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Beyond the expected

Does Canberra need cheaper childcare?

By emd - 22 September 2010 43

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.

What’s Your opinion?


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43 Responses to
Does Canberra need cheaper childcare?
sepi 9:47 am 23 Sep 10

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?

aidan 9:31 am 23 Sep 10

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_hippy 8:31 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.

cleo 1:14 am 23 Sep 10

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.

Mulberry 12:21 am 23 Sep 10

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!!

Fiona 8:01 pm 22 Sep 10

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..

steveu 5:15 pm 22 Sep 10

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.

Pork Hunt 5:13 pm 22 Sep 10

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????

aidan 4:37 pm 22 Sep 10

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.

Erg0 4:31 pm 22 Sep 10

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.

Noezis 4:12 pm 22 Sep 10

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.

Erg0 3:01 pm 22 Sep 10

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.

Mathman 2:51 pm 22 Sep 10

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….

aidan 2:41 pm 22 Sep 10

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 bastard 2:26 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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