Missed opportunities to improve childcare have blighted both Coalition and Labor governments. Can Scott Morrison’s plans for sweeping reforms finally provide a grown-up solution? By Sophie Morris.

Scott Morrison’s kid gloves on upcoming childcare reform

Social Services Minister Scott Morrison, right, and Tasmanian MP Brett Whiteley visit an early learning centre in Ulverstone, Tasmania.
Social Services Minister Scott Morrison, right, and Tasmanian MP Brett Whiteley visit an early learning centre in Ulverstone, Tasmania.

Nine years ago, then federal Liberal MP Jackie Kelly was part of a government that splurged billions of dollars on tax cuts in a big-spending boom-time budget.

Yet she was disappointed, for it overlooked the one thing she believed should have been a priority if the government wanted to spend the surplus “wisely”. 

“Childcare needs a bit of leadership,” she told Sydney’s Sun-Herald days after the 2006 budget. “We have missed an opportunity with this budget.”

Indeed. Now Social Services Minister Scott Morrison is trying to sort out the mess that Kelly correctly identified almost a decade ago. He has to do it, though, with a lot less cash than might have been possible back in those heady days of budget surpluses, when it seemed the boom would never end.

The families and childcare package is shaping as a highlight of what is supposed to be a deliberately lacklustre budget. 

Yet Tony Abbott’s repeated promises of a “dull” budget belie the existential drama. If it flops badly, that’s it for Abbott, who has already faced one “near-death” experience in February, with 39 MPs voting against him in a spill motion with no declared rival. Another budget debacle like last year’s would finish him. So, dull it shall be when Treasurer Joe Hockey delivers the budget on Tuesday night. And, we are told, “measured, responsible and fair”. 

By then, Morrison is expected to have already detailed his families package. If he helps save Abbott by fixing childcare and finding a way to pay for it, his own stocks in the party will rise. 

His consultations since he was appointed to the portfolio in December have been extensive. Focus groups have apparently been polled on what they would consider fair, as the government strives to avoid offending anyone. An announcement of a two-year $250 million pilot nanny scheme, targeted at shift workers and regional families, has been generally well received.

1 . Unions onside

Even unions sing his praises. “Scott Morrison has tackled a problem which too many politicians have been scared to do,” says Helen Gibbons, assistant national secretary for United Voice, the early childhood union. “So far he is on the right track.”

Morrison is dealing with a system that was, as the Productivity Commission puts it, “largely designed to meet the needs of a different era and the series of incremental additions and amendments mean there is much scope for improvement”.

From the charitable creches of the late 1800s and the community-based centres of the 1970s and 1980s through to the massive industry that today attracts almost $7 billion a year in federal funding, childcare in Australia has evolved in a shambolic fashion.

In his forthright style, Morrison has already settled the question over what the government sees as the purpose of childcare.

“We’re not trying to run an education system here, we’re trying to provide a payment to help people be in work and stay in work, which means they are then participating in the economy which is good for the economy,” he said in a recent interview with Radio 3AW.

It’s a question that has shaped the childcare debate for decades: is it primarily there so parents can go to work, or to support the development of the child?

It is worth noting that Morrison has endorsed the National Quality Framework that Labor introduced to ensure centres were meeting certain standards. The government has also extended by two years the national partnership agreement with the states that provides 15 hours of preschool to four-year-olds. 

Still, Morrison is coming down firmly on the side of those who see childcare primarily as a workforce participation measure, rather than inherently educational. The government had already telegraphed this message by shifting the responsibility for childcare from the Department of Education and Training to the Department of Social Services.

The proposal to require parents to be in work in order to claim childcare subsidies has reinforced it.

For the government, the childcare overhaul will be pitched as its response to the challenge of lifting women’s workforce participation, after the Intergenerational Report identified slow progress on this. It is a more effective response than the generous paid parental leave scheme that Abbott finally dumped as his leadership came under intense pressure in February.

