22 September 2010

Does Canberra need cheaper childcare?

| emd
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The ACT Business Woman of the Year for 2010, Kate Sykes, has told ABC News that the Federal Government needs to implement policies that make childcare cheaper. With childcare centres costing over $75 per child, per day in Canberra, it’s not hard to see why a parent with a low income job struggles to justify their return to the workforce. Particularly if they have more than one child under school age. That is, if you can actually get childcare. I am an employer myself, and most of the parents who work for me find it easier to just bring the kids to work than to wait forever on childcare waiting lists. And it’s not just a women’s issue – men are now eligible for paid parental leave from 2011, which means more men may soon be considering “return to the workforce” issues.

Kate Sykes isn’t just an opinionated woman spouting off. She actually knows a few things about childcare and women getting back into the workforce. She is the owner of CareerMums, a specialist recruitment service for women getting back into the workforce after having children. She has also written manuals and guides for large workplaces wanting to implement family friendly work practices. And she is chair of Canberra Business Council’s workstyles committee, promoting flexible workplaces. And with Kate Ellis as the new Minister for the Status of Women, as well as Minister for Employment Participation and Child Care, perhaps this is a good time to be talking about Federal policies on childcare costs.

The question is, do you agree with her? I know I do! But I don’t want cheaper childcare at the expense of cutting childcare workers wages. I believe they are already underpaid given the years of tertiary study and level of responsibility they have.

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screaming banshee8:00 pm 08 Oct 10

Not the only area that needs to be reviewed gg, we have become a middle-class welfare nation and its got to stop.

For heavens sake if all the stupid welfare was binned, not only would the govt save those dollars, but the dollars spent in administrating the systems. All these savings could go into tax reform which could be structured in most cases to leave middle class disposable income about par and relieving pressure on low income earners.

georgesgenitals2:31 pm 05 Oct 10

I think we should remove the non means tested rebate, because there are families (like mine) getting a benefit who really don’t need it. The government sends us about 8 thousand bucks a year for having our little guy in childcare, and this could be much better used to help support lower income earners.

sepi said :

Of course everyone who has their kids in childcare only has to work to support smoking and a mcmansion.
Silly me.

Yes, just like everyone who doesn’t have their children in childcare are stuck-up snobs with holier-than-thou attitudes. Silly you indeed.

Of course everyone who has their kids in childcare only has to work to support smoking and a mcmansion.
Silly me.

screaming banshee10:51 pm 01 Oct 10

colourful sydney racing identity said :

Well aren’t you in a lucky priviliged position.

If you mean by making sure we can afford not to put our kids in childcare then yes I guess that I am.

On the other side I drive an old van, our house is quite small and in dire need of an update and our one and only television is a mere 32″. We rarely eat out and probably haven’t spent more than $200 on clothes for ourselves all year.

It all comes down to priorities, if you prefer to spend your money buying a big car, big house, and big TV and going out/drinking/smoking lots then dont come whinging to me about childcare being expensive.

We could make childcare more affordable by adding a new tax to childless dual-income couples. How’s that for expressing socialist ideals through the capitalist system?

Of course, in keeping with the yet-to-be-proposed “2 child per family” population policy, the cheaper childcare would only apply to the first 2 children. After that you’re on your own.

Just remember to ask the important question: “Where’s the money coming from?” It should cost $100/day for childcare, assuming you want childcare workers to stay in the industry and not move to somewhere where they’re paid for their skills. $100/day from 10 children covers the salary of the carer, the workplace expenses, insurances and temporary employment of replacement workers when the employee goes on leave/is sick/quits this crappy job looking after everyone else’s snotty-nosed brats.

Would you look after 10 children for a salary of $30kpa?

One way of making childcare more affordable is to reduce the cost of a mortgage, for example taking negative gearing away from investors and giving it to owner-occupiers. But that’s a different troll topic for a different troll thread.

There is ‘family day care’ which is daddy daycare type care for up to 5 kids in someone’s home.

Homes have to be inspected for safety, etc.

The ratio of children to carer is about to be reduced from 5 to 4, so i imagine less of these will be around soon as well.

The government seems to be tackling all the wrong things with childcare – obsessing about carer’s qualifications, and making life harder for family day carers is only going to make the chronic childcare shortage worse.

The main reason for working for a lot of people is to retain a decent part time job, for the future.

Winning a part time job is almost impossible, especially after years out of the workforce.

I don’t think non-working parents are using up that many childcare spots.

Genie said :

2. If you cant afford to put your kids in child care, stay at home with them. I used to work with a chick who spent her entire after tax income on child care, what was the point !?

relevant and contemporary work experience to abet her cause for future promotion?

