[Australia] Australian Early Childhood Education and Care Reform: A Child, Gender and Business Case - Projects



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[Australia] Australian Early Childhood Education and Care Reform: A Child, Gender and Business Case


The Australian Early Childhood Education and Care (ECEC) sector is undergoing significant reform with all levels of government, the community and business recognizing that ECEC needs more attention and investment. The Australian Federal government has introduced a National Quality Framework to provide a formal base comparable to the other sectors of education, including curriculum development, improved staff to child ratios, professional development for key personnel and the requirement for higher standards of tertiary qualification, enhanced remuneration for sector professionals, tax rebates for families and a focus on financial support for the socially disadvantaged. Giving weight to the reform is the business case that investment in ECEC has significant economic benefits and returns to the community at large. This has been substantiated through research undertaken by PwC, Boston Consulting and Access Economics. The case not only supports the cognitive, health and social development of children but also addresses a significant gender issue whereby women have been effectively precluded from the workforce due to the lack of affordable and quality ECEC. Paramount to the investment decision is the child and success with that investment will bring sustainable benefits to the family, the community and business.

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Keywords: Australian education, child, reform, preschool, curriculum, business case, gender, women, diversity, ECEC, national framework, qualifications, private sector, economics, COAG, EOWA,TFR, B. Warren Stooke


Australian society from its early settlement has strongly supported publically funded education; however this has traditionally been limited to primary, secondary, vocational and tertiary education, with only minimal support for the pre-school period of a child's development. As a consequence, early childhood education and care (ECEC) has historically developed through the support of families and the private sector and this has resulted in a number of anomalies not evident in the other sectors of education. The anomalies have included: the absence of an all of government co-ordinated curriculum and national framework (until very recently), the denial of access to ECEC for the more socially disadvantaged, a significant cost burden on families to fund access (especially non working and migrant families), and a significant variance in the qualifications of employees and staffing ratios within the ECEC sector.

Despite the contrast of the ECEC sector in Australia relative to the other areas of formal education, Alison Elliot describes Australian early childhood services for children 0-5 years, as having "strong care plus education programs, which stand out internationally as models of best practice." 1

Overview of the ECEC in Australia

Approximately 13,899 providers offer early childhood education and care in Australia, and accommodate some 869,770 children. These approved providers facilitate an average attendance of 17 hours per week per child.2

Across Australia, 46% of early childhood education and care services are privately owned and operated, with the remainder shared between government and community services.3

The Business Case for Investment in ECEC

Three major research projects independently undertaken in Australia by PricewaterhouseCoopers, Boston Consulting Group and Access Economics, have all supported an economic, social and business case for investing in ECEC. Their collective findings accord with the view taken by Nobel Prize winning economist James Heckman of the University of Chicago, who concluded in his research on ECEC that:
"Recent studies of early childhood investments have shown remarkable success and indicate that the early years are important for early learning and can be enriched through external channels.... Early childhood investments of high quality have lasting effects.... We cannot afford to postpone investing in children until they become adults, nor can we wait until they reach school age--a time when it may be too late to intervene. Learning is a dynamic process and is most effective when it begins at a young age and continues through adulthood." 4

PwC in its major ECEC work, stated that - "..the creation of an integrated early childhood education and care system is one of the key issues for Australia's social and economic development into the 21st Century." 5

Boston Consulting Group, similarly concluded in their research that - "There is good evidence from trials and long term studies around the world that investment in basic early childhood services more than pays for itself. For the average Australian family, these services form an essential component of choices about their children's cognitive, social and emotional development, as well as enabling parents to rejoin the workforce. Furthermore, evidence from other countries suggests that a more intensive, integrated 'recipe' of services significantly enhances the long-term prospects of more vulnerable children." 6

So, just what are these economic benefits? A report to the New Zealand Ministry of Education found that - " ..public spending for ECE programmes will result in good returns in terms of maternal employment, higher levels of the participant's lifetime earnings, reductions in usage of special education services, lesser criminal activity and reduced use of social services that are expected to have a flow-on effect to the economy." 7

Australian Government Reform Initiatives

Consistent with the identified economic and social benefits of investing in ECEC, the Council of Australian Governments (COAG) 8 in 2007 recognised the need for a reform agenda in early childhood development and requested a panel of experts to examine three key issues:

  1. A vision for an integrated and seamless system of licensing, regulation and accreditation within a national quality framework for ECEC services;
  2. Options for quality standards for application in ECEC settings; and
  3. Approaches for a quality rating system for ECEC services.

