This budget may have been about “jobs and growth” but it’s certainly not one about jobs for working parents – particularly women keen on returning to the workforce after having children.
The “economic plan” it pitched last night failed to address one of the key inhibitors keeping women out of the workforce – expensive, inflexible and unobtainable childcare.
Worse, the $3.2 billion reform package that was supposed to make childcare more affordable for up to one million families has been put off for another year. The Government’s blaming delays in parliament for that one – it needs to cut parental payments to those receiving family tax benefit part B to pay for it.
The $7,500 rebate parents can use for every child in childcare continues to remain unchanged since 2008, despite childcare fees rising steadily over the last eight years. In some parts of Sydney, childcare costs more than $175 a day. Recently, the Department of Social Services revealed it expects fees to rise by 6.5% over the next financial year and a further 7.3% the year after. So by July 2017, some metropolitan centres could be charging $200 a day.
How many families could afford that? When women earn an average 17.3% less than full-time working men – and even less after taking a maternity leave stint – it’s easy to see which gender will ultimately be out of work in order to look after the kids.
Last year the Productivity Commission’s long-awaited report on childcare recommended a single means-tested payment covering the majority of childcare fees. It found such a new structure would lift female workforce participation by 1.2%, bringing 16,400 workers into the workforce and boosting growth by $1.3 billion in the first year.
The current plan to raise the $7,500 rebate cap to $10,000 for families earning less than $185,000 would have provided some help and no doubt pushed more women into the workforce or enabled more women to work more hours – but you’ll now have to wait until July 2017, at least.
But don’t worry, at least there’s some scope to top up the balance on the superannuation you’re not getting while you’re off work.
On this front, there was some good news for women taking time off to have children, particularly around superannuation top-ups that will target low income workers (the majority of whom happen to be female) and assist with those who’ve missed out on super contributions during career breaks.
Meanwhile, if you’ve created a profitable business to enable you to work flexible hours because you can’t afford childcare, well you’re in luck. There’s a lower tax rate of 27.5% on offer for businesses turning over up to $10 million.
As for paid parental leave, it’s all about savings in this year’s budget – a massive change from a party that was promising women their full replacement wage in a multi-billion dollar package just a couple of years ago. The papers revealed the Government will crack down on up to 80,000 families (remember the ‘double dipping mum’?) that receive paid leave from an employer as well as from the government. So don’t plan on putting anything away in order to help cover the costs of your return to work.
The key hope now on relief for working parents is an election campaign. Surely somebody can bring something to the table that’s better than this.