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A ‘fair go’ for families: Labor’s childcare pledge

Unpacking Labor's stance on childcare services in the recent budget reply speech

The idea of the ‘fair go’ is one that has become a cornerstone of the Australian political and social discourse. And yet, with notable changes to family structures and gendered participation in the workforce over the past twenty years, the presence of ‘fairness’ in government childcare policies has come under considerable scrutiny. With childcare at the centre of Labor’s budget reply speech last month, Anthony Albanese articulated the stance that “in the worst recession in a hundred years, we have to make sure that women aren’t forced to choose between their family and their jobs”. But does the new policy offering signal progressive economic and social reform, or is it merely another example of middle class welfare?

The current reality of the workforce is that the longer an individual spends outside of it, the more difficult it is to get back in. Consequently, after having children, many second earners and single parents, of which a disproportionate number are women, will return to work merely to keep their foot in the door. However, with the current annual childcare subsidy cap of $10,560 per child for households that earn between $189,390 and $353,680 a year, many second earners and single parents are limited to returning for no more than three days a week, as they can’t afford to pay high, unsubsidised childcare fees. 

In view of this, the Labor government have proposed to scrap the subsidy cap, and raise the maximum childcare subsidy rate from 85% to 90%. If this policy were to be introduced, households earning up to $80,000 a year would only have to pay 10% of their childcare costs annually. Additionally, Labor hopes to more gradually taper the proposed subsidy for higher earning families by decreasing the amount subsidised by 0.2% for every $1,000 earned above the $80,000 threshold. Thus, unlike the current policy, which prevents families that earn over $353,680 from accessing any childcare subsidies, Labor’s tapered subsidy system would support families earning up to $530,000.

But what would the effects of this change look like?

Drawing on the social implications that often sit at the core of childcare policy analysis, Labor are removing the long-standing disincentive for second earners and single parents to return to the workforce by scrapping the cap. However, this benefit is often construed as ‘middle class welfare’, introduced to support those that want the best of both worlds. This argument is overly simplistic, and fails to acknowledge that wanting to go back to work is for many no longer a choice, but a need. Whilst over the past 20 years, a woman returning to the workforce acknowledged that their wages would be used almost exclusively to cover childcare, with the norm having progressed from that of the stay at home parent, to having two working parents in most households, this is no longer satisfying. Where caring was once a woman’s issue, and children a family issue, Labor’s policy acknowledges that this is no longer the case, and that women deserve a ‘fair go’ to return to the workforce without a debilitating economic disincentive guiding their decision.

For those unconvinced by the social argument, Labor claims that such changes to childcare policy would promise national economic growth and bring direct benefits to the business sector. The Grattan Institute has estimated that the implementation of Labor’s plan would increase work hours for second earners and single parents by approximately 11%, and that this increased participation would boost GDP by more than double the cost of implementing the childcare policy itself. As such, it is timely to shift the way that we view childcare, and acknowledge that it is a service that directly impacts the national economy, rather than a service that only benefits part of the population. We support the building of a second airport in Sydney, or better roads in parts of Australia that are foreign to us, because even though we aren’t all likely to use these facilities, we acknowledge the economic benefits to the broader community. Why are we not willing to do the same for childcare?

But perhaps the most perplexing aspect of previous childcare policy considerations, is the lack of attention paid to the benefits expounded by such a service for the child itself. Quality childcare is often a fundamental part of a child’s academic and social development. This is because Australian childcare providers are guided by a national framework that provides a play-based means of incorporating pre-school skills, and gives all children the opportunity to learn using resources that may be limited at home. In addition to this, by interacting with childcare workers and other children their age, children are able to develop their communication skills and sense of trust in others; skills that are more difficult to develop in the familiar home environment.

Whilst the aforementioned benefits highlight the social and economic transformations that could be fostered by changes to childcare policy in Australia, Labor’s budget reply speech still failed to acknowledge how greater support would be provided to childcare workers, falling mute on the issue of a wage subsidy. This is an issue that extends to much of the care industry, as childcare, aged care and disability care workers remain some of the most poorly paid service people in the country. Thus, whilst Labor’s policy points to a ‘fair go’ for families, it needs to be considered whether those providing the service are getting a fair go themselves.