CIS Opening Statement to Senate Inquiry into Early Childhood Education and Care (ECEC) - The Centre for Independent Studies
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CIS Opening Statement to Senate Inquiry into Early Childhood Education and Care (ECEC)

Blaise Joseph

We would like to thank the committee for your invitation to give evidence today. We are very happy to be here and we hope our contribution will be helpful to you.

And we want to start by noting there are thousands of hard-working staff in early childhood education centres — more than a quarter of a million staff, in fact.

There are three main ideas we wish to table as evidence before this inquiry.

Firstly, claims that formal childcare benefits children in terms of their socio-emotional development and school readiness are contested. Evidence does not show a uniform benefit to children of all ages and backgrounds.[1]

There is almost no evidence suggesting formal childcare benefits children under the age of 3, while the evidence for preschool programs for older children — in the one or two years before school — is more consistently positive.

The recently released First Five Years project report from the Department of Education showed that attending formal childcare actually increases the risk of child development vulnerabilities compared to not attending formal childcare, after adjusting for children’s backgrounds.[2] In the absence of firm evidence of consistent benefits from formal childcare, there is a strong case for more closely considering issues of system cost and parental choice.

Secondly, Australia’s childcare system is becoming more expensive for taxpayers and administratively burdensome. The National Quality Framework introduced in 2012 sought to harmonise standards across states, but now functions as a major cost driver — with limited evidence that regulations such as prescriptive staffing or qualification rules actually improve child outcomes.[3]

As the ACCC reported in 2023, childcare fees continue to rise faster than inflation and wages, and ever higher subsidies risk fuelling further price growth.[4]

According to the latest Productivity Commission Report on Government Services, the median weekly cost of childcare increased by 32% in real terms between 2016 and 2025.[5]

In addition, federal government recurrent expenditure on childcare reached $16.2 billion in 2025, and total federal, state and territory government spending reached $20.4 billion,[6] almost $13,000 per child in formal childcare[7] — a 57% real increase in per child spending from 2016.[8]

For context to give an idea of the size of this cost: there are approximately 1.8 million children aged between 0 and 5 in Australia,[9] so government spending on childcare is equivalent to over $11,000 per child per year in this age range or about $9,000 per child in federal government spending alone.

So the federal government could instead simply give every family in Australia a $9,000 cash payment per year for every child between 0 and 5 years-old, for the same cost to the budget.

Finally, parents desire greater choice. In 2019 the CIS with YouGov polled 521 working mothers finding over half of these women would prefer greater access to informal care such as that provided by a grandparent or friend.[10]

Two-thirds of respondents supported government subsidies for informal care, even if this meant receiving less financial support. They also rated caregiver warmth, location, and cost as more important than staff qualifications and early learning experiences. These findings are consistent with more recent polling from the NSW Productivity Commission[11] and Childcare Choice.[12]

This indicates a clear desire among parents for more flexibility in childcare support. This could be met by a tiered family-centred funding model, for example, as outlined in our submission.[13]

Alternatively, the federal government could make a simple cash payment to every family which they could then use however they wish — for instance, the government could simply re-allocate the childcare subsidies to increase the size of the family tax benefit instead.

Thank you, and we look forward to answering your questions.

[1] Productivity Commission. 2014. Childcare and Early Childhood Learning, Inquiry Report Volume 1. https://assets.pc.gov.au/inquiries/completed/childcare/report/childcare-volume1.pdf p. 6 ; OECD. 2020. Attendance in early childhood education and care programmes and academic proficiencies at age 15. https://www.oecd.org/content/dam/oecd/en/publications/reports/2020/01/attendance-in-early-childhood-education-and-care-programmes-and-academic-proficiencies-at-age-15_0ffec905/f16c7ae5-en.pdf p. 4 ; Gialamas, A., Mittinty, M., Sawyer, M., Zubrick, S., & Lynch, J. 2014. Child care quality and children’s cognitive and socio-emotional development: An Australian longitudinal study. Early Child Development and Care, 184(7), 977-997. https://doi.org/10.1080/03004430.2013.847835

[2] Department of Education. 2025. The First Five Years: What makes a difference? https://www.education.gov.au/download/19864/first-five-years-project-publication/43234/document/pdf p. 72 (Figure 4)

[3] Perlman, M., Fletcher, B., Falenchuk, O., Brunsek, A., McMullen, E., & Shah, P. 2017. Child-staff ratios in early childhood education and care settings and child outcomes: A systematic review and meta-analysis. PloS one, 12(1). https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0170256&type=printable ; Crawford, C., & Outhwaite, L. (2023). Understanding the Impact of Childcare Ratios on Children’s Outcomes. Centre for Education Policy and Equalising

Opportunities (CEPEO), University College London. https://discovery.ucl.ac.uk/id/eprint/10165687/1/cepeobn18.pdf ; Joseph, E. 2018. Why childcare is not affordable. The Centre for Independent Studies. https://www.cis.org.au/wp-content/uploads/2018/08/rr37.pdf ; Jha, T. 2014. Regulating for Quality in Childcare: The Evidence Base. The Centre for Independent Studies. https://www.cis.org.au/wp-content/uploads/2015/07/pm142.pdf

[4] ACCC. 2023. Childcare inquiry: Final report. https://www.accc.gov.au/system/files/childcare-inquiry-final%20report-december-2023_0.pdf pp. 5, 65-67

[5] Productivity Commission. 2026. Report on Government Services 2026: 3 Early childhood education and care. https://www.pc.gov.au/ongoing/report-on-government-services/child-care-education-and-training/early-childhood-education-and-care/ Table 3A.22 (centre based day care, for all areas in Australia).

[6] Productivity Commission. 2026. Table 3A.1

[7] Productivity Commission. 2026. Table 3A.41

[8] Productivity Commission. 2026. Table 3A.41

[9] Australian Bureau of Statistics. 2025. National, state and territory population, Jun 2025. https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/jun-2025/31010do002_202506.xlsx Table 8

[10] Joseph, E., & Mueller, F. 2019. What Do Parents Want? Australian childcare preferences and attitudes. The Centre for Independent Studies. https://www.cis.org.au/wp-content/uploads/2019/09/pp22.pdf

[11] NSW Productivity Commission. 2023. Childcare choices: What parents want. https://www.nsw.gov.au/sites/default/files/noindex/2025-09/nsw-pec-childcare-choices-what-parents-want.pdf

[12] https://childcarechoice.com.au/

[13] The Centre for Independent Studies. 2025. Submission 92: Quality and safety of Australia’s early childhood education and care system. https://www.aph.gov.au/DocumentStore.ashx?id=4a4d01b2-4234-406e-9da4-d3c1473d4d7a&subId=779674 pp. 13-14