Call for cheaper childcare to help working mothers

TAXPAYERS should fund 95 per cent of the cost of childcare for low-income parents to boost the number of women in the workforce, early childhood groups say.

The Minderoo Foundation is calling for more assistance for parents to meet childcare costs.

Experts say the high cost of childcare — which reaches $120 a day in many Victorian centres before rebates — is the biggest issue stopping women doing more paid work.

Minderoo is one of many groups lobbying the federal government ahead of the May budget to push for cheaper childcare for families.

The foundation’s Thrive by Five campaign, led for former South Australian premier Jay Weatherill, wants the current 85 per cent subsidy for struggling families boosted to 95 per cent, the annual cap on hours removed and a simpler tapering off of payments.

Research from the Grattan Institute shows the move would cost $5bn but lead to a return of $11bn and $150,000 in higher lifetime earnings for the average Australian working mother.

Australia has the fourthhighest rate of part-time work rates across the OECD, with more mothers than working fathers dropping work hours due to childcare costs.

Under the current childcare funding system, families earning $68,163 or less receive a subsidy of 85 per cent of their child care fees.

For families earning $68,163 to $173,163, the subsidy gradually tapers down to 50 per cent.

In addition, families earning more than $188,000 have their childcare for each child capped at $10,000 per child per year.

The Thrive by Five campaign also wants a review of the early childhood learning system to make two years of high-quality preschool universally accessible.

Economists from KPMG estimate this could generate the equivalent of 30,000 to 40,000 full-time jobs and lead to a 13 per cent increase in hours worked by second-income earners.