Posted August 2014

Earlier this year the Federal Government asked the Productivity Commission to undertake a public inquiry into ‘Childcare and Early Childhood Learning'. The primary goal of this inquiry is to "explore the future options for childcare and early childhood learning, with a focus on developing a system that supports workforce participation and addresses children's learning and development needs".

At the end of July, the Productivity Commission released their Draft Report, outlining the key recommendations and issues that they are currently considering. The full Draft Report can be viewed online at:

The Productivity Commission is now requesting responses to their Draft Report, through both written and verbal submissions. As part of this process, KU, as a leading provider of early childhood education, was invited to attend a Public Hearing, on Thursday 14 August.

Below is a summary of the responses that KU Chief Executive Officer, Christine Legg, and General Manager Community Programs, Poppy Brown, provided on behalf of KU, both as an early childhood education provider, and as a facilitator involved in the inclusion of children with additional needs within early childhood education settings.

KU's Position

When considering the current and future needs for early childhood education and childcare in Australia, KU believes that ‘what's best for children' must always be considered first, and then solutions developed that meet the requirements of parents. Overall, the goal should be to find solutions that effectively cater to both.

In its Draft Report, the Commission has raised a number of discussion areas and information requests that KU will respond to in detail in our written submission, however in addressing the Commission, KU's focus was on five key areas:

  1. Qualifications for staff working with children birth to 3 years old;
  2. Preschools - and exclusion from the National Quality Framework;
  3. Preschools - and Universal Access;
  4. Funding, and the proposed Early Learning Subsidy; and
  5. Removal of tax exemptions for Not For Profit providers.

1. Qualifications for staff working with children birth to 3 years old.

  • Contrary to the claims of the Draft Report, KU believes there is substantial evidence to support the need for higher qualifications amongst staff working with our most vulnerable age group - birth to 3 year olds.
  • Overall, we believe there is clear evidence that the benefits of higher qualifications of staff working with this age group and will be providing the commission with some examples of evidence-based research.
  • KU is also working with university academics to further explore this area, and provide additional research-based data to support what we have seen evidenced in practice for decades.

2. Exclusion of Preschools from the National Quality Framework

  • KU opposes the removal of dedicated preschools from the scope of the National Quality Framework. The inclusion of all funded service types in a single national framework is essential in ensuring universality, consistency and equity for all Australian children.
  • Excluding preschools would encourage a division between ‘childcare' and ‘education', which contradicts best practice and which the National Quality Framework was intended to overcome.

3. Preschools: Supporting Universal Access

  • KU believes the support of preschools through Universal Access funding should continue, however to better facilitate the range of attendance patterns in different jurisdictions and service types, we suggest funding a minimum of 12 hours, and a maximum of 15 hours per child each week.
  • This funding should remain distinct and separate from school funding.

4. Funding, and the proposed Early Care and Learning Subsidy

  • Overall KU welcomes and supports the recommendation that funding and subsidies be:
  • Streamlined into a single Early Care and Learning Subsidy. This is far simpler for families and providers.
  • Paid directly to providers: This will improve funding efficiencies, reduce bad debts, and make the actual fees/cost of care more transparent for families.
  • KU support the principle of means testing the Early Care and Learning Subsidy, however fundamentally believes that no family should be worse off as a result of the proposed changes. KU's experience shows that increases in fees can have an impact on utilisation at services in a wide range of regions and demographic areas, in effect:
            - Reducing children's access to early childhood education; - Reducing workforce participation; - Reducing the viability of early childhood education services.
  • Specifically, we have concerns about:
          - The calculation and application of the ‘deemed cost', particularly the need to recognise a range of operational and contextual variables that contribute to the cost of service delivery; - The impact of the reduced ‘base rate' of funding within the proposed means test, and the impact that this will have on affordability and utilisation, given the important role that higher income earners play in ensuring the viability and sustainability of providers overall.
  • To better inform this point, KU is both surveying our families and undertaking detailed data analysis, to provide clear evidence-based insights into the impact of the proposed funding model. This analysis will include the likely effect of the variable Early Care and Learning Subsidy rates and the implementation of ‘deemed cost' based funding.
  • We also anticipate this analysis will enable us to formulate some specific and tangible suggestions for solutions.

