CHEAPER PRE-SCHOOL WOULD LEAD TO UP TO 24,000 MORE KIDS FINISHING SCHOOL: NEW REPORT
5 December 2023 – Making pre-school more affordable for families would lead to more children finishing school, lower unemployment, less crime and better health outcomes, according to new research from Impact Economics and Policy.
But the research, which was released in partnership with Minderoo Foundation’s Thrive by Five campaign, found recent announcements of free pre-school in NSW and Victoria are being undermined by the Federal Government’s Activity Test.
The test determines how many hours of subsidised childcare families receive based on the number of hours they work, study or do other approved activities like volunteering.
Minderoo Foundation’s Jay Weatherill said the new report provided yet more evidence that the Activity Test should to be scrapped.
“There is a mountain of evidence showing the benefits of early childhood education, but kids are currently being robbed of this opportunity just because their parents do not meet some arbitrary threshold,” Mr Weatherill said.
The research found between 18,100 and 23,900 more Australian children would finish high school if two years of pre-school was made universally accessible. The benefits from increased school retention would add up to $27.3 billion to the economy.
The total lifetime benefits of increasing access to two years of pre-school would add up to $40.9 billion to the economy through increased earnings and less need for social services such as Centrelink.
Impact Economics and Policy lead economist Dr Angela Jackson said the numbers were the hard evidence policy-makers needed to make pre-school universally accessible and affordable.
“Allowing more three and four-year-olds to go to pre-school would not only benefit the children and families themselves, there would be flow-on impacts for Government and the whole of society,” Dr Jackson said.
“It would address so many of the current challenges we face, from the cost of living to women’s workforce participation. And crucially, making pre-school more affordable would be non-inflationary.”
The research found that even with new pre-school policies in NSW and Victoria, parents subject to the Activity Test will still need to pay between $7,000 and $24,000 per child over two years.
Mr Weatherill said this would be unaffordable for many middle and low-income families.
“There’s a belief that the reforms we’ve seen in NSW and Victoria and which are also being considered in Queensland, South Australia and Tasmania will make pre-school more affordable for families.
“However, this analysis shows state-based reforms will be significantly undermined if families continue to be subject to the activity test. Governments are effectively giving to families with one hand and taking away with the other.”
The Productivity Commission, ACCC and Women’s Economic Equality Taskforce have all recommended the activity test be amended or abolished.
Media contact: Iona Salter (Essential Media), 0413 185 634
