September 4, 2025 • 9 mins
The federal government has commissioned a new report into universal childcare, taking a big step towards reforming the system.
Natalie MacDonald is joined by Georgie Dent, CEO of The Parenthood, to explore what universal childcare looks like, and why it's important for families, business and the economy.
Fear & Greed Q+A: Join Sean Aylmer & Michael Thompson and the team as they answer questions on business, investing, economics, politics and more. If you have your own question, get in touch via our website, LinkedIn, Instagram or Facebook!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Welcome to Fear and Greed Q and A where we
ask and answer questions about business, investing, economics, politics and more.
I'm Natalie McDonald and today what is universal childcare and
how could it change Australian business. Recently, the Federal government
took the first step towards a universal childcare system, hiring
Deloitte to work out what it would look like and
(00:28):
how much it would cost. Georgie Dent is CEO of
the Parenthood, Australia's leading parent advocacy organization. Georgie, Welcome to
Fear and Greed Q and.
Speaker 2 (00:37):
A thank you so much for having me Natalie.
Speaker 1 (00:40):
Firstly, Georgie, I'd love to drill down into the jargon
a little bit for those who may be out of
their child rearing years or yet to arrive there. What
do we mean when we talk about universal childcare?
Speaker 2 (00:53):
So it's a really good question, and to be honest,
there are various definitions of what a universal early childed
education and care system would look like. I suppose the
way that the parenthood we would describe it is being
more similar to schools or hospitals. So when you have
a child who is of school age, you can enroll
them in your local primary school, and nobody will ask
(01:16):
how much money you make, how often you work, what
you do for a living. Your child will be entitled
to participate in the school by virtue of them being
a child. In Australia and moving towards a universal childcare
system is really about saying this infrastructure, the ability for
children to participate in high quality, affordable early education and
(01:39):
care is critical. It doesn't mean it's compulsory, but when
that piece of infrastructure isn't there, the choices and opportunities
for children, for parents and communities are greatly diminished. And
that's why it is. You know, I have described it
previously as sort of you know, the infrastructure project Australia
(02:00):
needs more than anything else.
Speaker 1 (02:01):
There have been comparisons made as far as the funding
and the payment system goes with Canada. Is that with
the Canadian model be considered a gold standard? Is there
a gold standard when we look at the various models
and compare them with what we currently have.
Speaker 2 (02:19):
So here in Australia we have got a childcare subsidy
that the federal government pays and that's basically the amount
of subsidy you get can range from sort of you know,
ninety five percent if you're on incredibly low income, but
it can also be you know, as little as you
might get twenty percent or twenty five percent of the
fee subsidized at the parenthood We have been critical of
(02:45):
the childcare subsidy as a funding mechanism for early education
and care because it is really inefficient. The A Triple
C did a big report into early education and care
that it published at the beginning of twenty twenty four,
and they said the childcare sub has had limited effectiveness
at putting any downward pressure on prices. So any early
(03:08):
learning service is entitled to charge whatever fees they like. Now,
what they tend to do is set up. They're more
often and more likely to set up in areas where
parents have got a higher capacity to pay high out
of pocket fees, because that's where it obviously becomes more
viable and more profitable, and the childcare subsidy funding mechanism
(03:29):
explains why. Then we've got parts of the country where
it's harder for a provider to make a profit, so
they're less likely to set up in an area where
families have got fewer resources, less capacity to pay out
of pocket fees, and so what the childcare subsidy has
done is it's driven up the out of pocket cost
for early education and care really considerably, so it has
(03:51):
risen considerably faster than inflation for the last five years.
It's also led to this situation we have where apply
really does depend on your postcode. And the other big
issue with the childcare subsidy in its current format is
that it hasn't had any impact at driving quality. So
(04:15):
we've had this situation where your ability to collect that
subsidy has not been determined by are you meeting all
of the minimum standards, are you investing appropriately in your staff,
what does your professional development look like? What is your
quality rating? So the funding has been quite disconnected from
(04:37):
the out of pocket cost, from supply from quality. And
the argument that we've been making is let's fund early
childhood education and care service directly so that we can
ensure services are being set up in every community where
there are children who need it, that services are completely
affordable for all families, and that the quality is the
(05:01):
high standard we need for children to benefit.
Speaker 1 (05:05):
A lot of this does drill down into the heart
of you have a sector that is largely privately held.
If Georgie, if I'm understanding right then, and without wanting
to tangent too far, you're saying that a change in
funding models could close the gap on issues around child's
safety as well, if we're looking at those minimum standards. Obviously,
(05:25):
this is a topic that is so much in the
parental discourse at the moment.
Speaker 2 (05:29):
So look, you know, there's two economic reasons for investing
in early child education and care. One of them is
the education and development of children. So we know that
when children have the opportunity to participate in high quality
early education and care before they start school, they're far
more likely to arrive at school developmentally on track. We
(05:50):
know that kids who have access to high quality early learning,
they over the course of their lives, they will enjoy
improved outcomes on health, social educational outcomes, and their economic trajectory.
