A fully-funded Childcare subsidy has many benefits

Sue Morphett, president of Chief Executive Women, recently stated that ‘increasing women’s workforce participation by making childcare more affordable is one of Australia’s biggest economic opportunities.’

That is a big call to make, but it is backed up by some strong statistical evidence that this move from the federal government to subsidise a nearly fully-funded childcare sector would boost GDP by up to $7.4 billion a year. KPMG‘s report has also established that over a 20 year period a nearly fully-funded model of childcare could increase GDP by up to $10 billion through the cumulative benefit of parents’ increased productivity.

These figures are staggering in the light of the loss of productivity due to the loss of jobs through COVID-19, which has hit the childcare sector so significantly with the shutting down of centres during the pandemic. Few workers were exempt from its strict government rules around access to those services.

Women had to step back from jobs due to home schooling their children, and their part-time or casual work was no longer available due to COVID-19. The cost of taking on extra work also became problematic. Once childcare out-of-pocket expenses were deducted households were insufficiently rewarded.

A move to support a boost in childcare funding has highlighted a major step towards gender equality. This would allow more women to return to the workforce. There would be more discretionary spending in families, and a stimulation to the economy – particularly in the hospitality, retail, entertainment, and tourism sectors – which have been hardest hit by this recession. COVID-19 has had a particularly adverse effect on women and young people.

The KPMG report also identifies that revising the proposed childcare upwards would impact on employment numbers by creating 160,000 to 210,000 additional working days per week as women joined the workforce again. This equates to 30,000 to 40,000 full-time jobs.

Ref: Womens’ Agenda

This article has been prepared for information purposes only and is not legal advice. For legal advice regarding your specific circumstances, please contact WR Law directly on (03) 5499 6131 or by email at admin@wrlaw.com.au