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Budget 2018: missed opportunity on quality early learning: 8 May 2018



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MEDIA RELEASE

Tuesday 8 May 2018

Missed Opportunity on Quality Early Learning

The early childhood sector continues to be concerned about the Federal Government’s lack of clear policy objectives and investment strategy in early learning.

With the new Child Care Subsidy due to be implemented from July 2018, estimated expenditure has been revised down again from $8.7 billion (2017) to $8.0 billion (2018).

“While many working families will be better off under the new subsidy package, Early Childhood Australia remains concerned that an estimated 25 percent of families will be worse off and approximately 130,000 children may miss out altogether on critical early learning.

“We continue to urge Federal Education Minister Simon Birmingham to reconsider the activity test and increase the base level of entitlement from 12 hours to 18 hours for children at risk of being excluded.

Another missed opportunity in the Budget is the extension of the universal access to early education in the year before school (preschool funding) for just one additional year, despite strong consensus across state and territory Education Ministers on the need for a longer-term approach.

ECA and our partners on the Early Learning, Everyone Benefits Campaign will continue to advocate for the Federal Government to provide all Australian children with access to at least two days per week of quality early learning from the end of paid parental leave until transition to compulsory schooling. Australia is well below OECD averages in terms of expenditure on early learning and our participation rates are well below countries such as New Zealand, France and the United Kingdom.

The one area where Australia performs well in comparison to other countries is in having a sound, evidence-based approach to ensuring that children receive high quality education and care through our National Quality Framework. It is therefore of significant concern to ECA that the Federal Government is signaling a withdrawal from the National Partnership Agreement on the National Quality Agenda for Early Childhood and Education Care, with no further funding for state and territory regulatory authorities and just 2 years of funding for the national regulator ACECQA.

“This surprise announcement leaves the relationship between state and federal governments on the regulation of early childhood quality unclear, and we strongly urge the Federal Government to commit to the National Quality Framework and ongoing quality improvement,” said Samantha Page.

ECA is also disappointed that the Government failed to heed calls from the sector to develop a workforce strategy. Low wages and poor job security are resulting in high turn over rates, while quality standards are creating more professional roles in the sector that will become harder to fill as the current supply of qualified early childhood teachers fails to keep pace. Having cut all investment in professional development, it has never been more critical to respond to looming workforce challenges. The $6M lost from the ‘Child Care Early Learning Projects’ the Government could have been used to engage the sector in effective workforce planning, as outlined in tonight’s Health budget where substantial investments are being made in workforce planning, including demand and supply mapping to meet local workforce needs for health professionals.

ECA is the peak advocacy body for children from birth to eight years, their families and early childhood professionals.

For more information contact: Carolin Wenzel 0475 554 999 Samantha Page 0448 883 687

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Federal Budget 2018

Preliminary Analysis

Early Childhood Australia

Table of Contents

General economic outlook ___________________________________________________ 4

Education and Training Portfolio_______________________________________________ 5

Child Care Package ________________________________________________________ 5

Universal Access to Early Childhood Education _________________________________ 6

National Quality Agenda ___________________________________________________ 7

Key announcements from other portfolios that impact young children and families _____ 9

Health ____________________________________________________________________ 9

Home Affairs _____________________________________________________________ 10

Prime Minister and Cabinet __________________________________________________ 11

About us: Early Childhood Australia (ECA) is the national peak early childhood advocacy

organisation, acting in the interests of young children, their families and those in the early childhood

sector. ECA advocates for quality in education and care as well as social justice and equity for

children from birth to eight years. We have a federated structure with branches in each state and

territory. In 2013, ECA celebrated 75 years of continuous service to the Australian community.

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Overview

The primary focus of this year’s Federal Budget is personal income tax cuts and infrastructure

spending, with an eye on the Federal election next year.

There is very little new spending in early childhood education beyond the investment in the new

Child Care Subsidy, which will come into effect from 2 July 2018. Spending for the subsidy has been

revised down in 2018-19 to $8 billion (from a predicted $8.7b).

The extension of the National Partnership Agreement on Universal Access to Early Childhood

Education announced by Minister for Education and Training, Simon Birmingham in February 2018 is

reflected in the budget allocation of $429.4 million to support 600 hours of high-quality early

education for children in the year before school commencement, in 2019. It is disappointing not to

see any longer-term commitment to support preschool programs in the year before school, or a

policy response to the recommendations of the Lifting Our Game report around extending access to

two years before school. But it is perhaps too soon for the Federal and State/Territory Governments

to have finalised their direction. We know that this will be considered by the Education Minister’s

Council over the next 12 months.

