Key Point
- Increased childcare subsidies could cover up to 90% of a family’s childcare costs.
- A federal study is examining how Australia’s early childhood education and care sector can be made more accessible.
- By getting more women into the workforce, we can increase GDP.
Most Australian parents who leave their children in childcare will see reduced service fees from July, but more changes could come to the childcare sector beyond the increased subsidies.
Under the new subsidy rates, more families will be able to receive reduced childcare fees, and many families already receiving childcare subsidies will pay less.
With some paying 90% of childcare fees under the new system and efforts to make childcare in the country more affordable and accessible, the next step is Australia. Some may wonder if there will be universal free childcare for children.
Do you have free daycare?
According to OECD data, there are large differences in household incomes that parents pay for child care across countries.
Italy, Latvia and Malta are the few countries that provide free childcare, while the Czech Republic (19–38 percent) and Switzerland (11–27 percent) contribute the largest share of household income to child care. One of the countries in need. Children who go to nursery school.
American parents who put their children in day care put 23 to 50 percent of their income away.
How much do Australian parents spend on childcare?
Australian parents may be able to get government assistance to cover some of their child care costs, but OECD statistics show that families still spend 10-16 per cent of household income on child care.
This is higher than the OECD average of 8-10%.
Currently, for households with incomes below about $72,000, the government can cover up to 85% of their tuition costs, while high-income earners can get up to 20% of the cost.
The changes, which will take effect on July 1, will change income standards so that families earning less than $80,000 a year may be eligible for government subsidies of 90% of childcare costs.
The maximum household income for those eligible for the subsidy will also increase from approximately $346,000 to $530,000.
From 1 July, more Australians will be eligible for increased childcare subsidies. sauce: Getty / Kebajefimiya
Is free childcare universally possible in Australia’s future?
The Productivity Commission’s review, which began to be submitted in March, looks at how Australia’s early childhood education and care sector can be made more accessible and better support children’s learning and development. .
As part of the study, the Productivity Commission will consider a universal childcare subsidy rate of 90 percent.
Options to improve or support economic growth and productivity by enabling increased labor force participation are also within the scope of the study, so those involved in the study will be able to understand how universal free childcare works in Australia. Nothing prevents you from considering
Economist Konrad Riberis said that so far free childcare has worked around the world because it was provided by the state.
“So there are no or very few private providers. That’s sort of the difference with Australia. There are some, but the state doesn’t provide childcare,” he said. .
Mr Riberis said this made it unlikely Australia would introduce universal free childcare anytime soon.
“This is a big issue because private health care providers are very sensitive to the subsidies available to parents and their pricing takes that into account. The benefits may be short-lived for some parents, as prices start to change before they arrive,” he said.
“It’s a subsidy scheme that provides subsidies for something, but it can’t do everything. So the only cost-effective way to get free childcare in Australia is for government agencies to To step in and become a bigger provider.”
Mr Riberis welcomed the study examining the efficiency and effectiveness of government investment in this sector and the appropriate role of government.
“What you can do is reform the subsidy system so that we can fund states to establish free or low-cost childcare.”
New South Wales and Victoria recently expanded their education systems, allowing residents of each state an additional year of free, play-based education and giving parents access to free childcare from an early age. .
New South Wales Prime Minister Dominic Perrott and Victoria’s Prime Minister Dan Andrews said the revamped system will not only give children the skills they need for school and life, but will also help “hundreds of thousands of working families. He said it was a “revolutionary system” that would bring benefits.
educational and financial benefits
It wasn’t long ago that the federal government made childcare virtually free, albeit for a short time anyway.
People sheltering children during the height of the COVID-19 pandemic in Australia Because it was fully subsidized by the government.
An Australian National University report at the time recommended maintaining free childcare.
Professor Sharon Friel said in the report, “Free childcare not only has the benefits of providing important cognitive and emotional development opportunities for children from socially disadvantaged families, it is also economically viable. It will be a huge benefit,” he said.
“Free childcare will enable more women to return to work, making a significant contribution to our country’s GDP.”
Affordability and improved access to childcare are expected to boost women’s participation in the workplace. sauce: Getty / west end 61
Accessible childcare and female workforce
Some women feel that returning to work first after taking maternity leave only yields a small benefit. Because you pay for childcare.
Riberis said he expects an increase in childcare subsidies, which takes effect in July, to be a factor in determining more women returning to work after giving birth.
“Better access to childcare will increase female labor force participation,” she said.
Among the four main recommendations of the 2021 report released by the nonprofit The Parenthood included a call for free, quality early childhood education and care for all families in Australia.
The report argued that better access to childcare would boost child development, increase women’s labor force participation and productivity, and reduce the gender income gap.
“If Australia were able to raise female participation to the same level as male participation, it would boost GDP by 8.7%, or $353 billion, by 2050,” the report said.
https://www.sbs.com.au/news/article/childcare-will-be-cheaper-from-july-in-australia-could-it-ever-be-free/4plyazbez Childcare subsidies are on the rise, but childcare could be free in Australia
