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Field notes

Childcare crisis in Australia

Growing demand for childcare services in Australia is driving fees up and forcing parents to register their kids on waiting lists as soon as they are born. Some are working less in order to care for their children.

When Sydney resident Kathleen Shipard was pregnant with her first child, a colleague at work gave her some prudent advice: immediately register her future baby on a waiting list at a childcare centre.

Mrs Shipard, a 34-year-old business manager at a bank, duly applied for a place at a  centre which was conveniently opening across the road in the inner city suburb of Chippendale. 

But it was 21/2 years before the centre had a place for her daughter, Matilda, who is now five. "They were a brand-new centre and they were already filled up with children," she told The Straits Times.

As with most advanced economies around the world, Australia has been seeking to increase  the workforce participation of women in recent decades. But this has also led to growing demand for childcare places. 

The result for many parents can be high costs and hassle which hold mothers back from full-time employment.

In some areas, particularly in parts of Australia's largest and most expensive city, Sydney, fees have jumped to as much as A$195 (S$206) per day. Some centres charge parents up to A$100 just to put their children on a waiting list. 

  • $206 Childcare fees per day in parts of Australia’s largest and most expensive city, Sydney.

    $106 What some centres charge parents just to put their children on a waiting list.

    27% The percentage of its income that an average household now spends on childcare.

    54% The percentage of Australian mothers, with a youngest child aged two or under, who have returned to work – a rate which has increased by about 20 per cent over the past 20 years.

According to a study this year by the University of Melbourne, childcare prices have increased 50 per cent in the past five years. Between 2002 and 2014, the average childcare costs for a couple increased  from A$53 a week to A$111, according to the institute's long-running annual survey of households.

The average household now spends 27 per cent of its income on childcare - well above the 17 per cent average in the 35-nation Organisation for Economic Cooperation and Development.

The institute said demand has soared largely because of an increase in women entering the workforce since the 1970s. Government figures show that 54 per cent of Australian mothers with a youngest child aged two or under have returned to work - a rate which has increased by about 20 per cent over the past 20 years.

For almost two decades, average childcare prices in Australia have outpaced inflation. This is partly due to the increasing number of working mothers, which has left centres, a mix of state-owned, non-profit and privately operated, struggling to meet the demand.

In addition, rules introduced in 2012 which stipulate minimum staffing levels per child and more qualified staff - as well as more physical space per child - have added to the costs.

The growing demand for childcare is not just affecting parents but has taken a heavy toll on public coffers. The federal government currently spends about A$8 billion a year on childcare rebates and subsidies. This is due to increase to A$11 billion by 2018. 

The money pays for parents' childcare costs, up to A$7,500 a year per child. Lower-income households can receive up to A$212 per child per week. 

States also subsidise the sector by directly funding programmes at a total nationwide cost of about A$2 billion a year. But one problem, as research has shown, is that increased subsidies can prompt childcare centres to raise fees.

CUTTING BACK ON WORK

For some parents, the soaring prices have prevented them from returning to work or forced them to work fewer hours than they would like to. Some parents can lose access to some subsidies if they start to earn too much.

A survey of 201 parents this year by Fairfax Media found that 23 per cent of parents worked fewer hours than they wanted.

For example, Mrs Tamara Millard, a 29-year-old mother in Adelaide who works in marketing, cut back from working three days a week to two days after the birth of her second child. She had calculated that she would only be getting A$9 an hour - about half the minimum wage - on her third day of work after paying taxes and childcare costs.

Interestingly, the childcare problem is not evenly spread across Australia. Some regions have a surplus of places, particularly in areas where there has been an ageing of the population.

In the largest city of Sydney, the shortages have tended to be in inner city areas, where the population is young and property prices are high. In the second-largest city of Melbourne, the shortages have been in outer suburbs, where the population has surged partly due to an influx of young immigrants and high birth rates. 

Despite soaring spending on the childcare sector, governments at all levels in Australia still struggle to satisfy or anticipate demand. 

Early Childhood Australia, the peak body representing the interests of young children, has urged governments to use demographic data to analyse and predict demand for childcare and then tailor spaces accordingly. 

The chief executive of the organisation, Ms Samantha Page, told The Straits Times that policymakers should work with service providers to determine where and when centres should open. She said governments could offer subsidised loans to encourage operators to open centres in  lower-income areas.

"Parents need daycare... close to their home or on the way to work," she said. "It is no good to them if they have to travel 5km out of their way to find a service."

The federal government is proposing changes to the system, including combining the subsidy and rebate into  a single benefit. The move would provide greater benefits for most working families but could reduce payments for some parents who do not have regular full-time work.

Despite the difficulties in finding and paying for childcare places, many parents in Australia say placing their children in daycare centres not only helps parents to return to work, but also helps children to learn and socialise.

Mother-of-four Olwen Crane, 39, said she put her youngest son Mitchell on a waiting list for a community-run pre-school on the day he was born. Three years later, he secured a place. She said: "He knows how to sit... how to participate and listen. It gets him ready for school."

Ideal is 'a pinch of S'pore, a pinch of Australia'

As a parent who has had a taste of childcare services in both Australia and Singapore, Mr Mark Sing says his ideal system would be a mixture of both.

Mr Sing, 40, an investment banker, and his wife Beverly, 40, an accountant, had their two daughters, aged eight and 10, while living in Australia. From 2009 to the end of 2012, the family lived in Singapore where their children attended a childcare centre. 

The couple are both ethnic Chinese originally from South Africa. They moved to Australia - she in 1999, he in 2000 - after completing their studies. 

Now based in Sydney, Mr Sing said the style of learning is very different in the two countries. "In Singapore, the kids had studies - the days were jam- packed," he said. "They were learning maths and English. In Australia, it is more catered to play and to fun and to kids learning that way. They really get you into the studies only from year 1 (age five or six) onwards."

His assessment: "I'd like to take a pinch of Singapore and a pinch of Australia and blend it." 

Mr Sing said it was easier to secure a spot in Singapore than in Australia. However, he added, fees in both countries were high. 

His children in Singapore attended a centre which catered to expatriates and the fees were similar to those in Australia - about A$100 (S$106) per child per day. "It is an expensive exercise," he said. "We were fortunate that we could earn enough for both kids."

In Australia, the high costs have prompted families to increasingly rely on the support of grandparents. Some families have even flown in grandparents from overseas to help share the load.

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A version of this article appeared in the print edition of The Straits Times on December 03, 2016, with the headline 'Childcare crisis'. Print Edition | Subscribe