I have a confession to make: my children did not attend a structured learning pre-school. Nor did most of their friends. If you believe the propaganda about the benefits of early childhood learning, they should currently be homeless, having dropped out of school.
(Funnily enough, when I was a pre-schooler, my mother sent me to a local privately operated show – it was before the time of free kindergartens in Victoria – run by two single women who probably had no qualifications at all. It was run out of the family home of one of them. I first went when I was three, for a few hours every day during the week. There I was taught how to read, write and count – something that is frowned upon these days. I do remember preferring the sandpit.)
Anyway, the government’s childcare policy is clearly showing some stresses and strains as a result of the combination of new regulations (qualifications for staff, new staff ratios and requirements for structured learning, whatever that might mean for three year and four year olds – painting with meaning? ) and subsidy arrangements for parents using formal childcare. (Informal childcare and nanny costs are completely excluded.)
The subsidy arrangements come in two parts: a non-means tested childcare rebate capped at $7500 per year per child and a means-tested (based on family income and number of children in formal childcare) childcare benefit.
As the costs of childcare have escalated, mainly in response to the cost of the new national regulations and higher childcare worker wages, the latter with the support of the federal government, increasingly the annual cap is binding and the supposed 50 per cent of out-of-pocket expenses being incurred by parents with children in childcare is being exceeded.
The government is in a bit of quandary as to its response, particularly as it does not want to commit more dollars at this stage. The relevant minister, Kate Ellis, seems to be fresh out of ideas apart from the appalling idea of the government ticking off (or rejecting? modifying?) fee rises proposed by childcare centres, as in the case of private health insurance rates (oh, and that has been a big success).
The feasibility of this proposal is quite dubious – in the case of private health insurance, there are not too many companies and they have been forced to synchronise their rate changes. But there are thousands of childcare centres and forcing synchronisation could send some of them broke.
There is a story in The Age about moving to a system of making childcare costs tax-deductibility – the study finds such a change would benefit higher income earners. Duh, I hear you say. I’m not sure why they bothered to do the study if that was all they could find.
A family that spends $500 a week on childcare and has an annual income of $75,000 currently receives $13,564, or 54 per cent, of their care costs in government payments.
However, according to the modelling, if the same family were able to deduct childcare costs from their taxable income the amount they would receive back would be 31 per cent of their out-of-pocket expenses, or a tax reduction of $7625.
A family earning $235,000 a year now receives $7500, or 30 per cent, of their out-of-pocket costs in government assistance.
Under a system that provided tax deductibility for care costs, that family would have 42 per cent of their care costs covered, or a tax saving of $10,515. Once a family’s income reaches about $150,000 they no longer receive the means-tested childcare benefit.
The modelling showed tax deductibility favoured people on incomes over $150,000 because they spent more on childcare so were able to claim more back.
The continuing crisis in child care is a perfect case study of the problem facing the social democrats in all Parties (that includes big spending conservative like Tony Abbott who are close relatives to social democrats).
The argument for government intervention generally rests on a ‘moral’ case that some group is worthy of taxpayer support (in this case, working families with young kids). But despite the social democrats’ rise and complete dominance of politics over the last fifty years or so, they haven’t figured out how to make government service delivery work.
Consider the basic training provided to young economist at any Australian university. They are taught a flawed model of how markets work, which despite its flaws provides a reasonable approximation to real world markets. Then they are taught a long list of so-called market failures that are used to justify government intervention, including service delivery by government. What isn’t taught is how government should actually go about this task.
The bottom line is – they don’t know. They haven’t figured it out. This is why any attempt by government to intervene to deliver services like child care ends in tears. If you want to fix child care, get the government out.
johno
10 Jun 12 at 9:05 am
They’ve over-regulated the hell out of child care and, as you say Judith, you reap what you sow.
One of the silliest and costliest changes is the emphasis on qualifications. These are extreme and over-the-top. For one thing, it’s inefficient to have staff at every location designing learning programs for the kiddies; surely it would be better to have a few roving consultants.
The entire system is an example of base rate fallacy. Nobody bothered to ask, “if these kids were all just hanging out at home with their mums, how much structured learning would they be getting?”
Not much.
daddy dave
10 Jun 12 at 9:33 am
As noted in comments on another thread, the whole system is a textbook example of the result of progresive education theory gone mad, nanny statism, political correctness, credentialism and death by a thousand regulations.
FWIW there is a ghost of an argument to intervene to enrich the early years of deprived kids. Chidren in middle class families and those who provide enrichment in the way of varied learning experiences do not need any professional assistance. They may need child minding which they can often arrange by clubs or assistance from the kind lady next door. Or in cheap and clean places with sensible caring adults.