The zero to five window is quite literally magically profound
in the development of children. And so when you have
(06:13):
high quality services and you get children having the auction
to participate before they start school, you quite literally secure
our future prosperity and future productivity. The second reason to
invest in all education and care is because it is
critical infrastructure that enables parents to participate in the paid workforce.
(06:33):
This is of course in the economic interests of individual
households who have most of whom rely on paid work
to feed, house care for their children, to raise a family.
But it's also good for the economy because the more
that parents are working, the bigger the revenue pile is
for the government. And they're the two sort of defining
(06:55):
features that we believe a new funding model should ultimately
be delivering.
Speaker 1 (07:01):
It speaks to how critical it is the benefits of
getting this right for business, for the economy, as well
as of course family and children at the center of that.
As we discussed labor commissioning, Deloitte launch a two year
study of demand and costs. My sentiment would be that
this is far too lead to help families who are
currently in the dieped up depths of the cost of
(07:21):
existing crisis. But from a tangible outcome perspective, are you
hopeful of this leading somewhere?
Speaker 2 (07:28):
So Deloitte has been asked to look at what does
it actually cost to deliver high quality early education and care?
And you know you're right when you say you know
this maybe isn't fast enough for families right now, and
it's not I would have loved for this work to
have been commissioned a decade ago. Two decades ago would
have been even better. But the main thing is this
(07:49):
work is being done, and why this is critical is
if we don't know what it costs to deliver quality
early education care, it's really difficult to be designing and
effective funding model to achieve those objectives. But because we
have got a highly fragmented system where we've got state
run preschools, we've got community run early education care, we've
(08:10):
got a lot of private provision of long daycare, it
means we don't have line of sight right now of
exactly what it costs to deliver early education. And if
we don't know what it costs, then we don't know
the extent to which the funding model is or isn't
delivering on the objectives it needs to be.
Speaker 1 (08:29):
And to your point around the puzzle pieces that come together,
I would concede that, of course the government's changes to
paid parental leave, also the changes to seeperannuation definitely if
you zoom out, improve that that overall picture. Georgie, thank
you so much for talking to your fear and Greed
and sharing your insights.
Speaker 2 (08:46):
Thank you so much, Natalie for having me. I really
appreciate it.
Speaker 1 (08:49):
That was Georgie d and CEO of the Parenthood. If
you've got something you'd like to know, then send through
your question on LinkedIn, Instagram, Facebook, or at Fairangreed dot
com dot au. I'm Nashie Matt Child and this is
Ferm Breed Q and AM
Welcome to Fear and Greed Q and A where we
ask and answer questions about business, investing, economics, politics and more.
I'm Natalie McDonald and today what is universal childcare and
how could it change Australian business. Recently, the Federal government
took the first step towards a universal childcare system, hiring
Deloitte to work out what it would look like and
(00:28):
how much it would cost. Georgie Dent is CEO of
the Parenthood, Australia's leading parent advocacy organization. Georgie, Welcome to
Fear and Greed Q and.
Speaker 2 (00:37):
A thank you so much for having me Natalie.
Speaker 1 (00:40):
Firstly, Georgie, I'd love to drill down into the jargon
a little bit for those who may be out of
their child rearing years or yet to arrive there. What
do we mean when we talk about universal childcare?
Speaker 2 (00:53):
So it's a really good question, and to be honest,
there are various definitions of what a universal early childed
education and care system would look like. I suppose the
way that the parenthood we would describe it is being
more similar to schools or hospitals. So when you have
a child who is of school age, you can enroll
them in your local primary school, and nobody will ask
(01:16):
how much money you make, how often you work, what
you do for a living. Your child will be entitled
to participate in the school by virtue of them being
a child. In Australia and moving towards a universal childcare
system is really about saying this infrastructure, the ability for
children to participate in high quality, affordable early education and
(01:39):
care is critical. It doesn't mean it's compulsory, but when
that piece of infrastructure isn't there, the choices and opportunities
for children, for parents and communities are greatly diminished. And
that's why it is. You know, I have described it
previously as sort of you know, the infrastructure project Australia
(02:00):
needs more than anything else.
Speaker 1 (02:01):
There have been comparisons made as far as the funding
and the payment system goes with Canada. Is that with
the Canadian model be considered a gold standard? Is there
a gold standard when we look at the various models
and compare them with what we currently have.
