Proposals for funding improvement worthy of consideration

By Sarah Alexander
28 February 2015

Below are ideas for improving the funding system that have been discussed within our membership over the past 10 years or so.  Successive governments have failed to have courage to make decisions to improve the funding system to better benefit children and raise outcomes for children.


1.  Those who can least afford to pay should have greater access to subsidies than those who can afford to pay

In some countries, such as Germany, what parents are charged by their early childhood service is based on their salary or earnings.  Families with a higher income pay more (up to a maximum level specified by the government) while families who earn less pay less or nothing.


2.  Linking funding to the child, not the service

At present funding is tied to the type of early childhood service and paid directly to providers/ service owners. ECE services are funded directly per hour per child and can charge parents any amount they wish on top of the funding received by government. Funding does not go to the child or parent.  The ECE service can determine the hours of enrolment and when a child must attend in order to access it, along with the fees and additional charges it will require families to pay. The current funding system supports the use of non-parental childcare over childcare by parents and supporting parents to be involved with their child's education.  

Comments volunteered by our members have included:

"The 20 hours payment should go either to parents or to the service depending on the parent’s childcare choice."

"Our country is so focused on the institutionalisation of early childhood and placing children in institutions. The Romanian orphanage approach needs to be totally re-thought and our funding system overhauled so the focus is on children and not on where they can be put during the day."

"A nanny company is advertising “I used to look after my grandchildren for free.  Now I get paid $158.80 a week”.  I think if a nanny service can get government money for grandparents to care for their grand-kids and for parents to care for their friends’ children then parents who give up a paid job to stay home to care for their own child should be entitled to as much money. "

The Office of the Children's Commissioner in 2011 in its inquiry into non-parental education and care of under-2s put forward a recommendation that funding instead be tied to the child. 


3. Directly cover the cost of transport for children living in areas of high socio-economic deprivation


4.  Fund on the Basis of Service Size

"Smaller services and single owner-operated  services have higher on average operating costs per child than services with multiple licences and chain operations.  Funding should reflect the lower cost of larger sizes and give a higher rate of funding to services that don't have economies of scale but  bring the benefits for children and families of being small in-community services."


6. Take Better Control of Kindergartens as a Public ECE Service

"We, the taxpayer actually own around 60% or more of most kindergarten buildings and most of the land and properties that kindergartens are built on. I do not understand why the Government tolerates kindergarten associations acting as private operations and lengthening sessions to provide full-day childcare."


7. Move to the School Model of Funding

"I suggest the early childhood system is changed to be like our school one. Just as there are private schools for parents who have the money there are private ECE services. Private ECE services should not receive the same financial support as kindergartens and community ECE groups unless they agree to be state-integrated. "


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