Cheap child care is good for economy, says Australian government

According to a top expert, a national program that provides families with access to affordable, high-quality childcare would begin to tear down the “architecture of discrimination and difference” that prevents women from participating fully in the workforce, including glass ceilings, glass walls, and sticky floors.

Rae Cooper, a professor of gender, work, and employment relations at the University of Sydney, claims that the loss of women from the workforce due to parenthood responsibilities in their mid-to-late 20s trapped them in junior roles in industries and occupations with a preponderance of low-paid precarious jobs without career paths.
“Younger women have higher levels of educational achievement and participate in the workforce at the same rate as males. However, from their mid-to late-20s, participation drastically declines, according to Professor Cooper.

“This is the structure of prejudice and distinction.”

Glass walls, she claimed, kept women in feminized occupations, sectors, and jobs, while sticky floors were created when women predominated in “poor jobs” that were low-paying, unstable, and without any true career path.

According to Professor Cooper, the Productivity Commission’s decision to launch an investigation into universal access to childcare and education last week would mark the beginning of the removal of insurmountable obstacles to women’s full economic participation.

Prime Minister Anthony Albanese compared universal daycare to Medicare and superannuation when he announced the Productivity Commission inquiry last week at a childcare facility in Canberra.

We want to be the party that provides universal, cheap childcare, Mr. Albanese added, just as Labor is the party of universal Medicare and universal superannuation.

To debate universal childcare, 100 corporate and community leaders will gather in Canberra on Friday.

According to Leslie Loble, co-chair of the Council on Early Childhood Development, there were significant gains when universal programs that made childcare more affordable for all families were implemented in other countries.

In Quebec, Canada, a low-fee universal system was implemented in the late 1990s, and between 1998 and 2014, maternal labor force participation climbed by 13 percentage points, more than three times the pace of the rest of Canada, according to Dr. Loble.
In Washington, DC, where a program providing two years of free, universal, high-quality preschool for all families was implemented, female labor force participation climbed by roughly 12 percentage points between 2009 and 2016.

According to Dr. Loble, the city has one of the highest rates of mothers working in the USA.
The expected advantages of removing the majority of the financial obstacles to childcare were calculated by NSW Treasury last year. It projected that rising female labor force participation would boost NSW’s GDP by up to $23 billion annually and raise household income by $7800.

The Productivity Commission’s investigation will concentrate on two objectives: reducing obstacles to parents’ participation in the workforce and laying the groundwork for children’s future success and well-being.

According to a recent Productivity Commission study on government services, the total amount spent by the government on early childhood care in 2021–22 was $13 billion. That is expected to increase by $5.4 billion on July 1 when a new, more generous subsidy structure is implemented.

According to this scheme, which was a major election pledge, the maximum subsidy rate will rise to 90% for families earning up to $80,000 and will use a sliding scale for households earning less than $530,000. Additionally, it intends to include after-school care in the higher subsidy.

The Commission will look into a universal system that would include a subsidy rate of 90% for all families regardless of total income, though there probably would be a cap on the daily fee that would be reimbursed in an effort to stop providers from charging more than necessary.

The Productivity Commission’s investigation will heavily draw on the Australian Competition and Consumer Commission’s last year-old investigation into how to prevent price gouging when more generous subsidies are introduced.

According to a prior assessment by the Grattan Institute, a universal childcare system would cost $12 billion annually based on a 95% subsidy rate, but the economy would gain $27 billion as a result.

Changes to subsidies, according to Kate Griffiths of the Grattan Institute, could not be made hastily since the workforce for childcare needed to be established before demand rose.

The sector needs time to adjust, according to Ms. Griffiths.

The Productivity Commission will consider what constitutes a reasonable amount of time to guarantee that the workforce is prepared.

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