Policy report

The child care subsidy: options for increasing support for caregivers who want to work

Child care assistance Government subsidies Labour force participation Caregivers Child care Australia

KPMG Australia (KPMG) believes there are also considerable long-term benefits for our society of transitioning to near fully-funded child care for children under the age of five (that is, a subsidy for all such children of 95 percent of the current hourly rate cap). This transition can involve interim steps which progressively improve parents’ situations.

These benefits include the social and cognitive development of the children themselves, the scope for both parents to take on as much work as suits their circumstances during the child care years, and the increased career-long productivity of those parents from having had the ability to strengthen their engagement with the workplace and with professional development opportunities during the child care years.

There are also non-financial factors including availability, flexibility and quality that influence a family’s decision on whether to access additional child care services in order for a parent to be able to take on work opportunities. This paper does not explore these factors.

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