Labour Cost in Family Day Care in Australia

Abstract

n Australia, there are currently around 10,500 workers providing formal funded child care in either their homes or the homes of the children. They provide care for approximately 95,000 children countrywide and span across the many geographical regions o f the country. They provide care in both standard and non-standard hours.

The purpose of this study is to determine the economic, social and institutional factors that determine the costs of providing family day care services (FDC) across geographical areas in Australia. The study was based on three sets of data: a web-based financial survey designed to elicit basic financial and activity data for the agencies. The survey was sent in mid 2008 to all national providers obtaining useable response rate of45%. The second data set was qualitative data obtained from in-depth interviews with 10% o f all FDC agencies.

The last data source was administrative data from the Australia's Department of Employment, Education and Workplace Relations. Econometric analysis of expenditure by FDC agencies identified that expenses is largely determined by the number of full time equivalent places with organisational structure explaining 84% of the variation. Staff costs inclusive of on-cost account for just over 70 per cent o fall costs.

Qualitative data identified recruitment of new careers, quality assurance and accreditation, training and supporting careers, with high needs children as the main cost drivers. The paper concludes by providing evidence of the important role that this sector plays in Australian childcare industry and examples o f innovative steps being undertaken by providers to ensure continued financial viability.