Last Friday, the Productivity Commission’s report into Childcare and Early Childhood Learning was delivered to the Federal Government, who must table the report in Parliament within 25 sitting days. Finally, after years of bubbling away, childcare has reached centre stage as a national economic priority.
Over the last generation, childcare has gone from a fringe “women’s issue”, to become the most important productivity challenge facing our nation’s economy. Politicians, economists and academics left, right and centre are unanimous in their call for more mothers to return to the workforce – and sooner – after childbirth. Why?
Because according to the latest Intergenerational Report produced by Treasury, by the year 2050 there will be just 2.7 taxpayers to each retiree. Today there are 5. In 1975 there were 7.5. Clearly the rate our population is ageing is rapidly outpacing our ability to create more taxpayers. And by 2050 our aged care and health care budgets are expected to double. This is frightening stuff.
Furthermore, the Grattan Institute’s research has found that if the rate of Australian working mothers was lifted by just 6% (to Canada’s rate), it would inject $25 billion into the economy – a year! That’s a lot more tax dollars to devote to aged care and health care!
Australian women are among the most educated in the OECD, yet they have one of the worst participation rates in the workforce during childbearing years. A great many mothers want to work (at least part-time) but don’t. Why not? I think it’s safe to say predominantly because of a lack of affordable and flexible childcare.
So we know the serious revenue challenge our economy is facing over the next 30+ years. And we know that enabling mothers to return to the workforce sooner will go a long way towards addressing the problem. On any logical analysis, the case for reforming the childcare system has been made. Now it’s time to implement practical solutions, facilitated by the Productivity Commission’s landmark report. A lack of reform is inexcusable.
Carping from those who, frankly, won’t be around by 2050 or who “never had childcare when I had kids” is unhelpful. With the greatest of respect to those from the “I had to do it all myself” or “I’m not paying for your kids” camps, the current generation of new parents never benefited from free education and cheap housing that previous generations did.
People who don’t have kids will certainly need the children of others to pay taxes to support them in older age. The fact of the matter is that times change and for our economy to keep flourishing, policy must change with the times. Let’s move on from the “it’s not fair” squabbling and actually fix the problem = win/win.
Now is the time to practically address the widespread shortage of long day care places for 0-2 year olds by enabling parents to affordably access regulated in-home care. This is particularly important for shift workers and parents working longer hours. A recent trial by the Rudd-Gillard Governments proved that parents do not want to drop their kids off to a childcare centre in the middle of the night. Any parents of young children could have told you this. Discriminating between modes of care is illogical and it is not the business of government to be effectively interfering in parental choices.
Reasonable incentives are also required for the establishment of new long day care places that aren’t overburdened with regulation, but provide quality and affordable care. And taxation reform is required to correct bracket creep that disincentivises many lower income earning mothers from working full-time.
The case has been made. The facts are clear. The time has come to solve our childcare problem.