1. Child care workers only earn about $30-35k a a year.

2. If you cant afford to put your kids in child care, stay at home with them. I used to work with a chick who spent her entire after tax income on child care, what was the point !?

3. Childcare could be significantly cheaper if the government would approve people to have centres in their own home. (eg Daddy Day Care style for up to 10ish kids)

4. See about having both parents work part-time

5. Expel all the kids from day care for parents who DONT work ! Harsh I know, but if you dont want to get off your dole-bludging arse and work, dont about Centrelink further by getting them to put your kids in daycare.

colourful sydney racing identity10:50 am 24 Sep 10

screaming banshee said :

Jim Jones said :

Most people can’t afford to do that anymore. I’d certainly prefer to be a stay at home dad.

Most people choose not to afford that anymore.

We’ve chosen for the wife to look after the kids and its so great that she can spend days taking them to playgrounds, playgroups, story time, swimming lessons and much more.

I cant imagine how it must be to have your kids know their day-carer better than they know you.

Well aren’t you in a lucky priviliged position.

In response to your comment ‘I cant imagine how it must be to have your kids know their day-carer better than they know you’, get stuffed.

sepi said :

I can’t imagine how it must be for the kids to know the wife so much better than they know you.

I can’t imagine what it must be like living in such a deluded middle-class bubble that you could believe that all families can live on a single income.

Seriously, get your head out of your ass, screaming banshee. That’s not only profoundly ignorant, it’s deeply deeply offensive: “I can afford to raise children with a single budget, so everyone who can’t is just being selfish.”

What an appallingly self-righteous attitude.

I can’t imagine how it must be for the kids to know the wife so much better than they know you.

screaming banshee9:03 pm 23 Sep 10

Jim Jones said :

Most people can’t afford to do that anymore. I’d certainly prefer to be a stay at home dad.

Most people choose not to afford that anymore.

We’ve chosen for the wife to look after the kids and its so great that she can spend days taking them to playgrounds, playgroups, story time, swimming lessons and much more.

I cant imagine how it must be to have your kids know their day-carer better than they know you.

I think posters also need to take into account before/after school care and vacation care.
Vacation care on average is $500 for the two weeks, before/after school care can be anywhere from $18-$22 each day, each time the service is used and with the Centrelink cap on child care rebate sitting at $7500 on the website (with a disclaimer of subject to the passage of legislation), parents aren’t getting that much back.
Add in the expense of fuel driving to and from work via day care facilities and the rising cost of parking, it doesn’t make for very inviting prospects.

Um, whatever happened to someone like, you know, staying at home and looking after the little tacker?

Most people can’t afford to do that anymore. I’d certainly prefer to be a stay at home dad.

And nearly a third of the fantastic 150.00 a week salary goes on parking…

And while it is hard for 9-5 workers to deal with childcare, it is impossibe for women on shifts, like nurses.

Daycare is scarce in Canberra and is only available for full days, on the same days every week. And for that you have to be on a waiting list for a year and ring them constantly to see if you have a spot.

And yet somehow, the daycare workers earn a pittance. The whole system stinks.

sepi said :

Aidan – try the figures with daycare at 100.00 a day.

Give the parents a bit more income – one on 97 thou, the 3 day a weeker on 45 thou. = no ccb at all.

3 kids.

1 of the kids in 5 day care, as this was the only spot available.

You are eligible for $22.70/week for each child (according to the calculator), $34.90 for the 5 day a week child (not sure about that if they don’t actually go for all 5 days).

So you’re out of pocket $842/week (which is more than the “extra” income after tax – $724/week), but you get $421/week back from the rebate. Overall you’re better off by $303 a week.

If the second parent didn’t work, but stayed at home and looked after the kids, they would be eligible for $301.14/fortnight ($150.57/week) in family assistance. So overall, by working 3 days a week you’re better off by $153/week.

Hmmmm ….. not a straightforward decision. School is looking pretty inviting right now eh?

sepi said :

mortgage requiring 2 incomes did away with stay at home parents.

This is something of a circular argument, since houses would cost less if there were fewer two-income families.

Um, whatever happened to someone like, you know, staying at home and looking after the little tacker?

That is what we’ve chosen do, but it has meant my wife is out of the workforce for 12 years. Not a simple “take a couple of years off” scenario.

Aidan – try the figures with daycare at 100.00 a day.

Give the parents a bit more income – one on 97 thou, the 3 day a weeker on 45 thou. = no ccb at all.

3 kids.

1 of the kids in 5 day care, as this was the only spot available.

