Push to make childcare costs tax deductible

CHILDCARE costs are driving Australian families to breaking point with an exclusive survey for News Corp Australia finding close to 40% are paying more than or equal to their mortgage in out-of-pocket payments each week.

Close to a third are paying double their grocery bills on child care – after the government rebate – and one in five are paying triple their weekly grocery shop.

Alarmingly, 34% of respondents in the survey conducted for News Corp Australia by The Parenthood said they had been late paying their bills, mortgage or rent because of childcare.

A total of 21% of respondents said they were basically working to pay for childcare, with 57% only marginally better off working.

Despite the legislated changes to childcare to come into force in July 2018, many hard-working families said childcare costs would still cripple their weekly budget and the system needed further reform.

Close to half of Australian families surveyed were being charged $101-$125 a day for childcare with one in five paying up to $200 a day.

Two thirds believed the cost of childcare was holding them back in their careers and some families were even putting off having more children because they could not afford huge childcare fees.

Some were racking up enormous debts on their credit cards just to keep up with childcare costs.

OECD figures show that Australia’s maternal employment rate had remained stuck at around 64% since 2008, well below many comparable countries.

In the past 15 years, the cost of childcare had increased much more rapidly than inflation or wage growth.

According to the Australian Bureau of Statistics, from March 2002 to March 2017 wages grew by 63.3%, while childcare costs increased by 95.4%.

Nicole Lessio, acting executive director of The Parenthood, said childcare costs were pushing parents to “breaking point”.

“We should be investigating all options to make it more affordable including enabling fees to be salary sacrificed or used as tax deductions,” Ms Lessio said.

John Cherry, from Goodstart Early Learning — Australia’s largest childcare provider — said childcare was so expensive because of under-investment by the government.

“We think early learning was the missing chapter of Gonski,” Mr Cherry said.

“The 22% of children who don’t get good access to early learning because of cost restrictions are the same 22% that start behind in their schooling, that get lower NAPLAN scores, that struggle in high school and that don’t get a job later on in life. It’s that serious.”

❝We should investigate all options to make it more affordable including tax deductions