Currently the top discussion trending on Mindhive is “Childcare – can it be free for everyone?”

The Australian childcare system has always been a hot topic for political debate. However, the Federal Government’s recent decision to make childcare services fee-free for 3 months has highlighted the need for system reform. 

Australia has some of the highest out-of-pocket costs for Early Childhood Education and Care (ECEC) in the world. A 2020 KPMG study on the workforce disincentive rate faced by Australian families, found that secondary earners gain little-to-no income benefit when working an extra day and utilising childcare. Furthermore, with our workforce participation rate among women aged 15-64 years at 73.1%, compared to 82% for men, it is evident that Australian mothers are being unfairly disadvantaged. Without even considering the strain on financial and personal wellbeing of parents, these facts justify why many believe we can be providing greater support to Australian families. 

Make It Free and The Parenthood are calling on the Federal Government to make childcare free for everyone. 

But what does free childcare look like? What are the positives for families, society and the economy?   

Looking at international examples of free childcare helps to understand what it actually entails, and if it can be successful within society. 

Firstly, free childcare for low-income families is a beneficial scheme in several countries around the world. In Finland, the Government allocates 0.6% of the GDP to childcare, with low-income families being exempt from childcare fees and all children receiving 20 hours of free pre-primary school education a week. Similarly, Denmark offers free childcare to low-income families and subsidises 70% of costs for middle to high income families. Further discounts also exist for each additional child in the family. The same can be seen for low-income families in Sweden, seeking childcare for children aged under 3 years. Additionally, Swedish parents are entitled to 525 hours of free pre-school education. Lastly, low-income families in Norway receive 20 hours of free childcare a week for children aged 2-5 years. As well as this, the Norwegian Government subsidises 80% of childcare costs for middle to high income families.  

These efforts to make childcare affordable and universal have had a dramatic effect on the wellbeing of parents and children in these respective countries. Research conducted in 2016 by Glass, Simon and Anderson studied parental happiness within Finland, Norway and Sweden. This research found that parents within these countries reported a higher level of happiness than non-parents, and countries with reduced childcare costs through social policy increased parental happiness. Additionally, the research found that lower childcare costs led to greater happiness in parents with children of all ages. This suggests that subsidised childcare costs had a positive long-term impact on a parent’s employment, financial savings and feelings of social inclusion. 

Research conducted by Norwegian childcare expert, Tarjei Havnes, has also revealed the benefits of universal childcare on Norwegian children. Havnes’ research found that the 1997 universal childcare reform in Norway and subsequent increase in children attending childcare, resulted in increased educational attainment and labour force participation. Furthermore, this suggested that universal childcare could decrease the gender pay gap and allow for inter-generational income mobility. 

However, the golden example of free and universal childcare can be seen in Berlin, Germany. In August, 2018, the Berlin State Government abolished all childcare fees, except for two small monthly fees covering food and extra-curricular activities. Michael Katerla, Communications Manager at The Parenthood, was a beneficiary of this free childcare while living and raising his three children in Berlin. Michael’s two boys attended childcare from 9am-4pm every weekday, where all meals were provided for the two children.

“Besides the $100 per month for food we didn't need to pay anything…. if we had had to pay for daycare as much as here in Australia, we couldn't have sent the kids full time, probably not even three days a week.”

Michael also shared the positive impacts of free childcare made on his career and life at home. 

“Free childcare gave both of us the option to return to the workforce again fairly early and I feel that neither my wife nor me had to take any big sacrifices regarding our careers.” It also “gave me some kind of peace of mind which is so important as every parent probably agrees. I was more relaxed and could really be the parent I wanted to be.” 

In conjunction with this, Michael also emphasised how free childcare has reinvigorated Berlin as a city. 

“Since 2013, every child has had a legal right to a kindergarten place from their first year and Berlin has invested heavily in the expansion of childcare for infants and school children. This had a really positive effect as there are now so many small businesses in Berlin which wouldn't exist if daycare wasn't free. People have the freedom to be creative and really that is something Berlin is now famous for.”

This research, as well as Michael Katerla’s insights, collectively confirm the success of affordable and universal childcare within several countries around the world. It’s time that the Australian Government listens to the petitions of Make It Free, The Parenthood and Australian families and businesses, to make childcare free for everyone.