Thumper – mortgage requiring 2 incomes did away with stay at home parents. Also the requirement to go back to work to retain a job for later on.

Growling Ferret12:53 pm 23 Sep 10

Um, whatever happened to someone like, you know, staying at home and looking after the little tacker?

The 400k mortgage to buy a 3 bedroom townhouse in Banks.

sepi said :

I wish the govt would do away with some of these subsidies and just give the money to the child care centres.

Most public servants earn enough to not get CCB benefit, and are paying full price for childcare. For more than one child, this means many women are working just to keep their jobs, rather than for any income. Pretty depressing really.

Is this really the case?

There is an excellent child care estimator to get some handle on the costs involved.

I’ve put in a couple of scenarios to see how they play out:

Scenario A:

Spouse works full time, earns $70K. Mother returns to work 3 days a week, earns $30K. One child in long day care, 10hrs/day, $75/day.

CCB = $43.72/week
Out of pocket expenses = $181.28/week

Child Care rebate = $90.64/week

Total cost of childcare = $90.64/week = $30/day

Extra income earned from working ($30k pa) = $26400 (after tax, not including other deductions) = $508 / week.

So, crudely, this person would be $410 / week better off (Not taking into account reduction in family assistance).

If the mother does not return to work she is eligible for $187.60 / fortnight in family assistance (Part A = $51.24, Part B = $136.36)

This is $93.80/week. So she is still $316/week better off.

Scenario B:

Spouse works full time, earns $70K. Mother returns to work 3 days a week, earns $30K. Three children in long day care, 10hrs/day, $75/day.

CCB = $84.89/week * 3
Out of pocket expenses = $140.11/week*3 = $420.33/week

Child Care rebate = $210.15/week

Total cost of childcare = $210.15/week = $70/day

Extra income earned from working ($30k pa) = $26400 (after tax, not including other deductions) = $508 / week.

So, crudely, this person would be $298 / week better off (Not taking into account reduction in family assistance).

She is also eligible for $164.78/fornight in Family assistance (All Part A).

If the mother does not return to work she is eligible for $437.36 / fortnight in family assistance (Part A = $289.94, Part B = $136.36, Large Family = $11.06)

This is $218.68/week. So she loses $136.29/week by going to work.

In total then, the person is only $162/week better off once childcare costs and family assistance reduction is taken into account. $54/day. I can see how this would lead to someone deciding it wasn’t worth returning to work.

Scenario C:

Spouse works full time, earns $70K. Mother returns to work 5 days a week, earns $70K. Three children in long day care, 10hrs/day, $75/day.

CCB = $38.88/week x 3
Out of pocket expenses = $336.12/week x 3 = $1008.36/week

Child Care rebate = $432.69/week

Total cost of childcare = $575.67/week = $115.13/day

Extra income earned from working ($70k pa) = $55150 (after tax, not including other deductions) = $1060.58 / week.

So, crudely, this person would be $484.91 / week better off (Not taking into account reduction in family assistance).

She is also eligible for no Family assistance.

If the mother does not return to work she is eligible for $437.36 / fortnight in family assistance (Part A = $289.94, Part B = $136.36, Large Family = $11.06)

This is $218.68/week. So she loses $136.29/week by going to work.

In total then, the person is $348.62/week better off once childcare costs and family assistance reduction is taken into account.

Seems to me there are significant financial disincentives for mothers to return to work.

My wife and I pay just over $80 a day to send our child to daycare, he goes 4 days a week (my mother takes care of him on Wednesdays, she is semi retired). We both have good jobs but the majority of our spare income does go towards child care and other associated costs. We don’t complain because we also chose to drive a new car, take holidays and generally live a comfortable lifestyle. We won’t however have another child any time soon unless we both start earning more money. I think many parents may find them selves in this situation and unless the government steps in to help most people won’t have more than 1 or 2 kids. Wasn’t Australia asking families to have 4 children for the good of the country not so long ago? If it is indeed for the good of the country, the country should be prepared to support it. Otherwise families will chose living comfortably over fielding half a football team.

I believe the rebate used to go to the centres directly, but this was changed a number of years ago to the adminstrative nightmare that is the current system. My cynical side suspects that the government it would be worth some political points to be giving the money to parents directly, but there were probably also issues with centres rorting the subsidies by over-reporting their numbers. Give it a few more years and they’ll probably change it back again.

Childcare should be run by the state. That way the egg throwing little bastards (sorry PB) will already have exerience in state care when they get to borstal or even the big house stage…

I wish the govt would do away with some of these subsidies and just give the money to the child care centres.

