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A Step Forwards and a Step Backwards: Aged Care and Childcare Reforms in Australia


Akshita Vaid

By

November 1st, 2020


In this article, Akshita Vaid investigates the reforms in Aged Care and Childcare in the recent 2020 Federal Budget.


The stark reality of the ailing aged care sector has caught everyone’s attention during Covid-19. To revive this sector and support older Australians, the government announced some relief measures in this year’s budget, which have been welcomed.

Covid-19 has only exposed what has been happening to Australia’s most vulnerable residents for years. Major problems with Australia’s aged care facilities that have loomed are chronic underfunding, inadequately trained staff, lack of personal protective equipment, and inadequate infection control.

For the past two years, more than 100,000 older Australians have been waiting to seek home care packages [1]. The aged care royal commission found that there was a pressing need to reduce waiting times for older Australians looking for in-home support. In response to the royal commission and the pandemic, this year’s federal budget unveiled that the older Australians will be supported to live at home for longer with the funding of 23,000 new home care packages at the cost of $1.6 billion [2]. While the substantial increase in-home care packages is certainly a welcoming step, there haven’t been any efforts to reduce the waiting time to 30 days and ensure that no one is prematurely forced to reside in aged care. The spending of another $11.3 million on training and support for aged care providers and carers of people living with dementia, has been greatly appreciated. But again, there hasn’t been enough spending on quality dementia care. As more than two-thirds of the people in aged care centres are living with dementia, early intervention and dementia-specific workforce training needs to be a priority [3].

Overall, this budget has laid the foundations for the recovery of aged care system but there’s a lot that needs to be done to support older Australians and their carers. Hopefully, more funding announcements would be made in future based on royal commission’s recommendations. But what is certainly worrisome and disappointing is the lack of investment in childcare which is a crucial sector of the economy.

Unsurprisingly, Australia lacks behind most of the OECD countries in providing affordable childcare, given that 27% of the Australian households’ income gets absorbed in childcare fees [4]. Even after subsidising the costs, it remains expensive and stressful for many Australian parents to send their children to these facilities.

Alongside the income drain issue, childcare costs pose a huge barrier to workforce participation, especially for women. Women are generally considered the second earners in a family and are likely to face difficult choices about whether to do paid work and by how much. A survey by the Grattan Institute shows that around 45 percent of mothers say they would go for more paid work if childcare was affordable [5].

Government’s decision to make childcare free for about 1 million families from April to July, has been a huge relief for many Australian parents who lost their jobs during Covid (Jen Jackson). Although it was a temporary measure, many parents were hoping that some reform of the Child Care subsidy (CCS) might arise out of the crisis. It is astonishing to see that this sector has been overlooked in the recent federal budget. There was nothing new for childcare providers in this budget, apart from the ongoing assistance being provided in locked down Victoria.

Many leading researchers and economists have concluded that increased investment in Childcare would enable Australia’s economy to recover by increasing female workforce participation and improving education outcomes [5]. Lowering out-of-pocket childcare costs would give women more incentives to do paid work and is a pivotal step towards reducing gender workforce participation gap. Recently, a Grattan Institute report also showed that investing $5 billion a year in early education would add $11 billion a year to the GDP [6]. There’s no denying the fact that this big spending budget has missed an opportunity to help women re-enter the workforce and boost long term GDP growth.

The universal childcare access as a response to the pandemic has attracted a lot of discussion around making childcare free permanently, as it would yield higher economic benefits through greater workforce participation. But making it free would almost triple the cost of childcare subsidy for the government which was $8 billion last year. Instead, a more feasible option modelled by Grattan would be to increase childcare subsidy to 95 per cent for low-income households, gradually reducing for families with incomes above $68000. This means that 60 per cent of the families would pay less than $20 a day per child for childcare [6]. There’s an urgent need more than ever now for the government to consider all these crucial arguments and invest in early education.

• References:

[1] V. Elias, “It’s a neglect’: more than 1,00,000 older Australians waiting for approved at-home care,” The Guardian, July 21,2020. [Online].Available:   https://www.theguardian.com/australia-news/2020/jul/21/it-is-neglect-more-than-100000-older-australians-waiting-for-approved-at-home-care. [Accessed Oct. 10,2020].

[2] Australian Government Department of Health, Budget 2020-21: Aged Care – more Home Care Packages. [Online]. Available: https://www.health.gov.au/sites/default/files/documents/2020/10/budget-2020-21-aged-care-more-home-care-packages.pdf. [Accessed: Oct. 9,2020].

[3] Dementia Australia, “Dementia still not receiving the dedicated attention it deserves,” Oct. 7, 2020. [Online]. Available: https://www.dementia.org.au/about-us/media-centre/media-releases/dementia-still-not-receiving-dedicated-attention-it-deserves. [Accessed: Oct8, 2020].

[4] Jackson. J, “Quality childcare has become a necessity for Australian families, and for society. It’s time the government paid up,” The Conversation, Feb. 16, 2020. [Online]. Available: https://theconversation.com/quality-childcare-has-become-a-necessity-for-australian-families-and-for-society-its-time-the-government-paid-up-131748. [Accessed: Oct. 9, 2020].

[5] Lucas, F. “Peak bodies announce to budget announcement – a missed opportunity to support ECEC,” The Sector, October 7, 2020. [Online]. Available: https://thesector.com.au/2020/10/07/peak-bodies-respond-to-budget-announcement-a-missed-opportunity-to-support-ecec/. [Accessed: Oct. 8, 2020].

[6] Wood, D., Griffiths, K., Emslie, O. & Cheaper Childcare, A practical plan to boost female workforce participation, Grattan Institute. [Online]. Available: https://grattan.edu.au/wp-content/uploads/2020/08/Cheaper-Childcare-Grattan-Institute-Report.pdf. [Accessed: Oct. 9,2020].

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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