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Family Matters No. 35 - August 1993

Work-related child care: Four Melbourne localities

Peter McDonald

Abstract

Child care cash rebates to be introduced by the Labor government for the first time, potentially extend eligibility for child care support to all families. Whether this potential is realised depends upon the form of child care used. If parents look after the child themselves or if they do not pay the carer, then no cash rebate would be forthcoming. This paper examines work related child care in four localities of Melbourne: Berwick, Werribee, Box Hill and inner Melbourne. The data is drawn from the Australian Institute of Family Studies survey of Australian Living Standards. The differences between the four areas are so great, argues the author, that they call into question policies which are based on national averages. It is clear that some families are much more likely than others to be able to access child care cash rebates simply because of differences in the provision of child care in their local areas. The article looks at the types of care provided - whether it is formal or informal care, who provides the care, and the costs to parents of child care.

The issue of work-related child care featured in both the 1990 and 1993 Federal election campaigns. At the 1990 election, the two parties took distinctly different approaches to the provision of child care support to families. The Coalition Parties, at that time, proposed a tax rebate for child care expenses. The Labor Party proposed an extension of the existing fee relief scheme to private child care centres and to families with middle level incomes and further provision of child care places. The relative merits of these proposals were discussed by this Institute in its AFIT Bulletins No.7 and No.8 (AIFS 1990a; AIFS 1990b).

At the 1993 election, the Coalition Parties no longer recommended tax rebates for child care expenses. Both major parties made commitments to introduce cash rebates alongside the existing fee relief scheme. While there were important differences between the specifics of the child care policies of the two parties, their similarities were much greater than their differences, such that provision of child care support in the form of fee relief and cash rebates could be described as a bi-partisan policy. A detailed comparison of the policies of the two parties at the 1993 election was prepared by the Australian Early Childhood Association (1993).

Child care cash rebates to be introduced by the Labor Government, for the first time, potentially extend eligibility for child care support to all families. Whether this potential is realised depends upon the form of child care that the parents use. If parents look after the child themselves or if they do not pay the child carer, then no cash rebate would be forthcoming. Furthermore, it is unclear at this point what arrangements would apply in cases where the child is cared for by a grandparent, other relative, friend or neighbour where a payment is made.

One of the main difficulties involved in formulating a coherent child care support policy is the fact that parents use a very wide range of child care arrangements. To this time, the main source of knowledge about the forms of child care used by parents has been the Child Care Surveys periodically conducted by the Australian Bureau of Statistics. Because these surveys are relatively small and nationally representative, they do not describe the variation in use of child care for smaller geographic areas.

This paper examines work-related child care in four localities of one city, Melbourne. The differences between the four areas are so great that they call into question policies which are based on national averages. It is clear that some families are much more likely than others to be able to access child care cash rebates simply because of differences in the provision of child care in their local areas.

AIFS Australian Living Standards Study

During the last months of 1991, the Institute's Australian Living Standards Study was conducted in four municipalities in Melbourne, with interviews being conducted with 420- 520 households in each area. The selected households all had children aged less than 20 years. The study addresses the circumstances and needs of families across many spheres of life, one of which was work-related child care.

The four areas were: Berwick, a rapidly-growing, outer south-eastern area consisting mainly of blue- and lower- white collar workers: Werribee, also rapidly growing but in the outer south-west of the CBD with mainly blue-and lower- white collar workers; Box Hill, a middle distance municipality to the east of the CBD with a large proportion of professional and para-professional workers; and Melbourne, the inner area including the CBD itself with its mixture of low- income and high-income families.

In each area, just over 200 interviewed families had at least one child not yet at school. In two areas, Berwick and Box Hill, 44 per cent of these families were families where both parents (or a sole parent) were in paid employment. In the other two areas, Melbourne and Werribee, 38 per cent were in this category. Questions on work-related child care were addressed to these families.

CATEGORIES OF CARE

For the purposes of the paper, work-related child care can be divided into three broad categories:

  • care fully provided by people living in the same household as the child;
  • informal care (relatives, friends, neighbours, paid sitters) with no use of formal care;
  • formal care (family day care, centre care).

Between 17 and 25 per cent of the households where both parents were working or where there was a working sole parent did not require either formal or informal child care because someone in the household looked after the child while the parents were working. In the main, these were couples where one or both parents worked at home or their work hours did not overlap. Occasionally, care was provided by another adult living in the household.

While the percentages using care from within the household were similar across the four areas, the use of formal and informal care was very different. For example, the percentage of these families using formal care ranged from a low of 22 per cent in Werribee to a high of 65 per cent in Melbourne (Table 1).