2 . Reservations

But Deborah Brennan, a professor in the University of New South Wales’ social policy research centre who has spent decades researching early childhood education and care, has reservations about its focus.

She welcomes Morrison’s move to simplify the complex array of subsidies and payments, but is concerned about the requirement that parents be in work to access support.

Until now, only the Child Care Rebate of up to $7500 a year has been activity-tested, not the Child Care Benefit, which goes to lower- and middle-income families.

“To me, it’s really short term to lock children out of a service because parents are not in the workforce,” says Brennan. “That is punishing children for parents’ behaviour.”

Brennan argues that it is precisely those children from disadvantaged backgrounds, whose parents are not in work, who benefit the most from childcare, and that requiring parents to work to access subsidies could make it harder for mothers returning to work.

“A lot of women, especially low-income women, move back into the workforce very gradually,” she says. “They might take a shift at the sandwich shop or a very part-time job. If we say we won’t support you until you’re working, it might make that transition harder.”

A move to limit access to subsidised care to those who are working contrasts with developments in Britain, where all three- and four-year-olds and 40 per cent of the most disadvantaged two-year-olds already receive 15 hours of free childcare. The issue has featured in this British general election, with Labour promising to extend this to 25 hours and the Conservatives upping the ante to 30 hours.

Morrison also faces calls from colleagues not to reduce subsidies to those on higher incomes. “It’s most important to protect women on low and middle incomes,” says Liberal MP Teresa Gambaro. “But there are also a large number of women on higher incomes who need childcare in order to work and, while benefits don’t need to be as high, if you take childcare subsidies away from that group of professional women, it will have detrimental effects.”

Funding was not the only problem identified in 2006 by Jackie Kelly, whose own children were then aged three and five. She felt she could see clearly what cabinet ministers could not. The system, she said, was a “shambles” that was “designed by people who didn’t use it” and needed to be rebuilt from scratch.

3 . Missed opportunities

In decades past, Brennan says, there have been several missed opportunities to design the best possible system.

One was when the shift to privatisation began under the Hawke Labor government in 1990, championed by then finance minister Peter Walsh. By moving to paying parents rather than centres, the government lost control and oversight of the real cost of care. 

The privatisation accelerated under the Howard government, with subsidies and parents’ fees underwriting the high-flying lifestyle of ABC Learning’s Eddy Groves before his childcare empire collapsed in 2008.

For-profit centres now provide about two-thirds of all childcare places and Brennan says she is not interested anymore in the old debates about private versus public. “But we do have a collective responsibility as taxpayers to consider how public funding is spent,” she says. “I think we’re spending more but not necessarily spending smarter.”

As governments have in the past decade increased subsidies for childcare, prices have risen, but Brennan says this does not necessarily reflect the real cost of care and there is a risk prices will rise again if Morrison pegs subsidies to a generous benchmark.

Back in 2006, Kelly confessed she thought Labor was offering better policy on childcare. She felt there were more working mothers with young children in caucus who were making it an issue. “I look around the party room and no women are doing it,” she said of her own team, lamenting that the then prime minister John Howard was unrealistic about women’s choices, so fixed was his belief that mothers should stay home to raise children.

Around that time, then opposition leader Kim Beazley was courting parents with his promise to “end the dreaded double drop-off” by building 260 childcare centres next to schools. But this would become another missed opportunity. In government, Labor shelved plans for all but 38 centres, saying there was already a surplus of places and it could threaten the viability of other providers in an industry still recovering from the collapse of ABC Learning.

Brennan describes this as a “tragedy for the sector”, arguing these centres could have helped integrate childcare with schooling and also served as models for benchmarking cost structures and good practices.

In recent decades there have been plenty of missed opportunities for fixing childcare. Now Morrison has his chance to prove he can make it work.

This article was first published in the print edition of The Saturday Paper on May 9, 2015 as "Morrison’s kid gloves".

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Sophie Morris is The Saturday Paper’s chief political correspondent.

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