White Paper: Swipe

Right - Childcare Now

6th of May 2016

The state of
Childcare in
Australia is
unsustainable
with
insufficient
places
accessibility to
appropriate
childcare has a
direct effect on
workforce
participation:
Lets fix this
Baby.

TODAYS SHARING ECONOMY AND

THE SOLUTION TO CHILDCARE
ACCESSIBILITY

CHILDCARE INACCESSIBILITY: ITS

HURTING
Childcare in Australia is an $11Bn industry. The sector consists of
approximately 1.5Million children in-care, with 850,000 families relying upon
some form of formal childcare. There are approximately 16,000 registered
childcare centres attempting to provide the nations childcare demands.
The Productivity Commission identifies that unmet childcare demand is
currently around 600,000 places. In addition, there are approximately
165,000 parents who want to participate in the workforce.
The productivity opportunity for the additional involvement of these parents
equates to an estimated increase in GDP of $1.3Bn/ annum.
Additional socio-economic benefits include: decrease in welfare spends,
decrease in family stress and associated mental illness, as well as an increase in
the educational and developmental opportunities of the children.
The Productivity Commission also states that working age female workforce
participation is 67%. This lags far behind other OECD Nations, with Canada, a
similar country in demographic composition, achieving 80% working age
female workforce participation.

In any childcare
centre, on any one
day, there are
approximately 8%
children absent, this
equates to
approximately
120,000 children
who do not fill their
childcare space on
any particular day.

Although women comprise 60% of all university graduates, Australia is

losing approximately $8Bn a year from women not re-entering the
workforce after graduation. Lack of childcare is a contributing factor and
Australia is losing the opportunity of further economic contribution from
educated and capable working age women.

THE QUESTION IS WHY?

Access to reliable, flexible, childcare services is cited by the Productivity
Commission as the prime inhibitor for parents, and in most cases women,
from participating in the workforce.
NOW heres the irony and the opportunity. Access to flexible childcare is
well documented as having a direct impact upon workforce participation.
However, in any one day, on average, there are approximatly 8%
nationwide absences in childcare centres. This equates to almost 120,000
children who do not present to childcare on any given day due to illness,
holidays or other unspecified family reasons.
Currently there is no efficient and systemic opportunity to realise the
opportunity of these unused places. The process of identifying an available
child, currently on the waitlist, to fill the spot of the absent child is,
extremely mandraulic and time consuming.
This vacancy most often goes unfilled because:

there is little incentive for the childcare centre director to fill that
absent position, as in most cases they do not own the centre and
are therefore not profit driven;

Directors are more inclined to identify the absent child as an

opportunity for minor respite or to focus on other centre based
tasks;

the centre is already being paid for the day that absent child
does not attend;

time and effort it takes to identify a child on a waitlist who is

able to fill that space; and

most absences are identified between 6 and 9am work peak

time).

WHAT IF, through new and emerging mobile and artificial intelligence
technology, those spaces provided by the absent children were able to be
automatically and perfectly matched against the appropriate children on
waitlists? If the gap in workforce participation could be closed, just a bit,
through the use of technology like this What might the difference be?

THE SHARING ECONOMY

OPPORTUNITIES FOR CHILDCARE
Our proposal is consistent with the Federal Governments Innovation
Statement and recent successful disruptive technology such as Uber and
AirBnB. We believe the Childcare industry can take advantage of new and
emerging artificial intelligence and mobile technologies by adopting a
disruptive and participatory approach to solving the endemic problem of
childcare unavailability and unused childcare capacity.
Enabling the parent of the child who is absent (lets call him P1) to on-sell
that spot to a parent in need of a childcare spot (lets call her P2) would
alleviate the issues of accessibility.
This is a model and technology that has been conceived and developed in
Australia and is ready for launch.

WHOA! HOW DOES THAT WORK?

Through basic mobile application technology (we will refer to this as Swap
technology) interconnected with childcare specific enterprise management
software, parents will be able to on-sell their childcare spot for that day (or
consecutive days) to parents in need of childcare.
While all parents with children on waitlists fill in an application form for that
particular childcare centre, childcare centres participating with the Swap
technology prompt the parent to download the App and register their details.
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This registration process requires basic waitlist and demographic

information, as well as the following enrollment information:

Parents must fill in a generic childcare centre enrollment form

Parents must upload the latest copy of the childs Immunisation

Certificate

Parents must upload the childs Birth Certificate.

