Fairfax ran a detailed article over the weekend lamenting the high cost of childcare, which is becoming a growing burden for both the federal government and Australian families:
…every day… the need for parents to find and turn up to work collides with the reality of the Australian childcare sector’s costs and limitations…
According to think tank The Australia Institute, the number of households reporting difficulties with the cost of childcare for a child under five stands at more than three out of 10. Then there is the problem of what it dubs the ”uneven availability of childcare places”, that sees acute shortages in some areas even as official data reports a healthy number of vacancies nationwide…
…there is evidence that households and the government are struggling to cope with the rising cost…
The limits of current government subsidies force working mums into three-day work weeks because this is where the childcare rebate – which has been frozen since 2011 – tends to run out. The freeze on subsidies means the gap between the government rebate and child care costs is increasing every year.
This means a couple earning $70,000 each with two children in childcare stand to take home just 20¢ for every dollar earned on the second wage if that partner works more than two days a week…
Late last year, the Productivity Commission released new research on childcare in Australia, which it estimated costs families on average around 9% of their disposable income, despite $5.2 billion of annual subsidies from the federal government. It also noted that childcare subsidies have grown from $1.5 billion a year in the early 2000s to an estimated $5.2 billion this financial year, with fees rising by around 7% annually in the decade to 2011-12.
Certainly, 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 reforms to childcare arrangements can ease this burden, provide mothers with greater choice, and boost workforce participation, then they should be viewed as positive.
That said, while some mothers wish to return to full-time work, but cannot do so due to exorbitant childcare costs, many other families would prefer not to have both mum and dad working. However, because it is next to impossible to raise a family on a single income these days, in no small part due to the inflated cost of housing in Australia, they are forced to return to work earlier than they’d like, reluctantly sending their children to Childcare. For this group, “childcare stress” is more a symptom of an increased cost of living from housing. Certainly, I know of some families in my age group (mid-30s) in this position because they cannot afford to live on just one wage.
In this regard, expensive housing is a bigger barrier for many families than expensive childcare. It is also a reason why I continue to advocate for freeing-up the supply-side, as well as winding back tax breaks like negative gearing. It would be a lot easier for Australian families if they weren’t burdened paying-off some of the world’s biggest mortgages or paying high rents.
