A Strategic Assessment of the Children's Services Industry

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STRATEGIC ASSESSMENT OF THE CHILDREN’S SERVICES INDUSTRYFigure 5.8: Consumer Price Index: All Australian groups and child care, quarterly,original300.0250.01 July 2000Child Care BenefitIntroducedCCTR has beenincluded indeterminingnet child care cost200.0150.0100.050.00.0Mar‐1982Feb‐1983Jan‐1984Dec‐1984Nov‐1985Oct‐1986Sep‐1987Aug‐1988Jul‐1989Jun‐1990May‐1991Apr‐1992Mar‐1993Feb‐1994Jan‐1995Dec‐1995Nov‐1996Oct‐1997Sep‐1998Aug‐1999Jul‐2000Jun‐2001May‐2002Apr‐2003Mar‐2004Feb‐2005Jan‐2006Dec‐2006Nov‐2007Index Numbers ; All groups ; Australia ;Source: ABS, 2008bThe rate of price increase for child care has consistently been higher than for all goods andservices on an annual basis and quarterly basis since the mid 1990s. The only exception is inSeptember 2000 and September 2007 with the changes in the subsidies or rebates. The childcare costs have been increasing on an annual average basis by 12 per cent since 2002compared to an average for all goods and services of 2.8 per cent.5.3 Observations on Demand and SupplyIn this study, we have considered the macro level of demand and supply of child care.However, it needs to be noted that for child care, unlike other market goods or services, thereare distinct and different micro markets. The nature of child care limits the area and types ofcare that can be accessed. Traditionally, families choose a child care service that is locatedeither close to the employment or close to home (Freeman and Vicary, 2008; Davidoff, 2007).The utilisation rate was given as one measure of demand. This provides the usage of theservice overall, but does not provide detail on the usage patterns by type and geographicallocation. This suggests that - at the aggregate level - supply of children’s services exceedsdemand for long day care and for out of school hours care. Nonetheless 20 per cent of urbanhouseholds have problems accessing sufficient hours of care and 25 per cent fail to find careof adequate quality or care in a suitable location.Another area that has been highlighted in recent research that needs to be explored is thefinancial pressures on families with multiple children in child care. Such families comprise 18per cent of the current users; the concern that arises is the extent to which they are choosingnot to use child care because of the cost of accessing it (Davidoff, 2007; Freedman andVicary, 2008).51
STRATEGIC ASSESSMENT OF THE CHILDREN’S SERVICES INDUSTRY5.4 Gaps in ECEC demand and supply dataIt is important to move beyond aggregate information and to undertake analysis of the childcare market at a more fine-grained level. Freedman and Vicary (2008) emphasise this point,commenting on the difficulty of drawing any useful conclusions from aggregate data. Theypoint to a need for data specifically focused on particular markets, for example, local data onthe children’s residence and use of services. Data on the availability of services needs to beprovided by local government area, not simply by State and Territory.Even at a macro-level, current data probably underestimates demand for child care. ABSChild care Survey estimations of parents need for additional formal care from 2002 and 2005are likely to have underestimated the needs of at least two groups. Firstly, those whocurrently used child care of one type and wished instead to use the same hours of care of adifferent type. For example, to change from using 10 hours of long day care to 10 hours offamily day care. Those currently using child care were only registered as needing additionalformal care if they needed additional hours of formal care. Secondly, those who had anongoing need for child care but had not used it in the past week or needed to use it in the lastfour weeks. For example, someone who needed child care in order to seek and takeemployment would not have registered as needing child care in the previous four weeks, asthey had not yet started work so had not yet needed child care. The 2008 Child care Surveywill examine unmet need for formal care differently and will hopefully address theseunderestimates 7 .In order for more effective market conditions to apply, information needs to be available notonly about the quantity, but also the quality of services available by type and by geographicallocation, disaggregated at the level of local government area. This is in line with theincreasing recognition of the economic benefits of good quality child care (Currie, 2001;Freedman and Vicary, 2001).The need for good quality, fine-grained data is emphasised by DEEWR (2008b: 20).DEEWR operates the Access Hotline which provides information to parents about child careavailability. It has been difficult to collect reliable data which indicates where there is unmetdemand and where there is an oversupply of places. Detailed local information about demandand supply would contribute to the operation of this service for parents.The availability of quality data will be aided by the development by the Australian Institute ofHealth and Welfare of a Children's Services National Minimum Data Set. This was developedby the Children's Services Data Working Group to provide "comprehensive" data on childcare and preschool services. The data set is yet to be implemented.7 Heather Crawford, Australian Bureau of Statistics, personal communication, 18 July 2008.52
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