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The government made a step forward in the last budget by promising an extra $600 million a year on childcare, an increase of about 6 per cent.
The reforms which start in July this year will help about 270,000 families. It removes an annual cap of $10,560 on childcare payments to families with incomes over $180,000 from this July and increases by 30 percentage points the childcare payments for second and subsequent children.
But by spending more, Mr Frydenberg could give the economy an even bigger boost. For instance, a Grattan Institute study in 2020 said that if he spent an extra $4.4 billion a year it would lead to a 13 per cent increase in hours worked by second-earners with young children, boost GDP by about $11 billion a year, and add about $150,000 to the lifetime earnings for a typical mother.
The political momentum for spending more on childcare is growing, partly as a result of the experience during the pandemic when the federal government briefly made childcare free for all as a way of keeping the sector solvent during the lockdowns. The president of Chief Executive Women Sam Mostyn says women had a “taste” of free childcare, but they have now gone back to where they were.
The ALP has already signalled that it intends to campaign hard on its own more generous childcare policies. Mr Frydenberg has a chance in this budget to steal the ALP’s thunder while at the same time giving the economy a boost.
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Budget offers Frydenberg a last chance to fix childcare before election
Source: Philippines Alive