ECA is somewhat concerned to learn that the National Partnership Agreement on the National

Quality Agenda for Early Childhood Education and Care will lapse from 30 December 2018 and not

be renewed. The Federal Government has committed funding to ACECQA for another two years, but

we understand that there will be no Federal funding for State/Territory Regulatory Authorities and

no State/Territory funding to ACECQA. This is of significant concern, as it is an effective reduction of

support to states and territories to undertake timely assessments and reassessments of services

across the country. We know that quality is an ongoing and important issue, and now is not the time

to be reducing support.

The area of greatest disappointment is the complete absence of any initiatives to support or develop

the early childhood workforce. Indeed, the Department of Education and Training will reduce

spending on ‘Child Care Early Learning Projects’ by $6 million from 2019-2022, which seems a lost

opportunity to put those resources to good use and engage the sector in effective workforce

planning. By comparison, the Health portfolio is making substantial investments in the health

workforce, including demand and supply mapping to inform and meet local workforce needs—which

would be very beneficial in the early childhood sector.

There are not many new initiatives in the budget for early childhood but the Government will

provide:

• an additional $11.8 million over three years, from 2018—19, to expand the Early Learning

Languages Australia (ELLA) program to more preschools and to trial the program in 2019

and 2020 from Foundation through to Year 2 in primary schools (Education & Training)

• $5.0 million over two years from 2018-19 to develop a national digital baby book to enable

Australians to use technology for supporting the vital first 2000 days of their children’s lives

(health)

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• $3.0 million over three years from 2018-19 to improve the long-term health of women and

their children, through the development of better information on healthy eating and

physical activity during pregnancy

• $2.0 million in 2018-19 to extend the Get the Facts: National Immunisation Program

• $1.0 million over two years from 2018-19 for the KIDS Foundation to provide the SeeMore

Safety program to 5000 kindergartens and preschools

• $17.5 million over four years from 2017-18 for research into women’s health and research

into maternal health and First 2000 Days to address the underlying social determinants of

health that impact a child’s early days of life

• $41.7 million over two years from 2018-19 to expand the Sporting Schools Program to a total

of 5200 primary schools and 500 secondary schools to provide free sport-based activities for

students

• $68.6 million over four years from 2018-19 to establish an Australian Centre to Counter

Child Exploitation (Home Affairs).

See ECA’s Budget media release at:

4

General economic outlook

Why does this matter?

Ø Both the Child Care Benefit rate and thresholds, and the Child Care Rebate cap are indexed to

the Consumer Price Index. The new Child Care Subsidy, commencing in July 2018, is also linked

to the CPI.

Ø Wage price growth is usually higher than inflation, and wages make up a high proportion of

the costs of delivering early childhood services.

Ø Economic growth affects the early childhood market, including the demand for early

childhood services.

Ø Early childhood education and care services contribute to productivity growth through

workforce participation and human capital development.

Overall, GDP is projected to increase and the Wage Price Index is predicted to rise; signalling wage

growth, which has been very low in recent years.

BP1 Table 2: Major economic parameters

(a)

(a) Yearly average growth unless otherwise stated. From 2016-17 to 2019-20, employment and the

Wage Price Index are through-the-year growth to the June quarter. The unemployment rate is the

rate for the June quarter. The Consumer Price Index is through-the-year growth to the June quarter.

Source: ABS cat. no. 5206.0, 6202.0, 6345.0, 6401.0 and Treasury.

Outcomes

2016-172017-182018-192019-202020-212021-22

Real GDP2.12 3/43333

Employment1.92 3/41 1/21 1/21 1/41 1/4

Unemployment rate5.65 1/25 1/45 1/45 1/45

Consumer price index1.922 1/42 1/22 1/22 1/2

Wage price index1.92 1/42 3/43 1/43 1/23 1/2

Nominal GDP5.94 1/43 3/44 3/44 1/24 1/2

ProjectionsForecasts

5

Education and Training Portfolio

Child Care Package

The last two Federal Budgets had contained major changes to Commonwealth child care scheme

through the introduction of the Child Care Subsidy (formerly the Jobs for Families Package). Now

that the package has passed the Parliament, the implementation of the package—including the Child

Care Subsidy, Additional Child Care Subsidy and the Community Child Care Fund—will commence on

2 July 2018. Predicted spending on childcare subsidies for 2018-19 has been revised downward from

$8.7 billion (Federal Budget 2017) to $8.0 billion (Federal Budget 2018). Actual spending for 2017-

18 is also below the predicted $8.8 billion (Federal Budget 2016 Portfolio Statement) at $7.1 billion

(Federal Budget 2018 Portfolio Statement). This might be indicative of slower growth in utilisation by

Australian families, due to affordability or other access issues, substantially reducing current and

future investment. It will be of interest to note the actual expenditure on the subsidy scheme this

time next year, after the scheme has been implemented.

