Norman LaRocque: Poorer parents put at disadvantage by preschool policies

COMMENT

The Minister of Education's decision to deny free childcare to the parents of 25,000 children is a triumph of ideology over the national interest.

In its Budget, the Government announced that taxpayers would fund 20 hours a week of free childcare for 3 and 4-year-olds at community-based, teacher-led early childhood centres, while denying the same support for children attending other centres.

While the new funding may be welcome, the move to favour community-based providers over others represents bad policy. There is no justification for differentiating subsidies based on the ownership structure of an early-childhood centre.

The move is tantamount to the Government providing lower welfare benefits to beneficiaries who buy baby food at non-community-based stores. If this sounds ridiculous, why is it about to become part of the early-childhood policy landscape?

A significant, unintended effect of the policy will be to provide subsidies to wealthy parents whose children attend community-based centres, while denying the same subsidies to parents on lower incomes whose children attend non-community centres.

It means that no matter how good the care and education is at the centre you choose to send your children to, and no matter how much you might need help with funding to have your children attend that centre, if it is not a community-based centre, your children will not be eligible for free care.

This is inequitable and an example of why funding should be targeted on need, not the ownership structure of a centre.

The move will also actively discourage investment in the fastest-growing component of the early-childhood sector - the entrepreneurial, predominantly female-owned education and care part.

Trevor Mallard is placing barriers to investment in the early-childhood education sector at the very time the Government is stoking demand for such services by encouraging labour force participation through welfare reform and increasing the early-childhood subsidy for low-income families. This lack of policy co-ordination will work against the Government's labour market and social welfare goals.

These barriers come on top of ill-advised policies that are placing significant pressure on the early-childhood sector in general and private enterprise early-childhood education centres in particular. These include: providing higher levels of subsidies to kindergartens to give their staff pay parity with primary school teachers; limiting early-childhood equity funding to community-based early-childhood centres; requiring all regulated staff at early-childhood centres to be either registered or in training (with no more than 30 per cent in training) by 2012; and the increased financial and compliance burden associated with changes to the Holidays Act.

The policy also means that any centre participating in the free-funding programme will be subject to price control, since it cannot charge more than the Government level of funding if it is to be free.

Early indications are that the Government will pay one fee, based on a national average of charges, to all centres. So those charging above the average will lose heavily and those under it will score a windfall.

A 2002 fee survey by the Early Childhood Council showed centres charged hourly fees from $1.25 to $8.75 (reflecting differing service features and cost structures). It gives an indication of the inequity that is likely to occur.

Where centres are worse off they will have to consider whether to cut costs, staff and quality, and/or load up the fees on their children under 3 and/or the fees for the usage of more than 20 hours a week, so as to live within the lower fees required to meet the Government's commitment to free early-childhood education.

In this sense the "free preschool" is in fact a poor policy with inefficient use of funds, and it will have uncertain, dynamic, harmful and inequitable consequences. The early-childhood sector has grown significantly since the Before 5 changes were introduced in the late 1980s. One of the sector's strengths is its diversity and its ability to respond to changing social and economic circumstances.

The private-enterprise early-childhood sector serves thousands of families well, especially working families. It has also been the fastest-growing in recent years.

Mr Mallard should not limit the diversity of the sector by further stacking the system in favour of certain types of centres. He has already gone too far down that route.

While one can strongly question the wisdom of untargeted free childcare policies, a wider issue is the minister's anti-private enterprise attitude that permeates the Government's education policy.

Mr Mallard is on record as describing private-enterprise centres as "Kentucky Fried Childcare", but it is his latest policy move that is the turkey. Rather than actively working to destroy the fastest-growing part of the early-childhood education sector, he should recognise the valuable contribution that it makes to the Government's education and labour market goals.

The public interest is served by any centre that helps to advance the Government's social, educational and economic goals, not just by those whose form fits the minister's anti-private enterprise ideology. It is time for Mr Mallard to focus on feeding children's minds, rather than his ideologies.

* Norman LaRocque is the policy adviser to the Education Forum.