12 May 2015

Mother’s Day “gift” tackles childcare costs

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On Mother’s Day, Canberra offered a high-profile incentive for women to return to work. This “gift” came bundled with a $3.5 billion childcare sweetener that’s built around means-tested subsidies and helping families find affordable care.

The goal is to increase participation by women in the workplace. The childcare incentive enables families to manage the high cost of care, and encourages women to continue working throughout their child-rearing years.

A high-profile subsidy program becomes operational by 2017. This seeks to bring more women out of homes and into full-paying jobs. The move coincides with increasing female participation by 3 per cent under Australia’s G20 commitments.

Concerns are mounting that Australia lags behind other G20 countries around its female participation rates. This is behind Canada, New Zealand and other developed countries.

Earlier, the widely-debated “Inter-generational Reporthighlighted concerns around insufficient participation by women, at different stages of their careers or life-style choices.

In the trenches

The Commonwealth’s childcare subsidy, unveiled by federal treasurer Joe Hockey, encourages parents to do more “paid work.” In future, childcare subsidies will be means-tested for families earning between $65,000 and $185,000.

Among the reforms, a new single means-tested child care subsidy kicks in from July 1, 2017. This replaces the child care benefit, child care rebate and jobs, as well as education and training and fee assistance programs.

The proposal also replaces paid parental leave. The focus is to offer better childcare subsidies and bulk the ratio of women at work.

How the math stacks up

Families earning up to $65,000 will receive 85 per cent of the childcare cost per child, or a designated benchmark price, whichever is lower. This goes down to 50 per cent for families with incomes of $170,000 and above.

To be eligible, parents must do eight hours a fortnight of work, study or training to qualify for any childcare support.

Response is mixed
This initiative has received a mixed response across the political divide and childcare advocates. There’re also concerns around removing paid parental leave that offered partners more flexibility around staying at home.
Samantha Page, chief executive for the peak early childhood lobby group, Early Childhood Australia, welcomes the "historic reform," but says that changes to parental leave is a "real pity.”
This effectively reduces the amount of time that parents with a new baby can afford to spend with that baby. Moreover, this makes childcare more affordable for most families, but some children may be excluded from the system.
"We are concerned about the families who have, for one reason or another, not [been] able to have both parents participating in the workforce, and I think the suggestion that's always a choice is a bit misleading," adds Page.
The Australian Childcare Alliance, a group representing privately-owned childcare providers, wants more immediate help for families.
Alliance president Gwynn Bridge says there’s a long time between now and mid-2017. “Families right across the country are telling us they need relief now.”
Winners and losers
Facing a baffling array of “means-tested” subsidies, more clarity is sought around balancing the cost of childcare with income and assessing the quality of care in areas where families live. Women need to juggling conflicting demands around family or work-life.
To fully benefit from childcare reforms, families must calculate how much the childcare centre costs, how much couples earn, and the number of days that children are in care.

A first glance, this math seems simple. But women often struggle with weighing the cost of quality and consistent care vs their earning capacity.

Moreover, high-income suburbs may be better catered for, compared to the less salubrious neighbourhoods. Or the quality of care may not suit discerning parents that seek highly-qualified care-givers in an unregulated industry.

A proposed means-testing system means women seeking more flexible arrangements may miss out.  There’s also little clarity around the complexities of covering “gap prices” or calculating the number of children in care.

More detail is sought around bench-marking pricing arrangements, how often these are indexed, or whether these vary based on location.

So, while, most mothers did appreciate their “gift” from Canberra, many are left wondering: are we there yet? 

Shahida has worked for global companies as well as start-ups in Sydney, Canberra, Hong Kong, Singapore, and Washington DC.
Her editorial portfolio incorporates Phillips Publishing International (Washington DC), IDG Communications & IDG Enterprise Group (Sydney, Canberra & Washington DC), Australian Consolidated Press and News Limited. For three years, she filed editorial for Singapore-based FutureGov Magazine.
Shahida has designed, developed, delivered and managed an extensive portfolio of conferences, seminars and workshops across major markets and topic areas.
Her portfolio of conferences incorporate FutureGov, Institute for International Research (IIR), Terrapin, KeyMedia and CEBIT Australia.

She holds degrees in journalism, mass communications, and English Literature

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