As any new parent soon discovers, childcare is a considerable household expense when one or both parents have to return to work. With the Federal Election just a week away we thought it was important to scan over each major parties childcare policies.
Both the Liberal and Labor parties frequently use the term “working families” in their pitches to the electorate, reflecting the fact many people cast their vote based on how their hip pocket is feeling… and the costs of childcare are a significant part of the health of that particular pocket.
As the Federal election on May 18 looms, here’s a quick primer on the childcare policies of the two parties most likely to form government…
From last July the government introduced a new Child Care subsidy to replace the Child Care Benefit and Child Care Rebate. The subsidy is paid directly to providers so that they then reduce the fees they charge you.
The subsidy is available for children attending centre-based day care, including long day care and occasional care; family day care; outside school hours care, including before, after and vacation care. You also need to meet other conditions, including that you care for your child at least two nights per fortnight, or have 14% care and meet immunisation requirements. There’s also an additional child care subsidy if you’re a grandparent, transitioning to work, or experiencing temporary financial hardship.
The amount of subsidy you can get is based on your family’s income, the hourly rate cap based on the type of approved child care you use (centre-based day care, family day care, etc) and your child’s age, and the hours of activity you and your partner do (also known as the ‘activity test’, and calculated over a fortnight).
The Liberals claim the new subsidy leaves “a typical family” around $1,300 better off p.a. and reduced out-of-pocket childcare costs for families by more than 10% within the first 6 months of its introduction.
The ALP claims that during the period the Liberal/National coalition has been in power, the cost of childcare has gone up 28%, costing families using long day care, for example, $3,000 more a year.
As part of its 2019 election promises, the ALP says 887,000 families will see fee reductions of up to $2,100 per child off their yearly childcare bill. This will be achieved by increasing the subsidy rate from 85% to 100% up to the hourly fee cap – currently $11.77 per hour for long day care – for those earning up to $69,000 and who meet the activity test requirements.
Families earning between $69,000 and $100,000 will receive a subsidy rate between 100% and 85% up to the hourly fee cap, and families earning between $100,000 and $174,000 will receive a subsidy rate between 85% and 60% up to the fee cap, which develops an effective increase of 10%.
The ALP claims this policy will make childcare either free or nearly free for up to 372,000 families.
Labor is also addressing claims by many people who use childcare services that providers increase fees randomly and excessively, by promising to empower the Australian Competition and Consumer Commission to investigate such rises as part of its $4 billion childcare package.