5. Removal of tax exemptions for Not For Profit providers

  • KU relies heavily on the tax exemptions available to Not For Profit providers, such as Payroll Tax and Fringe Benefits Tax exemptions, to ensure ongoing viability, reinvestment in services and our ability to attract and retain quality staff.
  • Removal of such exemptions would:
          - Impact on our ability to subsidise services in areas of disadvantage, or less viable services (smaller communities, regional centres, etc.); and - Threaten the financial viability of individual services, and our organisation as a whole.

Support for children with additional needs

We are pleased that the Commission supports the rights of all children with additional needs, including vulnerable children, to access childcare and early childhood learning services in the same way as all other children.

We are also pleased that the Commission has noted that there needs to be an increase in resources allocated to the Inclusion and Professional Support Program and that funding support for including children with additional needs ideally needs to meet the actual costs incurred by the ECEC service in including the child/ren.

The Importance of "Inclusion"

  • Inclusion is not just about being able to enrol your child at a service, it is enabling that child to actively participate in all the educational programs offered by the service with their typically developing peers. This is the best practice that the current Inclusion and Professional Support Program promotes.
  • We are concerned that a child-based funding mechanism which promotes "specialist disability ECEC services", as the Commission notes in the report, rather than including children in mainstream services contradicts best practice and limits the choices of families and their ability to participate in the workforce.
  • It is also important to avoid confusing the role of the NDIS and the role of Department of Education funding in terms of children with additional needs, to avoid a "one to one" support model in services, whereby a child has "their own" educator and quality inclusive practice is not taking place.

Special Early Care and Learning Subsidy

  • We support the increased funding available to all services through the Special Early Care and Learning Subsidy (SECLS).
  • Based on our experience with ISS, the ISS budget of approx $50m would need to be at the very least doubled or even tripled to meet the SECLS needs as proposed.
  • Whilst we would support this investment, assuming this is not possible in this fiscal climate, targeting of the SECLS funding will be necessary to ensure that funding is matched to need.
  • This targeting should ensure that services including children with the highest needs receive sufficient support, as these children are those most likely to be excluded from ECEC services. Possibly through a tiered approach.
  • The funding also needs to be:
          - Flexible - Looking at the combined needs of the children and staff in each service, not solely individual child needs - this will mean that actual needs and costs are different in different services. There is no one size fits all approach here. - Accessed via a simpler application process - supported by improved technology such as a better Portal.

Solely providing additional funds to services will not address the practical issues that services face when including children with additional needs. Each situation is different, and staff can quickly get overwhelmed by the challenges that a particular group of children present in the environment, even if funding has been provided for additional educators. If there is an inexperienced staff team, simply adding another funded inexperienced staff member will not help the situation sufficiently. Also in some areas, such as rural and remote services, you cannot access additional staff members even if you have the funding to do so.

Inclusion Support Program Once off Grants: Issues to be considered

  • We are concerned that the support should not replace Inclusion Support Agencies as they provide "on the ground" support to services as a cost-effective measure to ensure that all ECEC services can access appropriate, targeted support for their particular circumstances. ISAs provide expert support but also transfer knowledge to build the capacity of services via coaching, mentoring etc, which often reduces the need for services to access additional funding. ISAs also have a role in assisting the targeting of funds (e.g. SECLS) to services and increasing service's accountability for Government funds.
  • Inclusion Support Agencies currently provide support to all children with additional needs, not just those with a diagnosed disability.
  • The process of assessing applications from all CCB services twice per year to a deadline, would be fraught with problems from the agency assessing the applications perspective, as it would require a lot of resources to ensure effective processing.
  • The timing of applications would not suit all services. If applications for January-June close in January, what happens to the service who enrols a child in February. Or what happens to the service that received funding for specialist equipment but the child has now left the service?
  • Any provision of funded support needs to have an accountability process built in, to maximise the effective use of government funds.
  • Specialist Equipment may be better provided via NDIS.

KU's written response to the Productivity Commission

To assist us with our written submission to the Productivity Commission, we need feedback on the impact that the recommended changes will have on real families. To assist us with collecting this information, an online survey has been set up at

If you are a parent, with a child currently enrolled in a KU service, we encourage you to take part in this survey and provide us with your feedback by midnight on Thursday 28 August.