ADDRESSING CHILDCARE IN FEDERAL BUDGET WOULD EASE COST-OF-LIVING,
IMPROVE WOMEN’S FINANCIAL SECURITY
3 May 2024 – Abolishing the childcare subsidy Activity Test and raising early childhood educators’ wages in the Federal Budget would provide cost-of-living relief and improve women’s financial security, Minderoo Foundation’s Thrive by Five campaign has said.
According to a report by Impact Economics and Policy, removing the Activity Test could enable more than 39,000 primary carers, predominantly women, to re-enter the workforce, injecting more than $4.5 billion into the economy [1].
The report also found abolishing the test could enable over 126,000 more children, most of them from low-income families [2], to access the benefits of high-quality early learning.
Thrive by Five’s Jay Weatherill said it was high time the Federal Government abolished the Activity Test and also funded a long overdue wage rise for early childhood workers, 92 per cent of whom are women.
“These crucial reforms of our early childhood system would not only ease cost-of-living pressures for families and workers, they would also have a real and immediate impact on women’s financial security,” Mr Weatherill said.
“The Activity Test is particularly hurting single mums and their children and it is particularly hurting low-income and First Nations families.
“At a time when the nation is rightly focussed on how to prevent and respond to violence against women and their children, any reform that increases women’s choices and economic freedom should be on the table.”
The Activity Test, introduced in 2018, determines the number of hours of subsidised early learning a family can access, based on the hours they spend working, studying or volunteering.
If parents or carers do not hold a job or do another approved activity, they get no childcare subsidy and have to pay the full cost of early learning, which is $133 a day on average.
But many parents find it hard to look for a job if they do not already have childcare, and the system is particularly confusing and punitive for casual and shift workers who do not work regular hours.
“The Activity Test has created a system where parents cannot access early learning and care if they do not already have a job and they cannot find a job if they do not have access to care,” Mr Weatherill said.
“Instead of encouraging women to re-enter the workforce it has made it harder and too many children from low-income families are missing out on early learning opportunities as a result.”
The Government’s Women’s Economic Equality Taskforce and the Economic Inclusion Advisory Committee, as well as the Productivity Commission and Australian Competition and Consumer Commission, have all recommended significantly altering or abolishing the Activity Test.
Thrive by Five is also calling for the Federal Government to fund an immediate wage increase for early childhood workers, 92 per cent of whom are women.
“This is really about saying that we as a society value women’s work just as much as men’s,” Mr Weatherill said.
“Current rates of pay don’t reflect that at all. At as little as $23 an hour, they are lower than in many male-dominated industries that require fewer qualifications.
“For far too long educators have been underpaid and have been left unsupported. This must change, but we don’t want the cost passed on to families through fee hikes, which is why we are calling on the government to fund a wage rise in the upcoming budget.”
