The 2021-22 Budget includes the following measures which will affect the Early Childhood Education and Care sector:
Extension of the National Partnership on Universal Access to Early Childhood Education
The NPA will be extended for four years, rather than the one-year extensions offered in each of the past two Budgets. The focus will remain on supporting 600 hours of preschool in the year before school, rather than the hoped-for extension to the two years before school, with annual funding remaining at similar levels to previous years. Moreover, funding will be conditional on the states and territories achieving reforms that increase attendance and school readiness. Funding will be included to support the annual National Early Childhood Education and Care Collection (NECECC) from early 2023.
These reforms will include that, from 2023, the Commonwealth funding per child enrolled in an approved preschool program is provided irrespective of the setting. The anticipated national average figure in 2022 is $1,340. For NSW community preschools, this represents less than 20-25% of their annual state funding through Start Strong. However, this could mean increased direct funding to long day care services for their preschool programs.
From 2024 payments to states and territories will be tied to attendance targets, rather than the current enrolment targets. A preschool outcomes measure targeting school readiness, will be developed and trialled for introduction in 2025.
This commitment to the extension of the National Partnership Agreement is certainly welcomed, however, applying this funding across many service types will be a challenge for State and Territory governments and we will be advocating strongly for current policies to remain in place whilst trying to improve access for all children.
Changes to the Child Care Subsidy system for long day care
As previously announced by the Government, the Child Care Subsidy payable to families will be increased by up to 30 percentage points to a maximum of 95%, but only for the second and subsequent children in care. The annual subsidy cap of $10,650 will also be removed for those families. However, as well as the delay in commencement date and exclusion of first and/or only in-care children, the changes will only apply to children five years and under (i.e. in settings such as long day care, but not out of school hours care). The removal of the annual cap for eligible children commences on 1 July 2022. The increase in CCS rates for eligible children commences on 11 July 2022 (to align to CCS fortnights).
This longer wait for any new investment is a concern as families try to re-engage in the workforce and try to balance out spending on fees for education.
Other ECEC measures
- $16.9 million over four years from 2021-22 (and $0.6 million per year ongoing) to streamline the child care regulatory system by building a single government website to better inform families’ choice of care, and to reduce the administrative burden on providers and families that can arise from changes in Child Care Subsidy eligibility.
- The Government will provide $17.9 million over four years from 2021-22 to establish a new Early Childhood Program for Children with Disability or Developmental Concerns. The program will deliver a range of disability-specific information, workshops and supported playgroups for young children aged 0 to 8 years with disability or developmental needs. The cost of this measure will be partially met from existing funding within the Social Services portfolio.
Other budget measures
- Removing the $450 per month threshold for superannuation guarantee eligibility. The Government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid the superannuation guarantee by their employer. However, the measure will not have effect until the start of the first financial year after Royal Assent of the enabling legislation, which the Government expects to have occurred prior to 1 July 2022.
- Boosting Apprenticeship Commencements wage subsidy. The commencement date for eligible apprentices and trainees engaged under this scheme will be extended by a further six months to 31 March 2022. This year’s budget will uncap the number of eligible places and increase the duration of the 50 per cent wage subsidy to 12 months from the date an apprentice or trainee commences with their employer. From 5 October 2020 to 31 March 2022, businesses of any size can claim the Boosting Apprenticeship Commencements wage subsidy for new apprentices or trainees who commence during this period. Eligible businesses will be reimbursed up to 50 per cent of an apprentice or trainee’s wages of up to $7,000 per quarter for 12 months.
You can read the Budget Overview here.
CCSA will be meeting with NSW Department of Education in the coming days to discuss any further impacts and opportunities in the Budget, and will update you as any information becomes available.