Universal childcare – The costs and challenges

Universal childcare –
The costs and challenges

The Australian Council of Trade Unions, led by ACTU president Michelle O’Neil, has announced they will be pushing for universal free childcare as one of five BIG IDEAS in a COVID-19 led recovery plan unveiled on July 20th.

This call comes with a price tag of $7 billion extra a year. O’Neil also called for the wages of childcare workers to be subsidised as labour accounts for the major cost of the providers of childcare.

The ACTU president has said there is strong evidence that costs of childcare force many women to remain at home rather than re- enter the workforce. This may be detrimental to the development of young children who miss out on an early childhood education and care, arguing that those early years are when brain development is at its peak.

The concern is raised that taxpayers would be the providers of this extra funding if free childcare was introduced. There is also an argument that not all parents should receive free childcare, as clearly the biggest beneficiaries of this scheme would be high-income families who receive less generous support under the current means-tested subsidy model.

There is also a question over the number of places available if more families were to accept the offer of free childcare. The system would struggle to provide places for all children. More centres would be required, and many more adequately trained staff and services would be needed. According to the Grattan Institute free childcare would add up to $14 billion on top of the current $8 billion it is already costing the government.

Counter- balancing this argument the Grattan Institute’s modelling was able to show that an additional $27 billion would flow into Australia’s economy due to the increased workforce as women could return to work much earlier.

If we consider the numbers presented by the Grattan Institute, there are positive benefits in offering free childcare. This also recognises the importance for women in returning to work earlier than would otherwise be the case.

This has immeasurable advantages to women and employers.

Ref: The Age 20/7/2020

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) 54996131 or by email at admin@wrlaw.com.au

– Annie Young