This article is from the Australian Property Journal archive
WORKFORCE participation will be given a boost through the federal government’s 2021-2022 budget, with a further $1.7 billion investment in childcare.
The investment into childcare will make up the lion share of the Morrison government’s $1.9 billion Women’s Economic Security Package.
The $1.7 billion over five years will support an increased Child Care Subsidy, specifically targeting those families with second and more children aged five years and under, by increasing the rate for said additional children.
“Childcare is an important driver of higher workforce participation and women’s economic security. In this Budget, we are making a further and targeted $1.7 billion investment in childcare,” said Treasurer Josh Frydenberg said during the budget speech.
Though women’s workforce participation is almost at pre-pandemic levels, economic hurdles and insecurity for women mean that participation is well below that of men.
Women have also been more negatively affected by the shift towards working from home, with lower reported rates of access to networking and career development than their male counterparts.
“This will increase the affordability of childcare for low‑ and middle‑income families. 250,000 families will be better off by an average of $2,200 each year. Giving more parents, especially women, the choice to take on extra work,” added Frydenberg.
The investment has the end goal of enabling the secondary earner, who is often a woman, to work, train, study or volunteer, and counter the high financial disincentives to take on further work.
Australia’s workforce will also need to be supported due to a forecasted loss of around 1.1 million people in the Australian population, due largely to a stagnation of new migrants in the country due to COVID-19.
It is estimated that 250,000 families will benefit from an additional $2,200 each year, increasing affordability for low- and middle-income households.
Changes to the Child Care Subsidy, which will provide $9.7 billion in 2021-2022 to reduce out-of-pocket costs for families, which is expected to increase payments by $1.8 billion over the next five years. Changes will also include the removal of the annual cap.
Removing this cap is estimated to add as much as 300,000 hours of work per week, the equivalent of around 40,000 people working a full extra day a week.
The Consumer Price Index (CPI) in June of 2020 fell by the largest quarterly margin in the history of the series, declining by 1.9%.
Frydenberg’s budget attributes this largely to the necessary introduction of free childcare during the pandemic. With the waiving of preschool fees, coinciding with the fall in fuel prices and contracting oil prices.
With the reinstatement of childcare fees and other mitigating factors, CPI had a strong recovery in the second half of the year, increasing by 2.4% in the six months to December.
With the budget finding free childcare untenable, it instead is aiming to provide affordable care for over one million families.
