Child's play

Australia’s childcare system needs help and Labor has no plan whatsoever for making it work. By Amanda Stoker.

A key outcome of the jobs summit was to “develop, through National Cabinet, a long-term vision for early childhood education and care reform” and implement a “whole of government approach to improve early childhood development and education”.

That a summit was needed to decide to develop a vision is so very “Sir Humphrey” that it demonstrates Labor has no plan whatsoever for making Australia’s childcare system work.

Successive governments have poured money into this broken system. It’s time to, in the interests of families, women, children, taxpayers and childcare workers, reform this sector.

Australia already spends at least $8.6 billion a year on childcare subsidies. On Labor’s own data it plans to spend an extra $5.4 billion of what will surely be borrowed money.

No true Labor believer would increase childcare subsidies for families with household incomes over half a million dollars – yet, that is precisely what this government’s policy does.

It is a claim often repeated that more women would work if childcare was cheaper and more easily available. Logic suggests this is true to a point.

But the Productivity Commission’s research says that while higher spending on childcare will increase female workforce participation, that increase “will be small”. That is because, as common sense would suggest, a host of work, family and financial factors influence parents’ decisions about what’s best for them and their children.

Notably, neither Labor nor any of the supporters of its higher childcare subsidy are saying this policy will “pay for itself” out of the taxes paid by more working women.

Every new injection of government funding in the sector has been followed by an escalation in the cost of childcare. The cost of childcare has consistently risen at a rate exceeding inflation, despite ever-increasing subsidies.

If Labor genuinely wanted to assist women to participate to their potential in the economy, families wouldn’t be shoe-horned into centre-based childcare that reflects traditional working hours and a commuter life that the vast majority of working women find inflexible, stressful and guilt-ridden.

It is not a system that listens to women’s aspirations for their lives and careers. Some women will be focused on accomplishment at work. But we should not forget that there are many women who seek to stay at home and raise children.

Many women will choose a blend of those two options, with part-time work to keep their mind and skills fresh while spending more time at home.

All are valid and worthy choices – yet taxpayer support does not even-handedly reflect the public and private benefits of each.

Support for women’s choice must include the choice to care for one’s own children if that choice is to be meaningful. That would mean allowing families to opt in to taxation as a family unit rather than as individuals.

For two-parent working families, shifting to a system of tax deductibility of childcare would more efficiently release the economic potential of educated and well-off women because the taxpayer contribution to the cost of care is more meaningfully linked to the earning of income, without undue administrative burden. While subsidies make economic sense for those on low incomes, they are otherwise hopelessly inefficient.

Tax-deductibility of home-based care such as nannies would better enable the economic contribution of shift-workers and those who work long or odd hours. Ask a junior lawyer or accountant if they work hours that match those of the local day care centre and they’ll laugh in your face.

The current system requires a person who seeks to use a childcare subsidy for a nanny to jump through so many hoops that very few succeed in doing so.

Tax-deductibility has another advantage: at present, nannies largely operate in the black economy. Tax-deductibility of their services would bring nannies into the documented economy, with benefits for tax revenue and for the ability of workers in this space to access the superannuation, housing and finance that comes from being “on the books”.

Providing more choice in childcare – including the tax deductibility of nannies and better recognition of those men and women who make sacrifices to stay at home – allows families to mix and match their need for early education, their need for work-enabling care, and their desire to be participants in the childhood phase according to their own circumstances and beliefs.

Women have been told for so long that they can have it all. If we were more honest, we’d tell our girls that they can have lots of things, but perhaps not all at once – and that it is okay to focus on different things in different seasons.

If governments were serious about empowering women to achieve their goals, they would provide choice and flexibility for parents about the way they go about balancing work and family responsibilities.

Labor seems more interested in funnelling children at an ever-younger age into the union-influenced, centre-based care model than it is in genuinely making life and work more readily balanced by families.

Australian women – and their families – deserve better.

This article first appeared in The Australian Financial Review.