This is a one-off process and once it is in the system, it travels with the Parent
through every Swap transaction.
Centres also register for the software and are encouraged to participate in the
process by acknowledging that a child Swap transaction is taking place
this gives the centre the opportunity to not only be aware of who is attending
their centre on any given day, but to also prepare for any special needs and
allocate staff accordingly.
The Swap technology permits for transient bookings whereby when P2 is
required, for example, to travel interstate for work, she is able to adjust her
profile settings to indicate that she requires childcare in a specific location
over a specific date range.
The Swap technology uses sophisticated mapping technology to identify all
available childcare centres within a specified identified area.

CHILDCARE BENEFITS and REBATES

The financial transaction sits outside the traditional Childcare Management
Software (CCMS) requirements in the initial instance.
When P1 identifies he has a spare day at a childcare centre, and P2 identifies
that she would like to use it, P2 is prompted to participate in a financial
transaction that will see the cost of her day be allocated against her child.

This payment is made directly to the software platform, which immediately

on-sends the daily rate component of that financial transaction to the
childcare centre.
The childcare centre then processes this payment, as they would with any
other payment, through their CCMS. Once the payment has being processed,
normal Rebate, Benefit and/or Subsidy processes take place.
Adopting a simple system like this ensures that the ever changing, volatile
and complex Taxation Assistance, Rebates, Benefits and Subsidy
environment is avoided therefore protecting the software from any Policy
and Process driven changes brought down by Government and Industry.

THE PROCESS: STEP BY STEP

P1 advertises
his childs spot

The fee is always

calculated at 20%
above the Centre
Daily Rate

P2 indicates
she wishes to
buy the childs
spot
The Child Care
centre must
acknowledge
the transfer

The Director must agree to

the child transfer

The transfer of
$120.00 from
P2 Swap

$100 goes
back to the
Child care
Centre

The child care centre

receives the CDR for that
transfer they then
administer it the same as
any other payment re the
CCMS and CCB

$20.00 stays
with Swap
$10.00 P1
$5.00 Child Care
Centre
$5.00 Admin and
Misc

THATS COOL NOW WHATS THE

INCENTIVE?
All transactions that take place within the technology are based on supply
and demand in many places across Australia, demand far exceeds supply.
The Parent in need of childcare will pay approximately 20% above the centre
daily rate keeping in mind that she will still receive, in almost all cases, her
Rebates and Benefits (under the current Government model), giving her
approximately 50% back on the daily rate. She also now has the opportunity
to participate in the workforce and gain other non-tangible benefits
associated with childcare.
P2 is also incentivised through her ability to try before you buy. Through the
Swap technology, she is able to purchase attendance at any childcare centre
on her waitlist registration. This way, she is able to get a real understanding
of the specific childcare centres operations, community, practices and
processes, prior to taking a permanent position in any one of the centres.
Transient bookings, enable P2 to arrange childcare in additional locations in
advance, i.e. traveling interstate for meetings, she is able to identify in her
Swap technology settings that she requires childcare in a specific location
over a specific time.
The parent with the absent child, P1, is incentivised through an additional
payment that is made as a percentage of the initial P2 transaction.
The childcare centre is incentivised two fold: firstly through the automatic
management of the centres waitlists: matching waitlisted children against
available spaces identified through child absences, the centres are able to be
paid not only for the child who is absent, but also now for the child who will
fill that spot. The centre is also incentivised through an additional revenue
stream, as they also receive a percentage payment on every transaction.

Government is incentivised to support such technology because there is

significant return on investment into the economy through enabling an agile
workforce. The flow on from increased workforce participation is increased
GDP, decreased spend of welfare, decreased socio-economic related mental
illness and associated social effects and an increase in education and
developmental opportunities for children thereby investing in Australians
future.

WOW! OK GOT IT LETS SEE THE

NUMBERS
The Productivity Commission Report (2015) and IBIS World Report 2015
into childcare, provide the following insight into the size and opportunities
within the childcare market:

The Australian childcare industry will generate 10.6Bn in revenue and

is set to increase that to around 14.6Billion in 2020/2021.

