Policy report

Why reform of the Child Care Subsidy would strengthen Australia’s economy

Child care assistance Government subsidies Labour force participation Women and employment Child care Australia

In this report, the McKell Institute advocates for a universal Child Care Subsidy, and evaluates the Working Family Child Care Boost announced by Federal Labor Leader, Anthony Albanese, in his budget reply speech of 8 October 2020.

A comprehensive overhaul of the Child Care Subsidy is a fundamental microeconomic reform essential to Australia’s successful emergence from the COVID-19 pandemic. If we are to achieve strong and sustained job creation, we need an economy that is healthier than it was before the pandemic struck. Reform of the Child Care Subsidy would boost two of the three P’s identified by successive Intergenerational Reports as contributing to economic growth: workforce participation and productivity.

Reform of the Child Care Subsidy would also help remedy a longstanding injustice against working women, who are expected to bear most of the responsibility for unpaid family caring work while their male partners continue to progress in their paid working careers. This highly uneven distribution of caring duties is largely responsible for a gender pay gap, a gender income gap and a gender superannuation savings gap.

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