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Last week, the Morrison Government flagged that next week’s federal budget would boost childcare funding by $1.7 billion over three years, representing a 6% lift on current expenditure levels.
The policy will have two main components:
- Dropping the annual cap of $10,560 per child for families earning over $189,390, which is perceived as a major disincentive for women with high earning partners; and
- Boosting the subsidy for second and subsequent children in care by up to 30% (capped at 95%) for children aged under 6, in a bid to lower costs for families with multiple children.
The Grattan Institute has released a useful explainer estimating the impact of the changes:
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About the author
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.