The Guardian October 27, 1999

Child care services:
Funding cuts hit hard

In March 1998 the the Australian Services Union (ASU), which represents 
around 200,000 child care workers throughout Australia, put a submission to 
a federal Senate inquiry into child care funding. The union warned of the 
detrimental impact on child care services of funding cuts, in particular 
those by the Howard Government. This month the ASU published findings from 
its 1999 surveys of child care services in Tasmania, NSW and Victoria.

At last year's Senate inquiry the union raised how the fundamental elements 
which underpin the provision of quality, affordable not-for-profit child 
care services were being seriously eroded.

These included the Howard Government's removal of its operational subsidy 
in 1997, the introduction of an income test on the child care assistance 
payment for school-age children, limiting the payment of child care 
assistance for non-work-related care to 20 hours per week, making only 
7,000 new long day care centre places eligible for child care assistance in 
1998 and 1999.

The result is that local government centres have been caught in a vicious 

Fees have been increased because of the removal of the operational 

Parents who can no longer afford childcare have removed their children from 
care creating vacancies.

The centres have then been forced to implement a variety of measures which 
have included further fee increases, staff redundancies, not replacing 
staff and increased casualisation.

There is concern that with staff not being replaced, and relief staff not 
being hired, there will no longer be training time for child care workers, 
taking away their opportunities for promotion and pay increases as well as 
impacting on the long term quality of care.

As budgets are tightened the conditions of workers have been compromised 
through the reduction of breaks and rostered days off.


At the time of last year's inquiry many centres had already closed. During 
the past two years, to September this year, more than 70 had closed in 
Victoria. Each week centres continue to close in metropolitan and rural 

An added burden is the former Kennett Government's Compulsory Competitive 
Tendering Legislation which forces local government to contract out 
services to the private sector, including basic community services such as 

In attempting to meet the demands and needs of low income families, local 
government has found itself under enormous pressure to meet a cost-neutral 
budget as dictated by the State's Competition Policy.

Inadequate funding is directly responsible for the large number of centres 

Unless Federal and State Governments review the current funding 
arrangements centres will continue to close at an alarming rate, warns the 

While the Federal Minister for Family and Community Services continues to 
assert that the Howard Government has increased financial resources to long 
day care services, the economic sums tell a different story. 

For example, the Productivity Commission reported that on average federal 
funding for child care per hour has fallen from $2.18 in 1995-96 to $1.97 
in 1997-98, a cut of just over 10 per cent.


The impact of reduced funding since 1997 for long day care in Tasmania in 
percentage terms per capita is higher than in the other States. With the 
closure of four of Tasmania's 15 community child care centres, the State 
has suffered a 36 percent cut to long day care services.

Parents and child care workers report that accessibility to long day care 
has been reduced due to the prohibitive cost. Many families have been 
forced to reduce their hours of formal child care and rely on extended 
family members to provide the additional hours. 

Centres have had to reduce the rostered hours their staff work. There is 
also increasing concern as to how books, toys and equipment will be 
replaced without additional government funding.

Long day care centre fees have risen in Tasmania on average by 10 per cent 
since 1997.


Local government in NSW is the biggest supplier of child care in Australia. 
Since the Howard Government funding cuts in 1997 local government centres 
have had to increase fees and reduce the amount of care available.

In NSW competitive tendering is not compulsory, as it is in Victoria. Some 
local councils have gone down this path and those centres effected are 
still having to reduce staff, work excessive hours and have greatly 
increased the use and duration of temporary staff. 

Funding by the Carr Government has offset some of the fee increases. No NSW 
local government long day care centres closed in 1999 and the survey found 
that the utilisation rate has increased, indicating that parents in the 
State are coming back into child care for the first time since the 
withdrawal of the operational subsidy.

Nonetheless, many parents who are unable to afford the payments have 
withdrawn their children from care. Eighty-three percent of NSW centres 
surveyed by the ASU have had children withdrawn from care because of the 
cost and 74 percent had experienced families reducing booked hours of care.

Centres in low income areas have had to keep increasing fees despite the 
inability of families to pay the increases.

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