Poor Old Rafe
10 Jun 12 at 9:38 am
How the memories come back. I am too young to remember the time I was put in care while mother shopped in the city of Smithton. According to legend they offered milk at morning tea and I scornfully said that only pigs and babies drink milk. Then we were supposed to lie on the rug for a nap and I told them that only babies sleep during the day.
Poor Old Rafe
10 Jun 12 at 9:49 am
Johno, yes it’s a pity that what has been very well learned both here & around the world tends to be ignored when it comes to buying voter’s loyalty. At the long term expense of a country & its’ society, appealing to emotions rather than logic always seems to apply. When a government department is formed to carry out a function the people employed by it receive their pay based on attendance only. In Australia when union leeches are encouraged to interfere in private enterprise, that same very flawed logic is encouraged even by their labor party dills!
maurie
10 Jun 12 at 9:50 am
“am too young”. Dang. “was too young”.
Poor Old Rafe
10 Jun 12 at 9:51 am
All comes back to the government-created housing bubble. Australian housing is completely unaffordable for an average single income family; forcing both parents to work if they want to or not creates all manner of other financial problems and social issues.
Chris M
10 Jun 12 at 10:00 am
early childhood education is the Left’s favourite form of contracting out. their fears of out-sourcing fade away when there is a subsidy afoot and a chance to respond to market signals and resume their careers.
Jim Rose
10 Jun 12 at 10:06 am
Not to mention administering a strong dose of political correctness at the earliest opportunity.
Poor Old Rafe
10 Jun 12 at 10:58 am
Again we have creeping credentialism and the sop to the teachers unions at the core of a government problem, and they haven’t a clue as to how to fix it.
OK – let’s apply Libertarian First Principles:
1. Get the Government out of the equation;
2. Let the market sort it out;
3. There is no step three.
That was easy.
Winston Smith
10 Jun 12 at 11:11 am
Chris M is bang on. Look at female participation rates compared to house prices.
Remember the HIA, Withers and Powell writing for Abelson etc have estimated the costs of housing are 40-46% TAX/compulsory charges – even paying Government charges for services that are not required when the developer does the job themeselves.
The tax rate on building a home can be as high as 85%.
Back to childcare – the idea that subsidising people to work for less net income in aggregate creates more wealth is just crazy.
.
10 Jun 12 at 11:22 am
poor old rafe, a chapter in a Steve Landsburg book is a letter to his daughter’s first grade teacher sent after her homework was to come home and report back on how much recycling was in their home. He considers environmentalism a form of mass hysteria.
At his young daughter’s graduation ceremony, he was lectured by four- and five year-olds on the importance of safe energy sources, mass transportation, and recycling – a political agenda from children not old enough to read
Like other coercive ideologies, environmentalism targets children specifically
see http://ruby.fgcu.edu/courses/twimberley/EnviroPol/EnviroPhilo/WhyNotEnviro.pdf
p.s. his young daughter was the only Jewish child in her class. Occasionally, and especially around Christmas time, her politically correct teachers forgot about this diversity and made remarks that were appropriate only for the Christian children.
P.P.S. he overheard a teacher telling a group of children that if Santa didn’t come to your house, it meant you were a very bad child. This was within earshot of an Islamic child. (I assume that none of these children came from poor households)
Jim Rose
10 Jun 12 at 11:25 am
The missus used to do family day care – she took 5 kids per day into our home and looked after them. The going rate was a bit over $5 per kid per hour. It didn’t cost parents an arm and a leg, the service was local and if the missus was prepared to do the hours, she could pull in $50k without having to commute to work etc, and she could deduct a huge range of expenses.
The Council laid on a toy library and book library so that the kids had a constantly rotating set of stuff to wreck, and a Council bus would pick them up once a week for an external activity – kindy gym or a visit to the library etc.
Parents loved it. The carers loved it. The kids loved it. Council had about 100 carers on the books. The paperwork was not too onerous – most of involved making sure the kids wouldn’t be electrocuted, drowned, poisoned or fiddled with when they were in your home.
Then the paper warfare started to escalated. And then in came the need for qualifications. Carers said “sod this for a lark” and quit. Our Council now has about 20 carers on the books, and the service might as well be wound up. We now need childcare ourselves, and instead of paying $40 a day for a full day of family day care, we are paying $100 a day at a local centre (the centre is top class by the way – I have no complaints about the quality).
