Child’s pay for parents

Cheaper care and boosting women’s workforce

FAMILIES have been made a priority in Labor’s first budget, with cheaper childcare and a push to get women back into the workforce.

Labor’s $4.6bn package promises to cut childcare fees for 96 per cent of families by lifting the maximum childcare subsidy rate by up to 90 per cent for families for their first child in care.

And parents with a combined household income of less than $530,000 will also get more money back in subsidies.

A family with a combined annual income of about $120,000 with one child in care will save an estimated $1780 a year. “Cheaper childcare is a game-changing investment in families, our workforce, and our economy,” Treasurer Jim Chalmers said.

“It will increase the paid hours worked by women with young children by up to 1.4 million hours a week in the first year alone. That’s the equivalent of 37,000 extra fulltime workers.

“Because our early childhood educators guide our young ones and help them grow in those critical early years, for the best possible start in life – it’s more than care. It is cost-of-living relief with an economic dividend,” Dr Chalmers said.

Funding of $531.6m has also been set aside to pay for an extension in paid parental leave from 18 to 26 weeks, increasing by a fortnight each year until the full 26 weeks is available from mid-2026.

The parental leave can be shared between both parents, allowing for flexibility and choice, but it includes a “use it or lose it” component to encourage both parents to share child caring responsibilities.

Labor says the policy will help close the gender gap, by increasing the workforce participation of 100,000 women.

While family and childcare advocates have welcomed the “family-friendly budget”, there are also some reservations as to how effective it will be.

For a decade the Morrison government had increased subsidies, which were generally followed by a surge in childcare fees. Labor is hoping a $10.8m, 12-month inquiry into the rising cost of childcare fees will provide some answers.

Fees have already jumped on average by 6 per cent this year, hitting $200 a day for the first time at some childcare centres.

Benjamin Balk, founder of childcare app Kindicare, said he would like the Australian Competition and Consumer Commission (ACCC) investigation to be fast-tracked.

“Given the vast majority of the operating costs for early learning providers is staff and rent, it shouldn’t take an ACCC inquiry a year to uncover what’s driving fee increases and make recommendations to the government on what regulatory measures or initiatives might be introduced to contain fee growth,” Mr Balk said.

Mr Balk said irrespective of the increase in subsidies, the new reforms, which aim to encourage more women back into the workforce, will not work without thousands more early childhood educators.