The Australian Chamber of Commerce and Industry (ACCI) has lodged a submission to the Productivity Commission inquiry into the childcare sector, arguing for a HECS-style loan scheme for childcare, as well as allowing nannies to enter Australia under three-year visas. From The Australian:
“The Productivity Commission should examine the feasibility of introducing childcare loans which could be made available to parents and modelled along the HECS loans for higher education,” its submission says.
“Access to these loans… should change the financial case for women weighing up their options to work full-time, part time or at all. For many women, the opportunity to work longer hours, or stay in their current career path will reap medium to long-term benefits in terms of higher salary and promotional opportunities.”
The chamber says HECS-style loans would enable the cost of childcare in peak years to be spread over a longer period.
It calls for a new regime for the use of foreign workers as nannies… ACCI says there should be a specialist visa for au pairs that permits work in Australia for up to three years but does not lead to permanent residency.
For many mothers, having children is detrimental to their careers – either because the cost of childcare makes working unattractive, or because they can only work part-time. To the extent that these reforms improve mother’s career prospects, and provide greater choice, they should be viewed as favourable. Further, as noted by the ACCI, childcare costs are typically concentrated over a handful of years, so to the extent that HECS-style loans can spread the burden, all the better.
That said, the rising indebtedness of households is a concern. Many of today’s households are required to take on significant debt to fund their tertiary education before taking on jumbo-sized mortgages for housing. Taking on additional debt for childcare could potentially add to this burden.
The ACCI’s proposals also do not address another key cause of “childcare stress” for many households: expensive housing. Arguably, many Australian families would prefer not to have both mum and dad in work. But because they require the extra income to make ends meet and pay-off their jumbo-sized mortgages, they do not have a choice. Certainly, I know of a few families in my age group in this position because they cannot afford to live on just one wage.
In this regard, expensive housing is just as bigger barrier to having children as expensive childcare, which highlights why policy should focus on both areas.
