TNK 0.32% $3.09 think childcare group

I've had some time to analyse the upcoming changes in child care...

  1. 599 Posts.
    I've had some time to analyse the upcoming changes in child care policy.  I'll give my thoughts on each proposal:

    Activity Test

    Any family with a Stay-At-Home parent, will either be ineligible or have subsidies significantly decreased.  It is estimated 100k mums (15%) wouldn't pass a 24 hour / fortnight activity test.  This is the big proposed change, and I expect Labour to try fight this one, and it is the biggest issue child care centre staff will be liasing with affected families.  Funds from these families will be effectively transferred to increased subsidies for low income working families.  Could have a significant impact on lower income families in higher unemployment suburbs.

    Ratios
    Will increase fees significantly in 2016.  More so in NSW and QLD, but VIC will take hit too.   This could means fees increase next year by 10%+ (just my speculation). There is a risk that some families may find alternative care or stay home.  There is also a risk of reduced margins from increased costs.

    Nannies
    250m / 2 years for shiftworkers and rural families.   No impact on corporates as these families wouldn't have been looking for long day child care in major cities.

    Vaccination
    No Vaccination, no child care subsidy.  Won't affect anything, less than 1% of total families.

    Benchmarking
    A rebate will now be calculated on a lower benchmark fee in line with lower fee centres.  Will affect premium high fee centres significantly, while having neutral or positive impact on those at or below the benchmark.  

    Rebate Distribution
    Will increase and decrease at the lower and higher income ends.  This will highly benefit low income and single parent families.  Whether higher income families on about 200k choose other arrangements when out of pocket fees increase, I'm not sure.  Overall I think this is net win for the industry, but could impact some premium centres and high income families.

    No Cap
    The biggest proposed benefit to child care centre funding.   Instead of hitting a cap in rebates with months to go in the year, full-time working families on low incomes will gain rebates all year round.

    Increased Funding Pool
    I read that if the all the proposed changes go through, there will be a significant increase in funding in the coming years to the child care sector (all types of child care, including centres).  I read speculative figures of about 40% increase by 2018 to $10B up from $7B.
 
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