FiveAA Breakfast – increasing out of pocket child care costs

Monday, 11 January 2021

HOST: Amanda Rishworth is the Shadow Minister for Early Childhood and joins us now, Amanda welcome to the show.


HOST: Tell us about the rises in child care fees, and you’re about to talk about how the rebate is pegged to inflation, but the rises are looking to outstrip that.

RISHWORTH: Yes we’ve had some information that the government has predicted that on average over the next four years child care costs are going to go up more than four per cent. Of course inflation is not predicted to be anywhere near that. We already know families are struggling with out of pockets costs, and so what this information shows is it is only going to get worse. In some cases the rise is double what inflation is predicted to be or even close to three times as much. Why this matters though, we know that families need to get back to work especially after the terrible year we’ve had in 2020. They want to get back to work, but child care costs might simply be a barrier for many of these families being able to work.

HOST: Amanda I’ve seen in the release you’ve put out that child care fees have gone up almost 36 per cent since 2013, which is just staggering.

RISHWORTH: The cost is huge and for many families they look at this cost, and I know many families sit around and work out how much they can actually afford, and for some they say we’re not going to actually use child care, others say well we can only use a certain number of days. And that’s not great if families do want to use more, and also enjoy the benefits of early education as well. We know that children’s brains are developing at a very fast rate for the first five years, and so early education for some families is an opportunity they want to give their children. So it is a really big issue that we just need to bite the bullet and address.

HOST: So what’s your plan from the Labor side of things?

RISHWORTH: We’ve announced a plan that if we are elected we would want to immediately increase the subsidy to 90 per cent at the highest level, and get rid of the annual cap, that would help a whole lot of families. In the long term what we want to do is see an opportunity to increase the subsidy to 90 per cent for all, kind of getting a bit more towards school with everyone being able to access a very highly subsidised service.

HOST: I can see some people would look at that and say you can effectively earn up to half a million dollars and get a 90 per cent rebate, surely we are trying to protect the people that are much lower down the food chain than people earning hundreds of thousands of dollars?

RISHWORTH: I think the important thing is there are some basic things we say are essential, like school. We don’t means test schools and access to public education. We don’t means test when you turn up to a public hospital and say this is how much you’re going to get, and we don’t means test Medicare. So we want to look at child care like an essential service, and that’s the first point I’ll make. But the second point is this is actually good for the economy. If we look at what helps our economy grow, and we look at participation, which is one of the key ingredients, productivity and population, child care actually helps all three of those. Studies have shown it could actually add up to $11 billion to our GDP. And a lot of small businesses talk about this with me as well, it’s not just families, because they might have a really good employee, but because that employee cannot afford child care they can’t get them to work the days and hours they want. So this is actually good for our economy and leads to economic growth, and pays for itself.

HOST: Amanda what does it cost at the moment for a family to put a child through child care?

RISHWORTH: Well the benchmark price is set at $120 a day, so that’s what the government assumes people have to pay, some people pay more and some people pay less. And then the subsidy families get back is on a sliding scale. So it is very complex, it’s hard to explain to people who don’t have kids, but for anyone who has kids they know it down to the dollar. Most families get a 50 per cent rebate so that means they are paying approximately $60 a day in child care. But there’s also an annual cap, so when you reach the annual cap you’ve got to pay the full amount, and that’s the real deterrent for the second income earner actually going back full time. So there’s a lot of things you have to calculate when you’re trying to work out if it’s worth going back to work.

HOST: Alright Amanda Rishworth, Shadow Minister for Early Childhood thank you for your time.

RISHWORTH: Thank you.


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