Most public servants earn enough to not get CCB benefit, and are paying full price for childcare. For more than one child, this means many women are working just to keep their jobs, rather than for any income. Pretty depressing really.

The govt is about to make things worse by demanding that all childccare workers hqave qualifications – this will result in the loss of all older ladies who work in childcare cos they love kids (and many are from ethnic backgrounds with poor written English). Staff will be even more thin on the ground, and even quicker to leave childcare for office jobs when they realise the pay is so bad.

PB – I understood that in England childcare is state run and costs about 10 bucks a day?

I think the child care centres wish the same thing. But really, as with primary school, the government should be providing child care these days rather than making campaign contributors wealthy.

grunge_hippy said :

I basically work for $30 on a wednesday after I pay childcare for 2 kids. Thats the one day I have both kids in care. one is in preschool the other 2 days, I only work 3 days a week.

If you don’t mind me asking, how much is the child-care? Does that $30 figure include the child-care rebate?

The reason I don’t work the other 2 days is because one, I would like to spend SOME time with my children and two, we cant afford it. I have a good job, so does my hubby but we have a mortgage, car repayment etc etc. Basically my wage on those 3 days pays for the mortgage and car repayment, we live off my hubby’s salary/credit cards.

Car repayments?

The childcare rebate I get paid quarterly, but given our combined salary I don’t get much. It would be better to get a discount each week, sort of like paying the gap in medicare bulk billing. that would make a difference day to day for sure.

I didn’t think the childcare rebate was means tested. The Government wanted to do this but got knocked back in the senate.

grunge_hippy8:31 am 23 Sep 10

I basically work for $30 on a wednesday after I pay childcare for 2 kids. Thats the one day I have both kids in care. one is in preschool the other 2 days, I only work 3 days a week.

The reason I don’t work the other 2 days is because one, I would like to spend SOME time with my children and two, we cant afford it. I have a good job, so does my hubby but we have a mortgage, car repayment etc etc. Basically my wage on those 3 days pays for the mortgage and car repayment, we live off my hubby’s salary/credit cards.

The childcare rebate I get paid quarterly, but given our combined salary I don’t get much. It would be better to get a discount each week, sort of like paying the gap in medicare bulk billing. that would make a difference day to day for sure.

Why can’t there be childminding through community centres, where women who want to do childminding are cleared through community centre to care for the children at their homes, I had my children minded by a lady who was through the centre, never had a problem, she was very good with my children.

calculations aside…
the more you earn, the more you pay… which to some might be fine… but it IS expensive… by the time I pay my rent and daycare I end up with about $80 more than i would if i stayed at home and didnt work.. unfortunately that $80 goes to bills… and im still so far in debt it isnt funny.

I hold no ill feelings toward the daycare for charging what they do… its what they have to do to make a profit, but I think as much as the government does – it isnt enough…

they want employment in Australia, well then make it easier for the working family.. the cost of living is so high these days, that mothers cant always afford to stay home, yet day care isnt much better… there has to be a medium…

and all those who chose to criticise, well you either dont have 3 kids in care with a medium paying wage, or you just have a better paying job then me or no kids.. I dont care… you arent in my (or many others) shoes, so dont criticise, because there are 10’s of 1000’s out there who find child care unaffordable!

Even with the CCR & CCB

the outlay of out of pocket expense is what is difficult! and I’d like to put it out there that the 50% CCR is BS!!

Yes, it should be cheaper, if you want skilled women to return to work. Working in a completely female field in Canberra (speech pathology) I have plenty of cooworkers returning to work mostly for the continued occupation rather than because it actually works out financially worthwhile..

Should be a FBT free item so people can salary sacrifice childcare. that would make it affordable, with no change to existing child care companies. Employers should be encouraged to offer this option in their agreementscontracts/agreements.

I don’t have any kids and don’t care one iota how much it costs for child care.
Having said that, I can’t help wondering that if they charge such hideous rates, are child care workers on sixty bucks an hour or what????

Noezis said :

aidan said :

Total cost of chid care / day = $4966 / (52*5) = $19.10 / day
That sounds a lot more affordable to me.

Your calculations assume you are below the minimum income threshold

Yes. I stated that explicitly at the beginning

Noezis said :

which for one child at a combined income of $134,443.00 in Canberra is quite low. That is two APS5s with a child, probably a mortgage, cars etc etc.

Well according to this department, probably more like two APS6’s, but yes, approximately right.

Having said that, this comes across as just a bit whiney. A combined income of greater than $130k/year is a gross household income over $2500/wk. This is close to double the median gross household income in Australia and 40% more than the ACT median gross household income (see here). This is well off by anyone’s standards.

