We may be living in a hyper-partisan environment where everything is endlessly debated, but if there is one topic where we need more argument - not less - it is childcare policy.
Over the past decade across Coalition and Labor governments, childcare has become way more expensive for taxpayers and no cheaper for parents, while there is no clear evidence of improved outcomes for children, and also parents overwhelmingly aren't happy with the available options.
Yet somehow only recently both sides of politics want to change course: while the Albanese government considers a universal childcare policy to limit the cost for parents, the opposition is looking into more flexible choice options. The prospect of an election debate about substantive differences in childcare policy is welcome and overdue.
And changes can't come quickly enough. Childcare fees are rising much faster than inflation and wages. The latest Productivity Commission figures show the median weekly cost increased by 32 per cent in real terms between 2016 and 2025.
Subsidies have also ballooned. Canberra's recurrent expenditure on childcare reached $16.2 billion in 2025, and total federal and state government spending reached $20.4 billion, almost $13,000 per child in formal childcare - a 57 per cent per-child real increase from 2016.
Childcare policy is at war with itself. Subsidies keep rising, but so do costly regulations, leaving parents no better off.
In response to safety concerns following some horrific cases in childcare centres, inevitably safety regulations will increase. We should consider if the non-safety-related regulations could possibly be reduced, to help offset the added cost to parents and taxpayers of increasing safety compliance, especially if we go down the path of universal childcare.
Both the ACCC and the NSW Productivity Commission have argued that increasing subsidies reduces parents' out-of-pocket expenses only in the short-term; requiring more subsidies to offset further increases in fees.
If this left children happier, safer and more prepared for school, perhaps the additional cost is worthwhile.
But evidence shows no uniform benefit: formal childcare doesn't consistently help under-threes. Evidence is more positive for preschool in the year or two before school.
The recently released First Five Years study by the Department of Education is a significant contribution to the evidence base. One of the notable findings is that, after comprehensively adjusting for children's backgrounds, attending formal childcare - regardless of the extent to which childcare centres met the standards - increases the overall risk of child developmental vulnerability, compared to attending preschool alone.
The increase in risk is most prominent for the non-cognitive measures of emotional maturity and social competence. To the extent there is any benefit of formal childcare, it is regarding cognitive measures; though intuitively these are easier for schools to address through high-quality early literacy and numeracy instruction, so arguably developmental vulnerabilities on non-cognitive measures may be more concerning.
The one-size-fits-all approach of providing financial support only for families choosing formal, highly regulated childcare, combined with simplistic generalisations about childcare being good for children, has pushed households into decisions about combining work and family they may not otherwise have made.
Parents desire greater choice. A 2019 CIS survey with YouGov of 521 working mothers found more than half would prefer greater access to informal care such as that provided by a grandparent or friend.
Two-thirds supported government subsidies for informal care, even if this meant receiving less financial support overall.
These findings are consistent with more recent polling from the NSW Productivity Commission in 2023 and new polling this year from the advocacy group Childcare Choice, which found a similar figure of two-thirds endorsing more flexible subsidy options - with equal support from Coalition and Labor voters.
One alternative approach is to add a new category or two of approved childcare that attracts subsidies, such as hiring a nanny or an au pair.
Unfortunately, this would not fundamentally expand choice - but would almost certainly drive up costs for the new categories.
Can you imagine the new regulations around nannying as a newly subsidised industry? A nanny regulator, certified nanny training, a nanny safety commissioner ... and probably a requirement to have a bachelor of nannying would soon be coming our way.
But this would not fundamentally expand choice - and would almost certainly drive up costs for the new categories.
Another option is for the federal government to make a simple means-tested cash payment to every family, which they could then use however they wish.
This would be similar to how we already give parents payments through the family tax benefits and trust them to decide what is best for their own children.
And this doesn't necessarily require more taxpayer funding.
To give a sense of how much we already spend on childcare subsidies: the federal government could instead give every family in Australia a yearly $9000 cash payment per child for every child under six, and this would be the same total cost to the budget.
Direct financial assistance to parents is more efficient than subsidising the formal childcare industry, as it empowers parents to consider their own employment situations and child's needs, and then make a decision that works best for them.
But even if we prefer the universal childcare option, the indisputable fact remains that currently we're failing to improve outcomes for kids, choice for parents, and affordability for taxpayers.
We can find a better way if we're willing to debate it.
