Child care plays an important economic and social role in Australia. For parents, it supports their participation in employment, education and training. For children, quality care can support child development, particularly for vulnerable and disadvantaged children and their families.

In July 2018, the Australian government introduced the Child Care Package as a significant reform to child care provision and funding. It involved a major restructuring of subsidies and a range of other measures, and significant additional government expenditure. The core objectives of the package are to support families to be able to access quality early learning, enable and encourage greater workforce participation and simplify child care payments, and targeting assistance to low and middle income families. Its goal was for child care to be 'simpler, more affordable, more accessible and more flexible'.

The new Child Care Package has 2 key elements:

1. Child Care Subsidy (CCS) - this is the main form of Australian government financial support to parents as a subsidy for child care costs.
2. The Child Care Safety Net

The evaluation primarily considers the impact of the new child care subsidy system (comprising the Child Care
Subsidy (CCS), Additional Child Care Subsidy (ACCS) and the Community Child Care Fund (CCCF). It also covers
the Inclusion Support Program and the In Home Care Program, which are subject to separate reporting, with
some findings synthesised into this overall evaluation.

The evaluation drew heavily upon the administrative data on the children’s and families’ use of child care along
with surveys implemented by the Department and by the evaluation team, as well as extensive qualitative data from consultations and location-based case studies. It also drew upon contemporary literature and data published by the ABS and others.

The evaluation assessed the Child Care Package against 4 key outcomes and 3 key impacts that reflected its policy objectives. It largely adopted a comparative focus - whether the Package has had any positive or negative impacts relative to outcomes under the previous funding arrangements.

Recommendations

• Specific recommendations are made about improving processes when children commence care, review of approved hours under the activity test and safety net, especially for those with 24 hours a fortnight, the removal of the annual benefit cap, refinement of aspects of the ACCS, and reviewing the help desks and the calculator.
• More broadly, the evaluation notes there are significant challenges in the provision of early childhood education and care, including the balance between child care as an enabler of parental workforce participation and the role of early childhood education and care in child development and as an instrument to address disadvantage.