AFR Article: Childcare reform a ‘bold and meaningful’ investment

By Carol Schwartz AO and Sam Mostyn AO

This article originally appeared in the Financial Review on June 20 2022.

The joint commitment by the Victorian and NSW governments to transform early education by introducing a universal preschool year of education is an important long-term social and economic reform.

It is a bold and meaningful investment in Australia’s future and we strongly support our largest states demonstrating national policy stewardship in making these investments in key social infrastructure.

Over the past 12 months, we have separately been engaged in leading expert panels and inquiries of the NSW and Victorian governments into policy reform and investments to promote gender equity and grow women’s workforce participation.

This work was important because, although Australian women are the most educated in the world, we rank 70th for women’s economic participation and opportunity. The difference in our ranking on the World Economic Forum league table is eye-opening.

Through the work of both panels, we consulted experts, businesses, unions and peak bodies. The message was loud and clear: affordable, accessible, high-quality early childhood education and care is critical for children and their families, and supports women’s workforce participation.

But the most persuasive evidence came from the lived experience of the many women we heard from – women who could not participate in the workforce in the way they want to because of the cost, or lack of access, to childcare. The lack of affordability and accessibility of childcare has sidelined primary carers – predominantly women – from participating in paid work.

It became clear that early childhood education and care reform is good for children, women and families, while driving productivity and economic benefits by releasing Australia’s highly educated and skilled women back into the workforce.

Early years are key

From a child’s perspective, there is a mountain of research confirming that the early years are key for developing the social, emotional and cognitive skills that lay the foundations for life.

Experts such as Jane Hunt, the chief executive of the Front Project, have long shown that quality early childhood education and care delivers better life outcomes and lowers costs to society and taxpayers in the long term. This major commitment to an extra year of play-based learning will greatly benefit all children and, importantly, disadvantaged children stand to benefit the most.

The Centre for Policy Development’s “Starting Better” report backs this, through the proposal for a guarantee for young children and families that entitles every child in Australia to three days of free, or low-cost, quality education from birth until school – beginning as soon as families need it – to provide all children with the lifelong benefits of early learning.

This investment in our children’s future is also an investment in women’s economic equity. It is clear that access to and affordability of high-quality childcare have been key structural barriers to women’s participation in the workforce.

Danielle Wood, chief executive of the Grattan Institute, has shown that the earnings gap between men and women is vast – women with children earn about $2 million less over their lifetime than men with children. The universal preschool year will be an important incentive for women to return to work or expand their hours, further building on women’s economic security.

As a nation, we urgently need this shift. A recent study conducted for Chief Executive Women by Angela Jackson from Impact Economics and Policy, found that halving the wage gap between men and women could fix the skills shortage and create the equivalent of 500,000 additional full-time jobs. Women are Australia’s most untapped resource and this reform will help fill future workforce needs.

Finally, it is encouraging that these commitments have been bipartisan and made jointly by the two largest Australian states. This sends a strong message nationally about the value of investing in social infrastructure and that long-term economic reform can sit above the political fray.

There is no doubt there will be much to grapple with as state plans are developed and implemented, especially in relation to the chronic shortages of early childhood educators and childcare accessibility issues. Regardless, this commitment is historic, and Australia will be stronger socially, culturally and economically because of it.

Carol Schwartz AO is the chair of the Inquiry into Economic Equity for Victorian Women for the Victorian Government and the Chair of the Women’s Leadership Institute Australia. Sam Mostyn AO is the chair of the Expert Reference Panel for Women’s Economic Opportunities Review for the NSW Government and President of Chief Executive Women.

Related Resources