6

Universal Access to Early Childhood Education

The National Partnership Agreement on Universal Access to Early Childhood Education supports 15

hours per week of preschool to children in the year before school. The funding has been extended

annually, and the Minister most recently announced an extension of $440 million in February 2018,

which extended the Agreement till the end of 2019. ECA welcomed the extension of funding, which

will give a further cohort of preschool children the opportunity to participate in 15 hours of early

childhood education and care through an accredited preschool program (600 hours per year) in the

year before school.

However, the annual extension of this funding agreement is a missed opportunity for the

Government, and only serves to increase uncertainty in the sector about the future of early

childhood education in the year before school, and makes it difficult for long-term planning by

service providers. To avoid the year-by-year funding and frequent negotiations with the States, the

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Federal Government could set down a long-term funding model for preschool to deliver certainty

and increase the participation of children in quality early learning.

ECA had called on the Government to support Council of Australian Governments (COAG) in

undertaking a scoping study into the provision of universal preschool access to three-year-olds —

including the gaps in service and the opportunities, the jurisdictional implementation and the

required improvement in data collection that would be required. In late 2017, we saw the delivery of

the Lifting Our Game report to COAG, which laid the foundation for ongoing work on the above

issues.

Participation targets have increased from 95% to 100% (page 35, Portfolio Budget Statement)

including 100% of Indigenous children.

The Government will provide $441.6 million over two years from 2018-19 to extend the National

Partnership Agreement on Universal Access to Early Childhood Education for the 2019 calendar year,

and to undertake the related National Early Childhood Education and Care Collection in early 2020.

The extension will support 15 hours of preschool each week (600 hours per year) for a further cohort

of children in the year before school.

Funding for this measure has already been provided for by the Government. Further information can

be found in the press release of 3 February 2018 issued by the Minister for Education and Training.

National Partnership on Universal Access to Early Childhood Education—extension

$million NSW VIC QLD WA SA TAS ACT NT Total

2017-18 37.0 35.9 26.4 13.8 8.4 2.8 2.7 1.4 128.4

2018-19 86.3 83.7 61.5 32.2 19.7 6.5 6.3 3.3 299.5

National Quality Agenda

Federal Government funding for the National Partnership Agreement on the National Quality

Agenda for Early Childhood Education and Care will come to an end on 30 December 2018. The

Federal Government has committed $14.5 million over two years ‘in support of ACECQA’s ongoing

role’. It appears that the Federal Government has not committed funds for State and Territory

regulatory authorities, and that the Commonwealth may be proposing a new model of cost

recovery. ECA understands the Commonwealth’s rationale behind this decision—that the National

Quality Framework (NQF) is now embedded and a majority of education and care services have been

through assessment and rating. However, there is a concern that this could impact negatively on

State and Territory Regulatory functions, and there may be broader ramifications on the unified

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National Regulatory System. ECA would be keen to see that a new Federal-State agreement is

forged to strengthen the National Quality Framework, so that it is able to deliver higher-quality early

education and care services for young children.

The table below indicates recent expenditure through the National Partnership Agreement:

National Partnership on the National Quality Agenda for Early Childhood Education and Care

(a)

$million NSW VIC QLD WA SA TAS ACT NT Total

2016-17 7.4 5.8 4.0 1.6 1.7 0.3 0.5 0.3 21.6

2017-18 6.9 5.4 3.8 1.5 1.6 0.3 0.5 0.3 20.3

2018-19 - - - - - - - - -

2019-20 - - - - - - - - -

Child Care Early Learning Projects—efficiencies

Expense ($m) 2017-18 2018-19 2019-20 2020-21 2021-22

Department of

Education and Training

- - -2.0 -2.0 -2.0

While the government has retained $9.6 million over four years from 2018-19 to remain available to

fund activities under the program, $6.0 million over three years from 2019-20 of uncommitted

funds for the Child Care Early Learning Projects program will be returned. (Projects currently funded

under the program will continue until their completion).

This is disappointing, given the many additional projects that could have been undertaken to

support improving children’s access to high-quality early education and care, such as a workforce

strategy, strengthening the approach to play-based learning, improving access to Aboriginal and

Torres Strait Islander children, and improving data collection and analysis for early education

outcomes.

9

Early Learning Languages Australia—expansion

Expense ($m) 2017-18 2018-19 2019-20 2020-21 2021-22

Department of

Education and Training

- 4.7 5.4 1.6 -

The Government will provide an additional $11.8 million over three years from 2018-19 to expand

the Early Learning Languages Australia (ELLA) program to more preschools, and to trial the program

in 2019 and 2020 from Foundation through to Year 2 in primary schools.

