Invest
Treasury announces childcare boost ahead of budget
The Morrison government has unveiled another key piece of budget legislation, with the opposition labelling it a ‘missed opportunity’ for working mothers.
Treasury announces childcare boost ahead of budget
The Morrison government has unveiled another key piece of budget legislation, with the opposition labelling it a ‘missed opportunity’ for working mothers.
The Treasurer has announced a $1.7 billion investment into childcare services in a move set to benefit over 400,000 Aussie families.
According to a joint statement by the Minister for Women Marise Payne, the Minister for Youth and Education Alan Tudge and the Minister for Superannuation Jane Hume, the government will target low and middle-income families trying to get them to work an additional day.
“The investment will add up to 300,000 hours of work per week, which would allow the equivalent of around 40,000 individuals to work an extra day per week and boost the level of GDP by up to $1.5 billion per year,” the statement said.
Treasurer Josh Frydenberg wrote in an opinion piece that the gender pay gap is falling, but admitted that additional work needed to be done.
“The government’s focus remains on supporting low and middle-income families, with the tapering rate applying between incomes of $69,390 and $353,680. This targeted and proportionate investment is designed to give parents who choose to work more hours or more days the opportunity to do so,” he said.
As part of the 2021-2022 budget, the current $10,560 cap on the childcare subsidy will be removed.
Second, families with two or more children aged 5 and under will receive a 30 per cent increase in the subsidy for their second and subsequent children up to a maximum of 95 per cent of fees paid.
Mr Frydenberg said the investment builds on the $10.3 billion the government is already investing in childcare this year.
“These changes strengthen our economy and at the same time provide greater choice to parents who want to work an extra day or two a week.”
“This is a targeted and proportionate investment that simultaneously makes childcare more affordable, increases workforce participation, and boosts the Australian economy by up to $1.5 billion per year.”
Treasury said the changes will come into effect from 1 July 2022.
‘Disappointing, missed opportunity’
The Opposition pointed out that the Morrison government’s announcement is a cheaper version of a policy they announced late last year.
That policy would similarly scrap the childcare subsidy cap, but would go further in boosting subsidy rates, offering subsidies for families earning up to $530,000.
The government’s childcare proposal will only lift the childcare subsidy rate for families who have a second or subsequent child under five years old in the system.
“Disappointingly, the Treasurer has yet again missed an opportunity to fundamentally and permanently reform childcare, provide a significant boost to women’s workforce participation, and a boost to the economy,” Opposition Leader Anthony Albanese said.
Mr Albanese said that as the government will only increase subsidies for a second or subsequent child in the system, the announcement will make an already complicated system more complicated, and will cause confusion for families as to whether this reform will leave them any better off.
He pointed out that in comparison, Labor’s Cheaper Child Care Plan lifts the subsidy and smooths the taper rate across the board, regardless of how many children the family has or how old they are – leaving 97 per cent of families – or more than 1 million families – better off. By assisting 1 million families instead of 250,000, Labor’s childcare plan would provide a bigger boost to the economy.
“In addition, the many Australian families struggling under the cost of out-of-school hours and vacation care will not benefit at all from the Morrison government’s lift in subsidy,” Mr Albanese said.
“Families desperately need immediate relief from soaring childcare costs, yet these changes are not even set to come in for over a year.”
About the author
About the author
Economy
CPI data another piece in RBA's interest rate decision puzzle, says REIA
The latest Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) shows that inflation rose 3.4% in the 12 months to February 2024, unchanged from the previous two months, ...Read more
Economy
Including passive job seekers in unemployment measure doesn't impact economic cycle view, study finds
New research from e61 Institute has found that while current unemployment measures may not capture all job seekers, broader definitions that include passive job searchers do not provide better ...Read more
Economy
Survey reveals heightened job security concerns among IT workers in 2024
A recent survey conducted by Authority Hacker has revealed that 89.66% of IT workers in the United States have increased concerns about job loss in 2024. Read more
Economy
Australian founders adapt to the challenging fundraising environment with optimism and strategic shifts
The landscape for start-up funding in Australia has been increasingly challenging, but this has not dampened the spirit of the country's entrepreneurs. Read more
Economy
Signs point to possible US economic 'soft landing' in ClearBridge analysis
The US economy may be steering towards a 'soft landing' despite mixed signals from the stock market, according to a recent analysis by ClearBridge Investments. Read more
Economy
Alternative fund managers predict capital raising surge in 2024
Alternative investment fund managers are predicting a sizable increase in capital raising efforts in 2024, according to a global study by Ocorian, a leading alternative investment fund administratorRead more
Economy
Understanding the economic indicators that affect your earnings
The landscape of personal finance is profoundly influenced by broader economic trends and indicators. Read more
Economy
Navigate market turbulence with expert advice: no crystal ball needed
In an era fraught with investment market uncertainties, from fluctuating interest rates to geopolitical strife, seasoned market experts are guiding investors through the mire, offering sage advice on ...Read more
Economy
CPI data another piece in RBA's interest rate decision puzzle, says REIA
The latest Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) shows that inflation rose 3.4% in the 12 months to February 2024, unchanged from the previous two months, ...Read more
Economy
Including passive job seekers in unemployment measure doesn't impact economic cycle view, study finds
New research from e61 Institute has found that while current unemployment measures may not capture all job seekers, broader definitions that include passive job searchers do not provide better ...Read more
Economy
Survey reveals heightened job security concerns among IT workers in 2024
A recent survey conducted by Authority Hacker has revealed that 89.66% of IT workers in the United States have increased concerns about job loss in 2024. Read more
Economy
Australian founders adapt to the challenging fundraising environment with optimism and strategic shifts
The landscape for start-up funding in Australia has been increasingly challenging, but this has not dampened the spirit of the country's entrepreneurs. Read more
Economy
Signs point to possible US economic 'soft landing' in ClearBridge analysis
The US economy may be steering towards a 'soft landing' despite mixed signals from the stock market, according to a recent analysis by ClearBridge Investments. Read more
Economy
Alternative fund managers predict capital raising surge in 2024
Alternative investment fund managers are predicting a sizable increase in capital raising efforts in 2024, according to a global study by Ocorian, a leading alternative investment fund administratorRead more
Economy
Understanding the economic indicators that affect your earnings
The landscape of personal finance is profoundly influenced by broader economic trends and indicators. Read more
Economy
Navigate market turbulence with expert advice: no crystal ball needed
In an era fraught with investment market uncertainties, from fluctuating interest rates to geopolitical strife, seasoned market experts are guiding investors through the mire, offering sage advice on ...Read more