Wednesday, 21 October 2020
New research by the Grattan Institute shows the significant financial barriers many Australian parents currently face to work full time.
Under Scott Morrison’s child care system, a family with two children in child care and a primary earner earning $100,000, the gain to the disposable income for the secondary earner to work a fourth day in the week is zero.
Under Labor’s child care plan, the same family will be better off by up to $2,100 per annum if the second income earner works a fourth day.
| Current child care system | ||||||||
| FTE salary Primary earner / secondary earner |
Disposable income net of childcare cost Secondary earner works: |
Return from 4th day | Return from 5th day | |||||
| 3 days | 4 days | 5 days | $ | % | $ | % | ||
| $60k/$40k | 74,377 | 74,342 | 74,586 | -35 | 0% | 243 | 3% | |
| $80k/$40k | 80,588 | 78,990 | 79,002 | -1,598 | -20% | 12 | 0% | |
| $100k/$40k | 87,080 | 87,120 | 87,539 | 39 | 0% | 419 | 5% | |
| $180k/$40k | 128,503 | 126,460 | 121,115 | -2,043 | -26% | -5,345 | -67% | |
| $100k/$70k | 97,651 | 100,394 | 101,669 | 2,743 | 20% | 1,275 | 9% | |
| $100k/$100k | 107,562 | 113,336 | 111,978 | 5,774 | 29% | -1,358 | -7% | |
| $180k/$180k | 179,598 | 188,452 | 187,005 | 8,853 | 25% | -1,447 | -4% | |
| Labor’s Working Family Child Care Boost | ||||||||
| FTE salary Primary earner / secondary earner |
Disposable income net of childcare cost Secondary earner works: |
Return from 4th day | Return from 5th day | |||||
| 3 days | 4 days | 5 days | $ | % | $ | % | ||
| $60k/$40k | 77,309 | 78,739 | 80,691 | 1,430 | 18% | 1,953 | 24% | |
| $80k/$40k | 84,435 | 84,607 | 86,634 | 172 | 2% | 2,026 | 25% | |
| $100k/$40k | 91,842 | 93,957 | 96,696 | 2,115 | 26% | 2,739 | 34% | |
| $180k/$40k | 133,398 | 134,388 | 135,296 | 990 | 12% | 908 | 11% | |
| $100k/$70k | 103,236 | 108,695 | 113,114 | 5,459 | 39% | 4,418 | 32% | |
| $100k/$100k | 113,971 | 122,059 | 128,448 | 8,088 | 40% | 6,389 | 32% | |
| $180k/$180k | 182,794 | 194,909 | 205,917 | 12,115 | 34% | 11,008 | 31% | |
Notes: Primary earner works full-time. Two children, both require childcare. Every day of work for the second earner results in exactly one day of approved child care.
Source: Grattan Institute
This analysis confirms Labor’s child care plan will reward working families, and allow more second income earners, usually women, to work more and contribute to our economic recovery.
An Albanese Labor Government will introduce the Working Family Childcare Boost, which will:
Importantly, Labor will keep working to fix Australia’s broken child care system, which currently locks out more than 100,000 families because they just can’t afford it.
The Productivity Commission will conduct a comprehensive review of the sector with the aim of implementing a universal 90 per cent subsidy for all families. The ACCC will also design a price regulation mechanism to shed light on costs and fees and drive them down for good.
The evidence is overwhelming that removing the financial disincentives for women to work more is great for families and great for the economy.
That is why Labor has a plan to fix it.