All the kids want to do is paint, play with blocks, run around like lunatics with each other, swing on the swings, slide on the slides, dig in the sand pit, get fed, have a snooze and perhaps have a book read to them.
Instead, the childcare centre has to bombard us weekly with what the kids are up to – counting the blocks they hit each other over the head with, learning the colour of the paint they smeared all over their faces, naming the shape of the gluten-free, organic, sugarless cookie they’ve just thrown on the floor in disgust.
This of course was previously done anyway by all the cheaper, unqualified mums who ran family day care – it’s not that hard to do shapes, colours, numbers and letters. However, these days, you need a PhD in childcare in order to teach that. We’ve had two kids go through the old system and one through the new, and I can’t see a lick of difference in their development at the same age.
We wouldn’t have to worry about the costs of childcare if the nanny state stopped interfering in childcare.
boy on a bike
10 Jun 12 at 11:38 am
It does have an idiology behind it for the ALP..
They know, for all their posturing, that there are parents whos kids are effectively crippled by neglect.
They also knowthey would be pilloried by their own “side” if they took away all the kids from feral parents.
But rather than single out neglectful parents for censure some bright spark has said “all kids will get this”..
thefrollickingmole
10 Jun 12 at 12:32 pm
My pre-school was a sandpit in the backyard.
stackja
10 Jun 12 at 12:51 pm
My pre-school was the sandpit over the back fence, which just happened to be a construction site.
boy on a bike
10 Jun 12 at 12:56 pm
Methodically covering all the bases. Romney gets more accomplished by each passing day.
This could help steer votes away from the Liberatarian party to Romney in November.
JC
10 Jun 12 at 12:58 pm
This is it.
But you can’t do business in that sector any more without employing a bunch of fresh-faced graduates brandishing degrees in early learning, slashing staff-child ratios, and complying with a ton of red tape. And they wonder why costs are spiralling.
daddy dave
10 Jun 12 at 1:23 pm
Wrong thread, JC. This is child care.
daddy dave
10 Jun 12 at 1:33 pm
One thing you are all missing is there is actually a market for this form of regulated, over certified childcare amongst the families with the very children that do not need it.
A lot of child caring decisions can be guilt based.
entropy
10 Jun 12 at 2:32 pm
While a lot of Freakonomics was a bit flaky, it contained a fascinating Israeli study on the impact of a school charging a penalty for picking kids up late after school. The result? The number of kids left after school skyrocketed, and so did the length of time they were left.
Peter Patton
10 Jun 12 at 2:38 pm
entropy, if there’s a market for it, then child care establishments will offer a premium product to those parents who want it. That’s what happens in less regulated environments.
Besides, the benefits of regulation are dubious anyway and I’m not convinced that a market-designed premium product would emulate what the current regulations impose.
Additionally, the regulations should reflect the reality that school isn’t compulsory before the age of 5. There should be no compulsory learning goals or curricula of any kind for pre-schoolers. If parents want a place where their kids are going to be fed, have somewhere to play, and have a bit of fun, that should be enough.
daddy dave
10 Jun 12 at 2:39 pm
Kate Ellis fresh out of ideas?
That’s a surprise.
H B Bear
10 Jun 12 at 2:41 pm
‘When a government department is formed to carry out a function the people employed by it receive their pay based on attendance only’.
Somewhat O/T, but attempts to link public sector remuneration to individual performance have always proven to be neither efficient, effective nor ethical.
Des Deskperson
10 Jun 12 at 2:44 pm
No discussion of the distortions of childcare market should underestimate the efforts of that dill from Queensland, Eddy Groves and ABC Learning.
H B Bear
10 Jun 12 at 2:52 pm
I think we should use the movie “Daddy Day Care” model. Problem solved.
MichaelC58
10 Jun 12 at 3:14 pm
Some very good comments already.
I’m sure Mises would use child care in Australia as a textbook example of the pitfalls of central planning.
The numbers of places are regulated and labour inputs are determined by decree. The politicians and bureaucrats then seem to be mystified as to why we have surplus numbers of places in some areas and shortages in others. It seems using prices and the resulting market signals are too barbaric for this sector. But then when prices go haywire due to the heavy intervention, it seems the central planners resort to their favourite method of price controls. Interventionists never learn…
Skuter
10 Jun 12 at 3:33 pm
That’s true DD. I was saying that a significant portion of the population wants an over regulated, stultifying and propagandising childcare system controlled by the dead hand of government, because it removes the responsibility of trying to work out what is best for their children themselves, and ignoring what others think.
entropy
10 Jun 12 at 3:52 pm
Credentralisation happens in many teaching professions.
