ABC News Breakfast – Labor’s Working Family Child Care Boost

Friday, 09 October 2020

MICHAEL ROWLAND, HOST: As we have been reporting, Labor leader Anthony Albanese used his Budget Reply speech to outline a massive child care shakeup in a bid to get more mothers back to work. Joining us to explain more is the Shadow Minister for Early Childhood Education, Amanda Rishworth. Good morning to you.


ROWLAND: Now, the Opposition Leader has focused, in particular, on a promise to scrap the $10,000 Child Care Subsidy cap and lifting the maximum subsidy to 90 per cent. Why the focus on those two particular issues?

RISHWORH: Those two issues are the two parts of the system which act as a significant disincentive for the second wage earner, usually the mum, to go back to work after they have a child or if they have got a couple of children. So, if you look at what is commonly known as the workforce disincentive, what it shows is for a variety of income levels, that to go back to work on the fourth or the fifth day will actually cost those mums and dads money. They have to effectively lose money by going back to work on the fourth and the fifth day. It is a real disincentive for parents that may want to go back to full-time work, but it just isn’t worth it.

What economists have been saying is if we can lift our female workforce participation, it actually grows our economy. It is good for mums and dads who might want to accrue more super, might want to continue their career progression. But if we don’t remove this disincentive it isn’t going to be a possibility for many.

ROWLAND: The plan is a Labor Government offering universal 90 per cent subsidy for child care?

RISHWORTH: The first three years we’re offering a working families boost, which removes the cap, it improves the subsidy levels, with the idea that the Productivity Commission moves towards a universal 90 per cent subsidy. So, we need to work out how we implement that. Obviously there will be demand on more child care places, and a bigger workforce. So we want the Productivity Commission to do that work. But in the meantime, we recognise that we need to remove this disincentive right now if we’re elected, so that is what our plan is to do.

ROWLAND: The government has shot back, saying well they provided free child care during the height of the pandemic and also point out that $9 billion is spent. Not an insignificant sum on providing child care subsidies at the moment.

RISHWORTH: Well firstly yes they did provide free child care, but that ended after three months. I think a lot of parents who continued to work through the pandemic felt that cost of living relief. They understood that there was the potential to do more hours when that was available. But of course in July the old system came back, which was the wrong time because we are in the middle of a recession. The old system, which has some of the highest fees in the OECD. So, we need to address this issue.

This issue is really good for family’s pay packets and it’s also really, really important for economic growth. If we lift women’s workforce participation, the most conservative models have suggested is we will actually grow our GDP. But the current model won’t allow us to do that. The $9 billion that the government spends still has within its structure these perverse outcomes, that mean with the interaction of the tax system and the child care subsidy, that for a lot of mums going back on the fourth and fifth day actually costs them money.

ROWLAND: Amanda Rishworth, thank you.


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