Noezis said :

So the rebate in all honesty is a pittance, but then again do we really want the government to pay for all of this, or should we be able to salary sacrifice child care, maybe we do need to relax the standards and allow more children per carer?

The debate goes on.

Emd explicitly said “it’s not hard to see why a parent with a low income job struggles to justify their return to the workforce”. For a low income earner I don’t think $20/day is too bad.

If you’re income is high enough that you no longer eligible for child care benefit you are still eligible for a 50% rebate on all your expenses and the justification for returning to the workforce is a no-brainer, as you’re way ahead considering the income earned.

Noezis said :

So the rebate in all honesty is a pittance, but then again do we really want the government to pay for all of this, or should we be able to salary sacrifice child care, maybe we do need to relax the standards and allow more children per carer?

Salary sacrifice = the government paying for it, just so you know.

Also, allowing more children per carer is essentially a pay cut through the back door.

aidan said :

Total child care expense = 52 * 5 * $75 = $19500
Maximum child-care benefit is $184/week = $9568
Total out-of pocket expenses = $9932
Child care rebate is 50% of out of pocket expenses = $4966
Total cost of child care = $4966
Total cost of chid care / day = $4966 / (52*5) = $19.10 / day
That sounds a lot more affordable to me.

Your calculations assume you are below the minimum income threshold, which for one child at a combined income of $134,443.00 in Canberra is quite low. That is two APS5s with a child, probably a mortgage, cars etc etc.

So the rebate in all honesty is a pittance, but then again do we really want the government to pay for all of this, or should we be able to salary sacrifice child care, maybe we do need to relax the standards and allow more children per carer?

The debate goes on.

I understand that many community organisation-run centres are pretty much just breaking even at $75 and up, depending on expenses, so you’d be relying on (more) government subsidies to bring the price down. From a purely self-interested standpoint, I’m not in favour of more welfare for parents. Obviously there’s an economic benefit to encouraging people to have kids and return to work, but I’m not sure that more incentives are required at this point.

It’s pretty expensive to keep multiple kids in care while you go back to work, but you can’t always get everything that you want. At some point you’ll need to decide which is more important to you, and plan accordingly.

Incidentally, you’ll probably find that wages are a relatively minor component of the cost of running the average centre. In a room with three staff, cutting each one’s wages by $2 an hour would save about $50 a day (and probably drop at least one of them below minimum wage). Spread that across all of the children in the room, and you might take $5 a day off your fees. That’s not exactly a massive saving. Given the pittance that childcare workers actually earn at the moment, any suggestion of cutting their wages to bring down costs would be a pretty low act.

But I don’t want cheaper childcare at the expense of cutting childcare workers wages. I believe they are already underpaid given the years of tertiary study and level of responsibility they have.

Well, that makes it easy then – just increase the number of kids per carer. If 5:1 costs $75 per day then 10:1 should cost around $37 per day, and 20:1 should cost about $18 per day. Its just a matter of working the numbers….

The up-front cost of child-care is misleading. The child-care benefit and child-care rebate must be factored in as well.

Here is a test case. To make it simple let us say it someone who is eligible for maximum child-care rebate and benefit. They have one child in care 52 weeks a year at $75/day (I know there are holidays, but maybe they have to pay, maybe they don’t, we’ll keep it simple).

Total child care expense = 52 * 5 * $75 = $19500
Maximum child-care benefit is $184/week = $9568

Total out-of pocket expenses = $9932

Child care rebate is 50% of out of pocket expenses = $4966

Total cost of child care = $4966

Total cost of chid care / day = $4966 / (52*5) = $19.10 / day

That sounds a lot more affordable to me.

With regards to access to childcare, well ask this doofus Government why, despite repeated representations, they have decided to leave the former Giralang preschool site completely empty for the last three years. There was a comprehensive proposal to open a child care centre on the site, utilising a building that would require very little alteration to be used in this way, and they just continue to sit on their hands. A total free-kick and they ignore it. Ya gotta wonder.

Pommy bastard2:26 pm 22 Sep 10

Does Cabnberra need cheaper child care? Possible.
Does Canberra want cheaper child care? Probably.
Can Canberra afford cheaper child care? Depends which side of the fence you are on.

With childcare centres costing over $75 per child, per day in Canberra, it’s not hard to see why a parent with a low income job struggles to justify their return to the workforce. Particularly if they have more than one child under school age.

R-i-g-h-t…. So if a person has a child and desires to return to work, then the facilities to care for their child/children should be available, on demand, and at a price they can afford.

When I dream, I want a Porche.

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