New childcare subsidy a step in right direction

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:

  1. 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
  2. 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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