Speaker 2 (02:19):
So here in Australia we have got a childcare subsidy
that the federal government pays and that's basically the amount
of subsidy you get can range from sort of you know,
ninety five percent if you're on incredibly low income, but
it can also be you know, as little as you
might get twenty percent or twenty five percent of the
fee subsidized at the parenthood We have been critical of
(02:45):
the childcare subsidy as a funding mechanism for early education
and care because it is really inefficient. The A Triple
C did a big report into early education and care
that it published at the beginning of twenty twenty four,
and they said the childcare sub has had limited effectiveness
at putting any downward pressure on prices. So any early
(03:08):
learning service is entitled to charge whatever fees they like. Now,
what they tend to do is set up. They're more
often and more likely to set up in areas where
parents have got a higher capacity to pay high out
of pocket fees, because that's where it obviously becomes more
viable and more profitable, and the childcare subsidy funding mechanism
(03:29):
explains why. Then we've got parts of the country where
it's harder for a provider to make a profit, so
they're less likely to set up in an area where
families have got fewer resources, less capacity to pay out
of pocket fees, and so what the childcare subsidy has
done is it's driven up the out of pocket cost
for early education and care really considerably, so it has
(03:51):
risen considerably faster than inflation for the last five years.
It's also led to this situation we have where apply
really does depend on your postcode. And the other big
issue with the childcare subsidy in its current format is
that it hasn't had any impact at driving quality. So
(04:15):
we've had this situation where your ability to collect that
subsidy has not been determined by are you meeting all
of the minimum standards, are you investing appropriately in your staff,
what does your professional development look like? What is your
quality rating? So the funding has been quite disconnected from
(04:37):
the out of pocket cost, from supply from quality. And
the argument that we've been making is let's fund early
childhood education and care service directly so that we can
ensure services are being set up in every community where
there are children who need it, that services are completely
affordable for all families, and that the quality is the
(05:01):
high standard we need for children to benefit.
Speaker 1 (05:05):
A lot of this does drill down into the heart
of you have a sector that is largely privately held.
If Georgie, if I'm understanding right then, and without wanting
to tangent too far, you're saying that a change in
funding models could close the gap on issues around child's
safety as well, if we're looking at those minimum standards. Obviously,
(05:25):
this is a topic that is so much in the
parental discourse at the moment.
Speaker 2 (05:29):
So look, you know, there's two economic reasons for investing
in early child education and care. One of them is
the education and development of children. So we know that
when children have the opportunity to participate in high quality
early education and care before they start school, they're far
more likely to arrive at school developmentally on track. We
(05:50):
know that kids who have access to high quality early learning,
they over the course of their lives, they will enjoy
improved outcomes on health, social educational outcomes, and their economic trajectory.
The zero to five window is quite literally magically profound
in the development of children. And so when you have
(06:13):
high quality services and you get children having the auction
to participate before they start school, you quite literally secure
our future prosperity and future productivity. The second reason to
invest in all education and care is because it is
critical infrastructure that enables parents to participate in the paid workforce.
(06:33):
This is of course in the economic interests of individual
households who have most of whom rely on paid work
to feed, house care for their children, to raise a family.
But it's also good for the economy because the more
that parents are working, the bigger the revenue pile is
for the government. And they're the two sort of defining
(06:55):
features that we believe a new funding model should ultimately
be delivering.
Speaker 1 (07:01):
It speaks to how critical it is the benefits of
getting this right for business, for the economy, as well
as of course family and children at the center of that.
As we discussed labor commissioning, Deloitte launch a two year
study of demand and costs. My sentiment would be that
this is far too lead to help families who are
currently in the dieped up depths of the cost of
(07:21):
existing crisis. But from a tangible outcome perspective, are you
hopeful of this leading somewhere?
Speaker 2 (07:28):
So Deloitte has been asked to look at what does
it actually cost to deliver high quality early education and care?
And you know you're right when you say you know
this maybe isn't fast enough for families right now, and
it's not I would have loved for this work to
have been commissioned a decade ago. Two decades ago would
have been even better. But the main thing is this
(07:49):
work is being done, and why this is critical is
if we don't know what it costs to deliver quality
early education care, it's really difficult to be designing and
effective funding model to achieve those objectives. But because we
have got a highly fragmented system where we've got state
run preschools, we've got community run early education care, we've
(08:10):
got a lot of private provision of long daycare, it
means we don't have line of sight right now of
exactly what it costs to deliver early education. And if
we don't know what it costs, then we don't know
the extent to which the funding model is or isn't
delivering on the objectives it needs to be.
Speaker 1 (08:29):
And to your point around the puzzle pieces that come together,
I would concede that, of course the government's changes to
paid parental leave, also the changes to seeperannuation definitely if
you zoom out, improve that that overall picture. Georgie, thank
you so much for talking to your fear and Greed
and sharing your insights.
Speaker 2 (08:46):
Thank you so much, Natalie for having me. I really
appreciate it.
Speaker 1 (08:49):
That was Georgie d and CEO of the Parenthood. If
you've got something you'd like to know, then send through
your question on LinkedIn, Instagram, Facebook, or at Fairangreed dot
com dot au. I'm Nashie Matt Child and this is
Ferm Breed Q and AM
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