Key announcements from other portfolios that impact

young children and families

Health

Healthy Active Beginnings

Expense ($m)

2017-18 2018-19 2019-20 2020-21 2021-22

Department of Health 0.2 6.7 3.9 3.0 2.1

Australian Digital Health

Agency

- 3.7 1.3 - -

Total—Expense 0.2 10.4 5.2 3.0 2.1

The Government will provide $20.9 million over five years from 2017-18 to improve the health of

Australian women and children. Of most interest, this will include:

• $5.0 million over two years from 2018-19 to develop a national digital baby book to enable

Australians to use technology in supporting the vital First 2000 days of children’s lives

• $3.0 million over three years from 2018-19 to improve the long-term health of women and their

children, through the development of better information on healthy eating and physical activity

during pregnancy

• $2.0 million in 2018-19 to extend the Get The Facts: National Immunisation Program

• $1.0 million over two years from 2018-19 for the KIDS Foundation to provide the SeeMore Safety

program to 5000 kindergartens and preschools.

10

Investing in Health and Medical Research—Medical Research Future Fund

Expense ($m)

2017-18 2018-19 2019-20 2020-21 2021-22

Department of Health - - - - -

The Government will invest $275.4 million from the Medical Research Future Fund (MRFF). Of most

interest for young children will be $17.5 million over four years from 2017-18 for research into

women’s health, and research into maternal health and First 2000 Days to address the underlying

social determinants of health that impact a child’s early days of life.

Sport—building a more active Australia

Expense ($m)

2017-18 2018-19 2019-20 2020-21 2021-22

Australian Sports Commission 2.5 68.6 40.0 17.7 19.1

Department of Industry,

Innovation and Science

- 4.0 - - -

Australian Sports Anti-Doping

Authority

- 3.8 - - -

Department of Health - 3.0 - - -

Total — Expense 2.5 79.4 40.0 17.7 19.1

Related revenue ($m)

Department of Industry,

Innovation and Science

- 1.1 - - -

Related capital ($m)

Department of Industry,

Innovation and Science

- 0.5 - - -

Australian Sports Commission - - 0.4 - 1.2 - 0.9 - 1.3

Total — Capital - 0.1 - 1.2 - 0.9 - 1.3

The Government will provide $154.3 million over five years from 2017-18 to support the

Government’s goal of building a more active Australia. Of most interest for young children will be

$41.7 million over two years from 2018-19 to expand the Sporting Schools Program to a total of 5200

primary schools and 500 secondary schools to provide free sport-based activities for students.

Home Affairs

Australian Centre to Counter Child Exploitation—establishment

Expense ($m)

2017-18 2018-19 2019-20 2020-21 2021-22

Australian Federal Police - 9.6 17.0 16.4 15.4

Related capital ($m)

Australian Federal Police - 2.7 7.6 - -

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The Government will provide $68.6 million over four years from 2018-19 to establish an Australian

Centre to Counter Child Exploitation. The Australian Federal Police-led Centre of Home Affairs

portfolio agencies will create a hub of expertise and specialist skills needed to detect, disrupt, prevent

and investigate child exploitation. Funding will increase existing investigative, intelligence, forensic

assessment and victim-identification personnel resources by about 50 per cent. The Centre will

strengthen Commonwealth engagement of State Police and other services. This measure reflects the

Government’s commitment to ensuring the safety and security of Australian families.

Further information can be found in the joint press release of 25 March 2018 issued by the Minister

for Home Affairs and the Minister for Law Enforcement and Cyber Security.

Department of Human Services

Department of Human Services—improving service delivery

Expense ($m)

2017-18 2018-19 2019-20 2020-21 2021-22

Department of Human Services - - - - -

The Government will allocate $50.0 million in 2018-19 to reduce Centrelink call wait times, the cost

of which will be met from within the existing resources of the Department of Human Services.

Prime Minister and Cabinet

Remote Indigenous Housing in the Northern Territory

Expense ($m)

2017-18 2018-19 2019-20 2020-21 2021-22

Department of the Treasury - 110.0 110.0 110.0 110.0

Department of the

Prime Minister and Cabinet

- - - - -

Total—Expense - 110.0 110.0 110.0 110.0

The Government will provide $550.0 million over five years from 2018-19 (including $110.0 million in

2022-23) for a new five-year bilateral agreement with the Northern Territory Government on Remote

Indigenous Housing.

Funding will be provided to the Northern Territory Government to continue to provide property and

tenancy management, and to address severe overcrowding in remote communities.

Further information can be found in the joint press release of 23 April 2018 issued by the Treasurer,

the Minister for Indigenous Affairs and the Northern Territory Treasurer.