NEW REPORT: WOMEN’S WORKFORCE PARTICIPATION COULD RISE BY UP TO 134,000 FTE IF GOV OPTS FOR $10/DAY CHILDCARE
25 November 2024 – A new report from Impact Economics and Policy shows women’s workforce participation could grow by up to 134,000 full-time-equivalent workers if the Federal Government caps daily early learning and childcare fees at $10 a day [1].
A capped fee is one funding model being considered by the Albanese Government, with the Prime Minister saying he wants universally affordable and accessible childcare to be part of his legacy.
The report highlights the limitations of the Productivity Commission’s recent modelling, which projected a far more modest increase in women’s workforce participation [2].
Lead researcher Dr Angela Jackson said that a number of limitations with the Productivity Commission modelling meant it had underestimated the positive impacts from women increasing their hours of work.
“Similar reforms in Québec, Canada, where childcare fees are subject to a daily cap, illustrate the scale of potential increases in women’s workforce participation under a fixed-fee model,” Dr Jackson said.
Jay Weatherill from Minderoo Foundation’s Thrive by Five campaign said the new analysis further strengthened the case for capping daily early learning fees at $10 a day.
“The Government is currently considering how to make childcare more affordable for families and taxpayers alike, and this report makes it clear that tinkering with the existing subsidy system is just throwing good money after bad.
“A $10-a-day cap on fees will lead to a significant uptick in women’s workforce participation.
“It will provide vital financial relief to families with young children who are doing it especially tough during the cost of living crisis.
“It will give our economy a boost and help meaningfully reduce the gender pay gap by enabling up to 134,000 women to re-enter the workforce.
“This report adds to a growing list of evidence that the Government should and must set a cap on daily early learning fees.
“Recent reports have highlighted the flaws in the childcare subsidy model, which despite a historic $5 billion investment has failed to meaningfully lower costs [3].
“The existing system has also created an uneven distribution of services, with providers predominantly expanding in affluent urban areas while neglecting regional and low socioeconomic communities [4].
“Most importantly, the current model has not addressed the fundamental barriers preventing thousands of Australian families from accessing high-quality early years care [4].
“It is abundantly clear that the only way to achieve the PM’s vision of developing a truly universal early learning system in Australia is through a fixed-fee model.
“This reform is in the best interest of Australia and enjoys overwhelming support from voters across all demographics – age groups, family types, and political affiliations [6].
“We strongly encourage the Federal Government to undertake this vital reform, and we look forward to working with them in overseeing its rollout,” Mr Weatherill said.
[1] Throwing Good Money After Bad – Impact Economics and Policy
[2] A path to universal early childhood education and care – Productivity Commission
[3] PM’s $5b ‘cheaper childcare’ subsidy gobbled up by fee hikes – The Australian Financial Review
