The Australia Institute (TAI) has released a new report, entitled A comparison of the economic impacts of income tax cuts and childcare spending, which claims that boosting childcare funding would be nearly 20 times more effective at creating jobs than a tax cut of the same size:
Almost 450,000 Australians with children under the age of 5 would like to work more hours.
If these parents were able to work an extra 10 hours a week, the number of hours supplied to the labour market would increase by one per cent. By 2030, GDP would be 0.8 per cent higher than it otherwise would have been. In 2019 prices, this is equivalent to an increase in GDP per person of $590 per year, or almost $15 billion for the economy as a whole.
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
