluctuating utilisation and the high costs associated with delivering a mobile service) and provide capital support to increase the supply of child care places in areas of high unmet demand, particularly in disadvantaged, regional or remote communities.

2. Approximately 23,000 children attended BBF services Australia wide during the four week reporting period in 2015–16. The BBF program reporting does not collect information on number of families.

3. There has been a provision made in the Budget for BBFs to receive the Child Care Subsidy and the Community Child Care Fund. This provision exceeds the anticipated expenditure for BBFs under the current system. This is not a savings exercise.

4. The Government has commissioned consultants to provide analysis on the ability of individual BBF services (including BBF mobile services) to transition to the new child care system through tailored transition reports for services. These reports will provide detailed service-specific modelling on the impact of the Child Care Subsidy (CCS), as well as elements of the Child Care Safety Net, including the CCCF.

5. A Regional Australia Impact Statement was not required, as discussed with the Department of Infrastructure and Regional Development, because the circumstances of all families, including families in regional and remote areas, were taken into account in developing the Package upon which the legislation is based. The increased flexibility for services in relation to operating requirements is expected to be particularly useful for regional and remote services where the existing requirement of a five day per week, eight hour per day service will no longer be required.

It is also anticipated that the Child Care Safety Net will have a positive impact on families accessing child care across regional and remote communities as these communities are particularly targeted for assistance under the CCCF as outlined in the response to question one.

6. The current BBF program is capped and closed to new providers. It does not have capacity to respond to changes in demand. The total funding appropriated for BBF services has remained stagnant in real terms, while funding for mainstream child care has increased steadily for many years.

The funding level provided to services is based on historic precedent, without regard to changes in the number of children being assisted. Similar services, in similar circumstances, with similar numbers of children do not receive similar levels of funding. Over time, funding has become disconnected from delivery. Some services receive tens of thousands of dollars per child per year while others have to manage on less than $100 per child per year.

The Package to be introduced in July 2018 has been designed to support a diverse range of services so that they have the flexibility to adapt to the needs of local families. As part of these reforms, families and BBF services will be able to access funding streams they have not been able to access previously. For the first time, families using these mobile services will be eligible to claim the same assistance as families using other types of child care, as BBF mobile children's services will be eligible to administer the Child Care Subsidy (CCS) on behalf of families if they deliver child care. BBF services will be working closely with their communities to ensure that families understand the opportunities available through accessing the fee subsidy, including the impact on the out of pocket expenses for families.

Additionally, the Package will support the delivery of services in areas of unmet demand, increasing opportunities for families to access child care services. The individually tailored transition reports that are being provided as part of the consultant support to BBF services, including mobiles, will identify opportunities to tailor service delivery to meet demand, for example offering more days to local families.

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