Australia’s system of childcare rebates and benefits has been singled out as perhaps the world’s most complicated as an inquiry begins to investigate adopting a New Zealand scheme to support nannies.
On Sunday the Abbott government released the terms of reference for its long-promised inquiry into childcare and early childhood learning, due to run until October next year.
The Productivity Commission will look at long day care, family day care, in-home care including nannies and au pairs, mobile care, occasional care, and outside school hours care.
It will be asked to consider which models of care should be trialled in Australia, singling out New Zealand’s home-based care system.
The New Zealand government offers subsidies for licensed nanny services in private homes, including services operating 24 hours a day. Such services must be teacher-led and meet standards in areas such as curriculum and safety.
The Australian government already provides funding for in-home childcare but only for families in special circumstances, such as remote locations or with multiple children not yet at school, or children with disabilities.
Curtin University professor Alan Duncan welcomed the inquiry saying Australia’s overlapping systems of childcare support were so complicated computer modellers found it hard to map them.
At the National Centre for Social and Economic Modelling which he ran until March he asked his programmers to produce graphs of where the payouts peaked and where they troughed. He says at first they couldn’t. What they eventually produced was a three-dimensional graph with contours that looked ”something like [the] nose cone on a spacecraft”.
”It’s a multifaceted picture in which childcare support broadly rises across two dimensions – the cost of childcare and the hours of work – but declines as income rises. It means the end result is hard to predict.”
Australia’s system of overlapping supports – the 50 per cent childcare rebate up to a maximum per child and the income-tested childcare benefit – might be the world’s most complicated. The complexity meant the rules couldn’t provide clear incentives and it wasn’t clear what combination of working hours or time in care was optimum.
It also made the system expensive to administer.
Prime Minister Tony Abbott said he wanted the system to be ”responsive to the needs of today’s families and today’s economy”.
But the Productivity Commission would have to ensure its recommendations resulted in no greater drain on the Commonwealth’s budget.