Councils and affordable childcare
We are fortunate in Lane Cove to have council-run childcare facilities like Kindy Cove and Possums’ Corner. However, the fees at both facilities quickly add up, particularly when parents are working full time or if they have several children enrolled. The fee schedule ranges from approximately $126-$132 per day for Kindy Cove, and $122-$177 a day for Possums’ Corner. We need to ensure council-run childcare is affordable and accessible for all.
Lane Cove Council can play a crucial role by offering subsidised childcare for low to middle-income families, to ensure that it is affordable for all those who need it. This would help close the gap for children from low to middle-income households, ensuring that they do not fall behind from the outset. Affordable childcare would also help primary caregivers move back into the workforce, helping to improve not only the families’ financial security, but also that of the broader economy.
Research clearly supports the benefits of early childhood education. It helps with a child’s educational and social development, improving their readiness for school. Without affordable childcare options for low to middle-income households, we are creating a gap in society where some children are denied this important start in life.
The lack of affordable childcare options is also keeping primary caregivers out of the workforce. High early childhood education fees means that for many caregivers, most or sometimes all of their salary would go towards putting their
children in early childhood care. For many, this means enrolling their children is not financially viable, so they are forced to remain at home, or to only work limited hours.
The Household, Income and Labour Dynamics in Australia (HILDA) survey from 2019 found that this predominantly impacts women. Women often have lower take home pay than men, meaning that they are often the ones who remain at home as the primary caregivers. Introducing subsidies for low to middle-income families would help women get back into the workforce. This would help to remove one significant disadvantage faced by women.
The financial case: $10 childcare for Lane Cove residents
Background
Long-day care fees average between $100 and $150 per child 2-5 years old per day. The Federal Government subsidises a large proportion of the fee. Precisely how much subsidy is received varies according to the caregiver’s income. The balance of the childcare fee is paid by the carer to the childcare provider. Based on a 70 per cent subsidy, the net fees actually paid per child would be approximately $40-$55 per day. Therefore a council can provide a limited number of subsidised childcare places for $10 per day and the actual cost of the subsidy to council will range between $20 and $45 per day.
Lane Cove case study 1
Lane Cove Council provides childcare at Kindy Cove. The fee for a child aged between 2 and 6 years is $128 per day. A couple living in Lane Cove with one partner working fulltime and the other part-time, and needing 3 days per week of long-day care for a 4-year-old child, would be charged $384 per week. The Federal Government subsidy would amount to $219 and the fee paid by the carers would be $165 ($55 per day). By providing $10 per day childcare, Lane Cove Council would be providing a subsidy of $45 per day, or $135 per week, or $6,885 per year (the 51 weeks that Kindy Cove is open).
Lane Cove Case study 2
A sole parent or guardian with a 4-year-old child in care 3 days per week who is working 3 days per week would also face a total cost of $384 per week. The federal subsidy would amount to $249 and out-of-pocket expenses would be $135 per week. By providing $10 per day childcare, Lane Cove Council would be providing a subsidy of $35 per day, or $105 per week, or $5,355 per year (the 51 weeks that Kindy Cove is open).
Budget impact
Lane Cove Council has put on exhibition a Draft Budget for Financial Year 2021‑22 showing a forecast income of $59 million and a surplus of $6 million. Based on the 2021-22 Draft Budget and the two examples above, Lane Cove Council could provide 100 subsidised childcare places for $10 per day at an annual cost to the Council of $612,000 i.e. 1 per cent of its overall budget, or 10 per cent of its surplus. For such a small cost, Lane Cove Council could help make childcare more affordable for local residents on low incomes. Every child and every family deserves access to affordable childcare. With so many young families calling Lane Cove home, it is crucial our local council plays their part in making affordable childcare a reality.
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