1997-1998
Australia's Commonwealth Department of Health and Family Services, Budget Document 1997-98
The 1997-98 Budget reform package provides for more equitable access to subsidised child care for families, better distribution of new child care places and new funding arrangements for the Family Services' Emergency Relief program -- all of which will ensure sustainable growth in the sector.
Fact Sheet 12
Reforms to Family and Children's Services Program
The 1997-98 Budget reform package provides for more equitable access to subsidised child care for families, better distribution of new child care places and new funding arrangements for the Family Services' Emergency Relief program -- all of which will ensure sustainable growth in the sector.The Government's commitment to helping families is supported with estimated Family and Children's Services program outlays of $5.6 billion over the next four years. Outlays are forecast to grow from an estimated $1.3 billion in 1996-97 to $1.5 billion in 2000-2001 with real growth in outlays estimated at 3 per cent per annum over the forward estimates period.
The Government's child care reforms are the result of extensive family research and consultations with the community and industry, and will protect low and middle income families, particularly working families.
It is estimated that 44,000 new private sector places will be established over the period 1997-98 to 2000-2001, allowing access for 76,000 children. A further 39,000 community long day care, Family Day Care and outside school hours care places will be established to cater for an additional 60,000 children.
Improved targeting and distribution of care
Many areas of Australia have too many child care services while families in other areas have little or no access. Budget measures will address the unchecked and unplanned nature of child care program delivery so as to guarantee future services for Australian families.
From 1 October 1997, the Government will work proactively with State and local governments, banks, investment adviser networks and other relevant groups to encourage potential investors to establish new services in areas of greatest need.
Private sector growth will be contained to 7,000 new places for each of the two years, 1998 and 1999, with a return to growth as currently exists in the forward estimates beyond 1999. This measure will ensure growth in child care is consistent with the growth in labour force participation of parents with young children. Savings of around $207 million over four years are expected from this measure. Funding totalling $9.5 million over four years has also been set aside to support for new community long day care centres established under the National Child Care Strategy to be located in disadvantaged rural and remote areas where no alternative care is available.
The Government will increase the supply of Family Day Care by 2,500 places at a cost of $11 million over the next four years. This acknowledges that families are seeking greater access to Family Day Care because it offers more flexible hours, care for family groupings and quality care in a home setting.
These additional places will alleviate pressures in rural and remote areas where there is still a need for child care. An estimated 3,200 additional families (4,300 children) will benefit from this measure.
From 1 January 1998, a 20 hour per week limit on access to Child care Assistance will be introduced for each child in care for non-work related purposes. The limit will apply to all long day care and school age services. This measure is expected to slow growth in new child care places over the forward estimates period and beyond, generating savings of $80.7 million over four years. This measure improves the targeting of Child care Assistance to parents who work, study, train or are seeking work, consistent with the primary objective of the Children's Services Program. It is also expected to improve access for an additional 17,000 children due to changes in usage patterns.
Working families and users of Occasional Care services and Aboriginal or Rural Multifunctional Children's services will not be affected by this change. Exemptions to the 20-hour limit will be available to ensure families in particular circumstances do not lose access to care. This will assist families in crisis, children at risk of abuse or neglect, and a limited number of services where they are the sole provider of care in their area.
Funding of $1 million in each of the three years from 1998-99 has been set aside to improve developmental opportunities available through playgroups for children with a parent at home, representing a 60 per cent increase in current Government assistance to playgroups.
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Reform of school age care
Major reforms in school age care will dramatically improve equity and affordability for low and middle income families using Outside School Hours Care services enabling them to make care choices based on preference rather than on the level of subsidies available. An estimated 70,000 families will benefit from improved Child care Assistance.
The reforms involve an injection of $11 million over four years. They will also see the redirection of:
- all Child care Assistance funding provided for school age care in centres and Family Day Care;
- Outside School Hours Care (OSHC) operational subsidies and Child care Assistance (from 1 January 1998); and
- existing vacation care block grants to the States (from 1 February 1998).
Funding will be provided to assist OSHC services to restructure following the removal of the operational subsidy. (Further details are provided in a separate fact sheet Improved affordability for families with children requiring school age care).
Other child care measures
Childcare Assistance is currently paid in advance to services to reduce fees in accordance with family entitlements. On 1 January 1998, the new Commonwealth Service Delivery Agency will make payments fortnightly in advance to services based on family entitlements. From 1 January 1999 Child care Assistance will be moved to arrears in conjunction with the introduction of a Child care Card. Moving payments to arrears will provide consistency with other family payments made by the Commonwealth Service Delivery Agency. Savings of around $39 million over four years will result from the change in timing of payment from two weeks in advance to a fortnight in arrears. The movement to payment in arrears may cause some difficulties for low-income families who have to pay the full fee in advance for the first fortnight of care. The Department of Health and Family Services will develop options with the Commonwealth Service Delivery Agency to support families who have difficulties in meeting this cost.
To ensure families participating in the Work for the Dole initiative can gain access to appropriate child care, the Government will arrange and cover the full cost of child care for participants, estimated to cost around $600,000 over two years.
The Government is concerned many families pay for care they do not use and will work with the child care industry to reform charging practices to better reflect the care needs of families. This project will be referred to the new Child care Advisory Council (details to be announced) for advice back to the Government in the 1999-2000 Budget context.
The Government will refocus funding for other Family and Children's programs to meet current priorities. This measure will generate savings of just under $23 million over the forward estimates period.
Family Services' Emergency Relief program
As a result of a review of the funding formula for the Family Services' Emergency Relief Program, future overall funding for the Program will be indexed by the Consumer Price Index (CPI) at a cost of just over $15 million over four years. This will maintain the real level of the Emergency Relief Program to that provided in 1996-97. It will provide service agencies with more predictable funding levels and allow better planning to meet the demand for emergency relief.
Contact: Barry Wight, First Assistant Secretary, Family & Children's Services Division. Phone: (06) 289 3700
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