As a result, the Australian government has introduced a National Quality Framework (NQF) which was implemented from January 2012. The NQF has several key objectives,9 including:

  1. To ensure the safety, health and wellbeing of children attending education and care services;
  2. To improve the educational and developmental outcomes for children attending education and care services;
  3. To promote continuous improvement in the provision of quality education and care services;

An important reform has been the formal introduction of improved staff-to-child ratios in long day care and pre-school to enhance the quality of interactions between the child educator and the child. The mandated ratio for children 0 to 24 months is 1:4, for 25 to 35 months it is 1:5 and for 36 months to school age it is 1:11. According to Early Childhood Australia, the improved ratios have already demonstrated improved health and safety, more effective learning and even a lower risk of infection among young children.10

Further, where a provider has 25 or more children in their care the provider must have in attendance a degree qualified teacher and where there are less than 25 children a degree qualified teacher must be engaged some of the time. The NQF now also requires that at least 50% of the professional staff engaged in ECEC must be diploma qualified. These changes markedly shift the emphasis in ECEC to education as a primary activity of ECEC.11

The new ratios and higher professional staffing standards will generate a higher quality of care and will support the enhancement of the relationships that are critical to a young child's development.

Additionally, the Council of Australian Governments (COAG) has committed that by 2013, "all children in the year before formal schooling will have access to high quality early childhood education programs delivered by degree qualified early childhood teachers, for 15 hours per week, 40 weeks of the year, in public, private and community-based preschools and child care."12

Professional Staff Qualifications and Remuneration in ECEC

A critical issue for ECEC is the need to lift the remuneration of its professional staff. It is no longer acceptable that staff in this female dominated sector continue to be underpaid relative to their counterparts in the other sectors of education. In this regard, the median salary for an ECEC employee ranges from $36k to $53k per annum, compared to a primary school teachers' median salary of between $45k and $71k per annum.

Fair Work Australia recently considered matters pertaining to the social, community and disability services industry in Australia, which includes employees in ECEC. The case placed an emphasis on disparities in rates of pay in this sector relative to other state and local government employees. After months of submissions, Justice Guidice commented - "In this decision we have concluded that for employees in the Social and Community Services (SACS) industry there is not equal remuneration for men and women workers for work of equal or comparable value by comparison with workers in state and local government employment. We consider gender has been important in creating the gap between pay in the SACS industry and pay in comparable state and local government employment." 13 This case has recognised a long standing anomaly and now provides a platform upon which to rectify that anomaly.

Regardless of the setting in which the child is located, an important indicator of quality lies in the skills and qualifications of the teacher involved.14 On this basis there is evidence that "early childhood teacher education capacity in universities will 'need to be increased dramatically - and quickly' if universal preschool education is to be implemented." 15  

The Cost of ECEC

Given that the private sector is well entrenched in the provision of child care services within Australia, with some 80% of centre-based formal ECEC, then it can be expected that governments will be reluctant to enhance their contribution through further direct entry into providing these services. More appropriately, Australian governments at the Federal, State and Local level are likely to continue to provide partial funding to families and parents, on a means tested basis. Such financial payments are now well established through the Australian taxation system, in the form of rebates, child care payments and other legislated policies that support paid parental and maternity leave. The Federal Government pays 50% of child care costs (after deducting any childcare benefit that is received) and that benefit is currently capped at $7,500 per child.16 This benefit represents approximately one third of the annual cost of a child in long day care, with the balance of funding placing a significant impost on most families and in many respects has the effect of excluding children from the lower socio-economic group in Australian society from accessing ECEC, unless the family qualifies for government direct support.

How Does Gender Impact on ECEC?

