Politics

Why your business should care about childcare reform this election

Max Stainkamph /

Both major parties are carrying major $3 billion dollar childcare policies into the election, and businesses could be the benefactors as more women may be able to get into work.

Bringing more women into the workforce could leave Australian Gross Domestic Product $25 billion dollars better off if the female workforce participation rate matched that of Canada’s, which is 6% higher, the Grattan Institute found in 2012.

Childcare affordability has a “significant” impact on female workforce participation, according to the last report into childcare by AMP and the centre for National Social and Economic Modelling (NATSEM) in 2014, called Child Care in Australia.

The report found the female workplace participation rate is 59%, up 15% over the last three-and-a-half decades, while male participation is at 72%, down from 79% over the same period.

“Increasing female workforce participation is dependant on the affordability of child care,” the report found.

“Currently, as women increase their working hours, they lose their childcare benefits and pay more income tax,” it said.

It’s been widely reported businesses with women on their boards and involved in making decisions can perform up to 15% better than male-dominated companies.

Experts say having mothers more available to work can do wonders for small businesses, not just larger firms.

Anne Daly, Emeritus Professor of Economics at the University of Canberra, says mothers often fit the needs of smaller businesses.

“The benefit to small business is that many small businesses often want part time, workers and more childcare allows small businesses to hire an accountant that comes in twice a week to do the books, not bring on someone full time,” she told SmartCompany.

Eva Cox, who is a long-time social policy advisor and an adjunct professor at the University of Technology in Sydney, agrees.

“With more women in the workforce, small businesses have access to more workers, and more highly educated workers,” she says.

Cox has long been involved in the childcare and early education, having helped design Australia’s first childcare policy in the Hawke era.

“If you want women to stay in the workforce you need to make sure it’s available and affordable,” she says.

So what’s being done about it at this election? 

Malcolm Turnbull announced the Liberal Party’s childcare policy in June, which simplifies the current two-payment subsidy into one means tested payment and was budgeted for in May.

Like the current Child Care Benefit payment, Turnbull’s policy will scale to income. The Coalition’s proposed plan starts at 85% for low income families, but will cut down to 20% for the highest income earners if the Coalition form government.

The government has said this policy will leave most families 15% better off, but makes it much more difficult to get payments if not working.

However, the policy isn’t budgeted to start until the 2018-19 financial year.

In response to this, Bill Shorten announced he would shift the Coalition’s proposed spending to begin next year, as well as providing a 15% increase to the Child Care rebate, which will add about $31 a week, and lift the cap to $10,000.

He also announced new transparency standards to try and stop prices from increasing and $150 million dollars worth of investment into “developing the early education workforce”.

Furor has erupted over exactly how better off families would be under either party’s plan, as the government’s claims Labor’s own modeling would leave families worse off Labor policy compared to Turnbull’s were brushed off by the opposition.

Cox says the Liberal proposal will be problematic for those who stop work for 12 months or more after their child is born.

“A lot of women don’t get a job until after they find childcare, because you want to make sure your kids are being taken care of before you can leave them at home and go to work,” she says.

Labor will provide up to 24 hours of support without a means test, but will not cap or scale the wage bonus, which means the very wealthy are also able to access childcare support.

However, Cox says neither party are looking towards a long-term solution for price rises in the market-based childcare system.

“Costs will continue to go up,” she says. “Neither party are raising supply and they have no way to increase supply when its needed or reduce excessive supply.”

While many parents are able to find informal options for kids such as asking grandparents to help, especially if working part time, the problem is one that won’t go away.

“You do actually need someone to mind kids,” Cox says. “If you don’t, people can’t work.”

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