To say the Abbott Government’s paid parental leave policy has few friends is an understatement. Critics have far out-numbered supporters, whose apparent reluctance to sell the policy hasn’t helped boost its popularity.
Like many others I have argued, on several occasions, that the planned $5.5 billion investment would be better spent on childcare if the objective is to boost women’s workforce participation. This is based on compelling evidence from the Productivity Commission and the Grattan Institute that childcare is a more effective lever on women’s workforce participation than paid parental leave.
Just before the government handed down its first budget I wrote that in an ideal world it wouldn’t be a matter of “either or” between paid parental leave and childcare; there would be adequate and appropriate funding for both. But I also wrote that in the real world, with a “budget emergency” no less, I thought we’d be dreaming if we thought we’d get both.
We didn’t get both and it turns out we got less than even the “either or”. It looks like we might be getting paid parental leave — at least a watered down version of what was originally proposed — but at the same time half a million families will lose a chunk of their childcare assistance.
The government is planning on freezing the income eligibility thresholds for the Child Care Benefit which is a means-tested payment that helps low and middle-income families deal with the costs of childcare. It currently helps about 800,000 families a year and the decision to freeze the threshold is estimated to strip $230 million of funding over the next four years. The Education Department expects it will impact about 500,000 households.
“It is an aggressive attack on family budgets, and on women trying to return to work,” Shadow Education Minister Kate Ellis said. Ellis told News.com.au that it will disproportionately hurt low and middle income families.
The Assistant Minister for Education Sussan Ley argues that despite the changes the government has actually increased its childcare investment by adding $28.5 billion in assistance over the next four years.
But the chief executive of peak group Early Childhood Australia Samantha Page is adamant the freeze will adversely affect families.
“Childcare fees have risen 7% on average over the past decade, well above indexation, meaning that childcare payments are already losing real value over time,” Page said.
What would help your family more? Paid parental leave or better access to affordable childcare?