The provision of quality ECEC services runs hand in hand with the current debate on gender equality and the need to provide more quality support for working mothers and their children. In this regard, the reality is that women comprise 57% of Australia's currently graduating university students and women overall make up 45% of the total workforce, with a current workforce participation rate of 74% for the 15 to 65 years of age group.

Australia's current total fertility rate (TFR) of 2.0 is higher than the fertility rates in many OECD countries, including Italy, Germany, Japan and Canada, and is well above the OECD average of 1.68 (2007 data). It remains below those for New Zealand (2.18 in 2008) and the United States (OECD estimate of 2.12 in 2007). The Australian TFR is likely to continue over the next two decades. This means a continuing strong demand for ECEC and a compelling argument for future ECEC investment.17

Australia can expect that there will be an increasing dependency upon women to sustain business and the public sector workforce in the future. The Australian Stock Exchange recognised this reality in its decision to require the top 200 listed companies to annually report on their diversity and gender equity initiatives. As such, many of Australia's leading companies now have well entrenched policies and practices that support working mothers amongst other initiatives, and this includes paid maternity and paternity leave, flexible hours of work, child care support and in some cases direct provision of facilities on a shared corporate basis. Australia is rapidly emulating the Scandinavian model, which has an overwhelming community and government support base. To support this argument, Helen Conway, Director of Australia's Equal Opportunity for Women in the Workplace Agency (EOWA) stated - "It seems very odd to me that we spend all this money educating women and then we don't utilise it and we also have skills shortages in certain occupations." 18

A Sustainable Future for ECEC

In conclusion, it is evident from the recent reforms that a momentum for real change is taking place in Australia and that both government and business recognise the benefits of affordable and quality ECEC. Paramount to the investment decision is the child and success with that investment will bring sustainable benefits to the family, the community and business.


1 Elliott, Alison. "Early Childhood Education: Pathways to quality and equity for all children", Australian Council for Educational Research. 2006. p 54.

2 Early Childhood Australia, "Our Future on the Line - Keeping the Early Childhood Education and Care Reforms on Track", 2011

3 Access Economics - "An economic analysis of the proposed ECEC NQA", July 2009

4 Heckman, James. "Policies to Foster Human Development," working paper 7288, National Bureau of Economic Research, Cambridge, MA. 1999 pp. 22 and 41

5 PwC - "A practical vision for early childhood education and care", March 2011

6 Boston Consulting Group - "National Early Childhood Development Strategy" Report to the ECD Subgroup of the Productivity Agenda Working Group, COAG, 25 September 2008.

7 New Zealand Council for Educational Research - "Outcomes of Early Childhood Education: Literature Review Report" prepared for the Ministry of Education by Linda Mitchell, Cathy Wylie, and Margaret Carr, May 2008.

8 Commonwealth Heads of Government (COAG) Meeting 2007

9 Guide to the National Quality Framework, ACECQA, October 2011

10 Early Childhood Australia, "Our Future on the Line - Keeping the Early Childhood Education and Care Reforms on Track", 2011

11 Ibid

12 Dowling, A and O'Malley, K. ACER, "Pre-school Education in Australia", 2009. Page 1

13 Fair Work Australia, Full Bench Decision, Equal Remuneration, 2700, 19 May 2011

14 Australian Bureau of Statistics 4232.0, 2007

15 Dowling, A and O'Malley, K, ACER, "Pre-school Education in Australia" December 2009

16 Australian Government, Family Assistance Office www.humanservices.gov.au

17 www.treasury.gov.au Intergenerational Report 2010

18 Knowledge@Australian School of Business, 27 September, 2011

B. Warren Stooke;
Warren Stooke is a specialist consultant in Industrial Relations and Business Economics and former General Manager with Shell Australia. He is currently a member of the ExxonMobil Project Leadership Team undertaking an Oil and Gas development in Australia and his other clients include Toyota, Alcoa, and Billiton Mitsubishi Australia. He was an active member of the Adult, Community and Further Education Board in Victoria for 9 years and is currently a strategic advisor to Business Professional Women International on women’s empowerment. He supports gender equity and the advancement of the business case for investment in quality childhood education and care and is committed to bringing his diverse business and community experience to the advancement for children.