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Childcare costs drive parents out of workforce

Why work when it’s more economically viable to care for your kids?

According to the Productivity Commission’s 2016 Report on Government Services, many adults are choosing to care for children rather than work, due to rising childcare costs.

Roughly half of respondents from a survey for the report stated they were not in the workforce because of a child care service reason. Of these, 30.8 per cent cited childcare costs as the main impediment.

This concern is borne out by statistics provided in the report. Both day care and preschool costs are spiralling. From 2013 to 2014, the median cost per hour of preschool crept up from $2.14 to $2.20. The median weekly cost of long day care jumped 4.9 per cent, inflation aside, during 2014–15.

John Cherry, advocacy manager at Goodstart Early Learning, said this was because “government assistance has not been keeping up with the cost of care”.

Only family day care marginally bucked the trend, decreasing in price by 0.7 per cent over the same period.

The rising costs are occurring alongside an astoundingly poor preschool enrolment rate for NSW. At 71.3 per cent, it is the lowest of all states and territories by more than 10 percentage points.

NSW Council of Social Service NCOSS chief executive Tracy Howe told The Northern Star this was due to the expense of childcare in the state. “We are seeing many families miss out due to affordability,” Howe said. “New South Wales has the most expensive services in Australia. This isn’t surprising when the NSW Government spends less on early childhood education and care services than any other state or territory.”

The NSW Government, in an attempt to redress the unfavourable statistic, unveiled programs worth $45.5 million late last year.

The federal government is also attempting to trim the cost of childcare. In December, it introduced legislation to implement its $3 billion Jobs for Families childcare package.

Yet shadow minister for education Kate Ellis is not convinced by the government’s efforts. “It takes a very special kind of skill for a government to spend billions of dollars to make hundreds of thousands of families worse off,” she said. Although she confirmed Labor would not oppose the bill, she reserved the party’s right to amend, oppose or re-formulate it following a Senate inquiry.

Whether the investment will result in parents working rather than caring remains to be seen.


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