There are approximately 1.5Million children in formal childcare in

Australia.

There are 16,000 formal childcare centres in Australia.

There are approximately 120,000 absences from childcare every day

(an average of 8%).

There are approximately 165,000 Parents (mostly mothers) who are

inhibited from participating in the workforce due to a lack of adequate
childcare access.

By enabling 165,000 Parents to further participate in the workforce, in

a year, equatea to an approximate $1.3Bn increase in GDP.

Supply for childcare is believed to be unmet by 600,000 places.

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The Swap technology therefore provides benefits to parents, the centres and
the Government/ economy with additional financial revenue streams, as well
as numerous social-economic and educational benefits.
The assumptions for the working model are as follows:

The average centre daily rate is $100.00 per child per day.

A childcare centre is open, on average, 250 days per year.

The CCR/CCB is set at 50% = $50.00 rebate.

P1 receives 10% of the financial transaction after the centre daily rate
has been attributed back to the centre.

The childcare centre will receive 5% of the financial transaction after

the centre daily rate has been attributed back to the centre.

The childcare centre will receive the daily rate of $100.00 each from P1
and P2.

The remaining 5% would be administration and miscellaneous fees to

any software provider.

CASE STUDY 1: CHILDCARE ACROSS THE BOARD

1.5M CHILDREN
Approximately 120,000 children are absent per day across the childcare sector in Australia (8%)
If only 10% (12,000) of these absences were addressed through the Swap technology, the
following revenues would be seen:

Childcare Centres: Approximately $60,000 additional revenue across the sector per day
(@ $5.00 per waitlist position filled)

Parents (P1): Approximately $120,000 additional income generated into the economy per
day (@$10.00 per absence on-sold)

$120,000 per day x 250 work days $30,000,000 per year

Administration/Miscellaneous: Approximately $60,000 per day (@ $5.00 per absence onsold)

$60,000 per day x 250 work days = $15,000.000 per year

$60,000 per day x 250 work days = $15,000,000 per year

P2 proportion of GDP generated through increased workforce participation

12,000 parents (P2)
$7878.00 per year per person proportion of GDP
$21.58 per day per person proportion of GDP
12,000 parents (P2) x $21.58 x 250 childcare open days = $64,740,000 increase in
GDP

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CASE STUDY 2: CHILDCARE - LONG DAY CARE ONLY

670,000 CHILDREN
Approximately 670,000 children enrolled in Long Day Care (Mar 15) = 54.6% of all those enrolled
in childcare.
53,600 children are absent per day across the Long Day Care in Australia (8%)
If only 10% (5360) of these absences were addressed through the Swap technology, the following
revenues would be seen:

Childcare Centres: Approximately $26,800 additional revenue across the sector per day (@
$5.00 per waitlist filled)
o $26,800 per day x 250 work days = $6,700,000 per year

Parents (P1): Approximately $57,600 additional income generated into the economy per
day (@$10.00 per absence on-sold)
o $57,600 per day x 250 work days $14,400,000 per year

Administration/Miscellaneous: Approximately $26,800 per day (@ $5.00 per absence onsold)

o $26,800 per day x 250 work days = $6,700.000 per year

$26,800 per day x 250 work days = $6,700.000 per yearP2 proportion of GDP generated
through increased workforce participation
5360 parents (P2)
$7878.00 per year per person proportion of GDP
$21.58 per day per person proportion of GDP
5360 parents (P2) x $21.58 x 250 childcare open days = $28,917,200 increase in GDP

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LETS SUM IT UP
The Swap technology solution enables the on-sell of unused childcare spaces
to those in need on waitlists, in an Uber-esque type transaction.
This capability increases childcare revenue, provides revenue back to the
parent of the absent child and enables an increase in workforce participation.
The Swap technology, conceived and developed here in Australia, brings the
concept of the sharing economy to childcare.
The Swap technology is free ensuring return on investment is all about wins
all round.

SHARYN FEWSTER
Founder and CEO
MiCare Global Pty Ltd
6/360 Queen Street Brisbane
QUEENSLAND 4001
+61 488 555 481

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