Nannies Would Be Subsidised In The Productivity Commission's Child Care Proposal

Lenny Hayes with 12-month-old son Hunter Hayes and wife Tara Hayes after he announced his retirement during a St Kilda Saints AFL press conference in Melbourne, Australia. (Photo by Michael Dodge/Getty Images)

The work force loses highly experienced people regularly because they haven’t been able to get child care.

The Productivity Commission, releasing a draft inquiry report on Childcare and Early Childhood Learning, highlighted the vital role of child care and early learning in both child development and work force participation.

“Our recommendations seek to make childcare more affordable, flexible and accessible. Furthermore they will provide a framework for a more financially sustainable childcare system for taxpayers into the future,” says commissioner Dr Wendy Craik.

“Our current system does not meet the needs of all families and the costs of supporting the current childcare system are increasing at an unsustainable rate for taxpayers.”

A key recommendation is to replace the current multiple childcare subsidies with just one which would be paid directly to the parents’ choice of provider, and be means and activity tested.

The recommendations for means testing a single childcare rebate would still see all eligible families receiving a minimum of 30% of their reasonable childcare fees reimbursed by taxpayers.

Other key recommendations:

  • Nannies being eligible for childcare subsidies subject to appropriate qualifications (au pairs would not be eligible).
  • Removing restrictions on the number of child care places for occasional care and the hours that centres have to be open in order to receive Government subsidies.
  • School principals being responsible for ensuring schools offer before and after school care, including care for preschoolers.
  • A continuation of government support for access to preschool for all children in the year before starting school.
  • Increasing funding and subsidies for children with disabilities and additional needs.

The Productivity Commission’s preliminary economic modelling found the measures would likely result in up to 47,000 more full-time people entering the work force, a rise in labour supply of 0.4%.

The commission says economy-wide impacts of this are likely to be relatively small with a GDP impact of, at most, an additional $5.5 billion, but the social significance should not be underestimated.

The cost to government of the preferred settings is estimated at $8 billion per year. This is slightly above the forward budget estimates, but the commission has also included analysis for assistance arrangements that are likely to be within the Government’s funding envelope.

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