Public investment in early childhood: how does Australia compare?
Gerry Redmond and Ilan Katz
Social Policy Research Centre, UNSW
Contact Email:   g.redmondunsw.edu.au

In the past decade there has been an enormous shift in emphasis in social policy towards increased investment in the early years. This has been driven by a combination of neurology - recent findings that experience can impact on physical brain development, and economics - findings that interventions relating to children under the age of three are the most cost effective. This has led to calls for a shift of resources towards early childhood from older children.

In this paper we summarise the economic and neurological arguments for public investment in the early years as opposed to later childhood. We then use two approaches to examine the adequacy of this investment. First, we use aggregate data (from national accounts and other sources) compare levels of public investment in early childhood in Australia and in other rich countries. Second, we use data from fiscal incidence studies applied to nationally representative household expenditure survey datasets for the years 1988-9 to 2003-4 to analyse investment trends in Australia over the past 20 years. Our results are mixed. In terms of total investment in early childhood, Australia appears to sit somewhere around mid-table among OECD countries. However, data for Australia does show that investment in children has increasingly focused on the early years since the 1980s.

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