The federal government currently contributes to the funding of physical infrastructure
for childcare facilities. However, meeting gaps in the quality of childcare may also require
more qualified personnel.
The federal government makes no contribution to full-day
compulsory schooling. The long-term benefits of investment in childcare and full-day
schooling are likely to accrue nation-wide, generating positive economic externalities for
other jurisdictions. Therefore there is a case for the federal government to play a strong
role in funding such services.
Constitutional barriers prevent federal co-funding for
full-day primary education. In view of the large benefits of full-day primary schooling,
there is a case for reviewing these constitutional barriers. There also is a case for
disbursing federal subsidies for childcare in a way which takes into account parental
preferences. A scheme of vouchers, linked to a nation-wide accreditation system, could
ensure that supply adjusts better to parental demand.