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11 August 2020

Working women, affordable childcare key to economic recovery: report

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell says a new report by the Grattan Institute makes a clear economic case for affordable childcare.

Cheaper childcare: a practical plan to boost female workforce participation” estimates an overhaul of the childcare subsidy system would add $11 billion to GDP per year and increase hours works by 13%.

In the report, the Grattan Institute recommends the Federal Government invest an extra $5 billion per year on childcare subsidies.

Ms Carnell says affordable childcare is critical to ensuring women can work, including women in small businesses.

“38% of small businesses are owned and operated by women and that number has been growing,” Ms Carnell says.

“Many of these women are mothers who rely on childcare as they work to get their businesses back up-and-running again.

“For those surviving on JobKeeper, childcare fees are unaffordable. That means one parent – mothers more often than not – need to spend more time at home. It’s bad for business and even worse for the economy.”

The report refers to the ‘workforce disincentive rate’ which leads many mothers to work three or four day weeks, because working full-time would offer virtually no take-home pay.

“Now is the time for the government to be implementing innovative ways to increase the female participation rate,” Ms Carnell says.

“The report shows that under the current system, a family with two kids in childcare on $60k FTE - the primary carer gets $2 per hour for day four and nothing for day five.

“There’s no doubt that affordable childcare would allow more women to work on growing their businesses, which would deliver productivity gains.

“While the Grattan Institute recommends an expanded subsidy scheme, the government could also make childcare more tax-effective.

“After all, getting people back into jobs is key to Australia’s economic recovery.”