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Regulation and costs

I recently went on a family holiday to New Zealand and wondered into a childcare centre for a chat with the owner. It was quite interesting to talk with him about various things such as competition, regulation, prices, hiring staff etc.

The thing that I found most interesting was the more relaxed regulation there than we have in Australia. For example, I asked him about an adult sized toilet that I saw and whether they had school aged children or whether that was for staff. He said that it was actually for the young kids and that he believed that it's important to have similar resources at the centre as children have at home so they 'don't fall in'. I immediately agreed with him but pointed out that in Australia we have to have junior toilets (smaller) for children under 6 years old.

I was very aware of this as at a newly opened room for kindergarten and school aged children (4-12yrs) we were forced to rip out the adult sized toilets we installed and replace them with junior ones. We did it because we had to, though this was only a requirement from the Department (our regulator), not the building code as the building complied with everything required. Not only was the time and money ($25,000+) wasted very frustrating, it was even more so because the older children use adult toilets everywhere else (home, school, parks etc) and were coping just fine.

When the owner showed me their outdoor play space I was awed by how fun and interesting it was. I quickly pointed out that we couldn't do half the things they did and that it was great to see that they encouraged risky play. Meanwhile at our centres a recent centre visit from a Department regulator made our staff place mats around a simple outdoor play obstacle that was about a metre high even though it was on our natural grass. The rule is that mats are required on anything higher than 900mm.

Most, if not all, regulations in childcare are there for a reason. However, It would be interesting to assess their impact if possible. For example, are there more safety incidents in New Zealand because the playscapes aren't as 'safe'? And also the counterfactual, perhaps Australian school aged kids have more incidents because they have been wrapped in cotton wool in early education?

How many children have fallen into a toilet because it's too big? That's a strange regulation, though, as I'm not sure what benefit it provides or risk it alleviates to be a specific requirement. If the regulation wasn't there we would still have junior toilets in most rooms because they are probably more practical in toilet training children, but larger toilets in older rooms (3yrs+). As a requirement, surely it's unnecessary.

Cost of childcare

People often bemoan the cost of childcare and that's fair enough, it's more expensive than most private schools. However, it's rarely the fault of the centre owners or management, but rather the strict regulations. Wages, as the largest single cost for all childcare centres, provides the greatest contribution to high prices. Not only do regulations set out specific staff-to-children ratios, they also determine the educational qualifications required. Combined with Australia's relatively high award pay rates, it's simply quite expensive to run a childcare business.

In fact, most nursery rooms for children under 15 months lose money, for example. A quick calculation shows that a 100% full nursery room with 8 children (the typical room size) barely covers the wages of the two staff required (revenue of $800 at $100/day compared to 2 x $25/hr x 10 hours = wages of $500). Include food, nappies, rent, electricity etc and the room probably made a loss even though it was full.

That's okay though as younger children get older and older rooms can make money because the ratio eventually goes up to 1:11. However, it's important to understand the underlying causes of why childcare is expensive in any mature discussion/debate.

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