My oldest sisters went to teachers college for a 2 year diploma as I recall. Nowdays, degrees plus a diploma as required as minimums.
If you want a job in the catholic schools, months of community service helps. Some have been known to resume going to mass after very long breaks.
Back when I left university just being a catholic who was a university graduate was enough for the inside running because they could teach the religion classes.
Isn’t the purpose of early childhood education learning to socialise with strangers and share your toys.
Jim Rose
10 Jun 12 at 4:59 pm
Yep – and that will continue, because the good child care workers want to work in nice suburbs with the well behaved kids of nice, middle class parents. Looking after young kids is quite a grind – a lot of people seem to burn out after 5-6 years and quit.
I pity the poor 20-somethings that have run up a HECS debt to get a degree in child care, and then find that they want to chuck it in and do something else before the debt is paid off. Previously, workers could enter the industry with almost no cost to themselves – you just had to be good with kids and reliable.
Good workers gravitate to nice suburbs where the kids are called Lily and Simon and where the parents need child care because they work; and they’re avoiding the suburbs where the kids are called Dwayne and Chardonnay and Winfield and where single unemployed uggboot wearing mums dump the kids in subsidised child care to spend more time at the pub.
boy on a bike
10 Jun 12 at 6:10 pm
Daddy Dave Care Model will do me.
Now on ABC News – mental health checks for three year olds. These regulating nannies just can’t stop themselves.
Elizabeth (Lizzie) B.
10 Jun 12 at 7:02 pm
As scary as anything that has been suggested this year.
Seriously what sort of whackjobs want this? And what is their aim?
jupes
10 Jun 12 at 7:06 pm
O/T Des
Which is yet another reason we need to cull the public service.
duncan
10 Jun 12 at 7:23 pm
Apparently, if you sleep with the light on when you’re three, you’re going to turn out like that ‘Get Kony’ bloke, ranting and batting yourself off naked in the street. You know it makes sense…
Skuter
10 Jun 12 at 7:26 pm
Tar. Feathers.
daddy dave
10 Jun 12 at 8:04 pm
“Now on ABC News – mental health checks for three year olds”
it’s abnormal for little kids not to have tantrums, and not to want a light on when they’re scared by monsters in the dark.
they got it the wrong way round.
candy
10 Jun 12 at 8:12 pm
Duncan, performance incentives in the public sector don’t work because, at most levels in hierarchical bureaucracies, individual workers have very little control over the work they are allocated or the results they can achieve with this work. Inevitably, performance rewards tend to be allocated for shallow and superficial ‘achievements’ and are usually perceived to be, and probably are, corrupted by patronage and favouritism.
Of course, it may well be the same in big old private sector bureaucaries like banks or insurance companies.
The real issue for the public sector isn’t rewarding performance but managing underperformance. This has never been effectively tackled, at least at the Commonwealth level, and for one simple reason: it’s only taxpayers money!!
Des Deskperson
10 Jun 12 at 8:42 pm
Starve the beast.
We had tax/spending:GDP ratios of 17% for all levels of Government during the middle era of Menzies’ time and we had social welfare, Commonwealth sponsored university places and a large military.]
15% of GDP ought to do it now if we get rid of duplication and waste, and this would please everyone except for radical communists etc who can be safely ignored.
.
10 Jun 12 at 8:46 pm
What I hear from mates in Government jobs and dysfunctional corporate bureaucracies suggests Des is completely right and has summarised a very major problem.
The thing is that big, old, dysfunctional private sector bureaucracies die out. That is one of the biggest and least popularly acknowledged advantages of the private sector; you just can’t stay as wrong for as long.
wreckage
10 Jun 12 at 8:54 pm
Is not all this just to do away with parenthood so the state has control of the citizen from cradle to grave.
They have done away with fathers in many areas and mothers are an impediment to social workers.
john malpas
11 Jun 12 at 10:03 am
According to the abs the net cost of child care to a family is just $67 per week. This is because the child care benefit combined with the rebate are paying upwards of 80% of child care costs. In other words the system is almost completely public.
The problem the government has is that small changes in child care costs, like a 10% increase in price, can hit a family as a 50% increase in the net cost they actually pay.
Needless to say, since 2008 child are costs have gone from $285 per week to nearly $460 per week! In many cases, if the rebates and benefits did not exist it would be cheaper to hire a nanny than use an ‘approved ‘ child are provider.
Mundi
12 Jun 12 at 12:42 pm