Types of formal or informal care

Looking in more detail at the types of formal and informal care used by families, the disparity across the four areas is even more striking. Table 2 shows the percentage of children in formal or informal care who go to various types of care on a regular basis (in this Table, a child going to two types of care is counted twice). This measure shows that grandparents provide care in 13 per cent of cases in Melbourne but in 37 per cent of cases in Werribee. 'Other relatives' are not commonly used in any area except for Berwick. The proportion using friends and neighbours is high in Werribee but low in Melbourne. Family day care is used by 10-13 per cent in three areas but by only 3 per cent in Melbourne. Private centre usage ranges from 13- 16 per cent in three areas but was zero in Werribee.

The most spectacular difference, however, was in the use of government-subsidised centres - from 3 per cent in Berwick to 46 per cent in Melbourne (Table 2). Taking centre care as a whole, 60 per cent of children in Melbourne attended some form of centre care compared with just 11 per cent in Werribee.

Costs of care

For 17-25 per cent of families, there was no cost because the care was provided by someone living in the same household as the child, usually the child's parents.

For parents using formal or informal care, the costs to parents of work-related child care varied widely. Table 3 describes the actual amounts paid for child care by parents themselves - that is, the amounts paid by the government in the form of fee relief are excluded. In Werribee, where informal care was most prominent, 37 per cent of families paid nothing for child care; in Melbourne, where formal care was most prominent, only 11 per cent paid nothing. Indeed, in Melbourne, almost half (43 per cent) paid $100 per week or more for work-related child care.

Fee relief

The system of child care fee relief introduced by the government as a result of its 1990 election promises was in place by the time the survey was conducted - that is, fee relief had been extended to parents using private centres and to those on middle incomes. Despite this, among all employed sole parents and couples where both were in paid employment, including those where child care was provided wholly from within the household, only a minority of families benefited from fee relief. The percentages were 22 per cent for Berwick, 13 per cent for Box Hill, 23 per cent for Melbourne and 11 per cent for Werribee.

Local variation in receipt of fee relief was a product of both the extent of use of formal care and the income levels of the families. Among users of formal care, receipt of fee relief was higher in the two low-income outer areas (Berwick, 68 per cent; Werribee, 49 per cent) than in the middle and inner areas (Box Hill, 27 per cent; Melbourne, 36 per cent). The low level of receipt of fee relief in Box Hill relates more to high family incomes than to low usage of formal care. On the other hand, Werribee has the lowest level of receipt of fee relief despite the fact that it is the lowest income area, a product of the low use of formal care in Werribee.

Time spent in formal care

If in formal care, the amount of time children spend in formal care is much greater in the outer areas compared with the middle and inner areas. For example, the average hours children spent in centre care were 37 hours per week in Berwick and 36 hours in Werribee compared with 28 hours in Melbourne and 24 hours in Box Hill. Likewise, family day care was used for an average of 30 hours per week in Werribee and 27 hours in Berwick compared with 19 hours in both Melbourne and Box Hill.

Thus, in the two outer areas, there was a strong association between the use of formal care and full-time work. In Box Hill and Melbourne, formal care was frequently used in association with part-time work.

Area expenditure per child

Using all pre-school children in the municipality as the base (that is, 100 per cent of pre-school children living in each area, irrespective of the work patterns of their parents), the average amounts spent on work-related child care per child resident in each area are shown in Table 4. Weekly amounts paid by families ranged from $7.23 per child resident in Werribee to $22.86 per child in Melbourne. Expenditure on fee relief ranged from $1.79 per child in Box Hill to $3.20 per child in Berwick.

Conclusion

One of the myths of recent policy debate is that young families who settle in the new urban fringe areas move long distances from their informal networks and thus cut themselves off from opportunities for assistance such as informal child care. The Institute's Australian Living Standards Survey shows that, on the contrary, they are often close to their informal networks and make use of them. For example, the most prominent form of care in Werribee was grandparent care. Indeed, most of the grandparents providing care actually lived in Werribee itself. In contrast, the middle class families in Box Hill tended not to use relatives as carers despite the fact that grandparents often lived nearby.

Despite a higher level of receipt of fee relief among users of formal care in the two outer areas (Berwick and Werribee), formal care is much less likely to be used in these areas than in the middle and inner areas (Box Hill and Melbourne). Is this because the provision of formal child care is better in the inner areas? Is it because formal child care is more available on a part-time basis in the inner areas? Is it because those in the outer areas are unable to afford formal care despite their higher eligibility for fee relief. Or does it reflect differences in preferences, perhaps related to class differences in the use of informal networks? These questions are being addressed in on-going analysis of the Australian Living Standards Study.

References

  • Australian Early Childhood Association (1993), Major Parties' Child Care Policies Compared, Australian Early Childhood Association, Canberrra
  • Australian Institute of Family Studies (1990a), The Coalition Parties' Family Tax Package, AFIT Bulletin No.7, Australian Institute of Family Studies, Melbourne.
  • Australian Institute of Family Studies (1990b), Taxes, Families and the Labor Party,1990, AFIT Bulletin No.8, Australian Institute of Family Studies, Melbourne.