Australia, Coming Soon - A Childcare Means Test

David Livingston/Getty Images

It seems there is another shake-up coming to Australia’s family payments system with The Australian reporting this morning that a Productivity Commission report, to be handed to the Government this month, recommends “families be able to access one simplified, means-tested payment that would cover the use of nannies.”

The driving force to the change, according to The Oz, is that the Commission believes that working mothers face a very high effective marginal tax rate due to the high cost of daily childcare.

Crucially the Oz says that:

The Productivity Commission proposals would mean the end of non-means-tested government assistance for the costs of childcare.

Key here is that “the commission wants to simplify the childcare payment stream to target it to families where it would generate the biggest public return for the taxpayer money spent. It believes payments are going to high-income families that would be participating in the workforce regardless of the rebate.”

It is going to be an interesting debate and one worthy of having with the union movement behind means testing, but the Australian Chamber of Commerce and Industry (ACCI) is the only business group in favour at the moment.

The trouble with this measure though, for the Government and for the Productivity Commission, is that The Oz has already picked up on the part of the recommendations that may offer in-home care – nannies.

This might derail the debate before it even starts.

You can read more here

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.