The government’s desperation to dig itself out of the deep pit of gender damage it blundered into in February will yield benefits for a targeted section of working families, with an extra $1.7 billion a year in childcare subsidies. From next year, this will benefit families with more than one child in childcare and families earning higher incomes.
It’s possible that this package, or perhaps a small version of it, would have happened anyway before the events of February and March. Anthony Albanese spotted and hammered a Coalition weak point in his budget reply last year with his much larger childcare plan to lift subsidies and income thresholds (the Coalition’s response at the time, via Jane Hume — present at yesterday’s policy announcement — was to complain the policy wasn’t properly funded…)
Scott Morrison’s shrillness and tin ear on gender issues was on display back then. But Brittany Higgins, the Christian Porter allegations and the Coalition’s toxic attitude to women made sure that the budget would have to include a substantial bribe for women to take another look at Morrison.
Like any politically driven policy, it’s betwixt and between. It’s not as big as Labor’s policy, and not intended to properly address the systemic problems around childcare and its interaction with the tax and transfer systems, but it’s still substantial.
Grattan Institute head Danielle Wood, always a reliable guide on public policy who has a strong background on childcare economics, described it as modest but well-targeted. This was part of a broader consensus that it was a step in the right direction. But as Kate Noble and Peter Hurley point out, it won’t do anything to improve affordability for three-quarters of childcare users.
It’s also a bit neither fish nor fowl in terms of its policy goals, which are both to make childcare cheaper for, primarily, low- and middle-income earners, and to increase workforce participation. The Grattan Institute found that is was low- and high-income earners who faced the biggest disincentive to working more than three days a week, compared to middle-income earners. It also found that high-income — over $100,000 a year — earners faced the biggest disincentive to working five days a week.
Still, the policy will generate further pressure to increase subsidies for the other three-quarters of childcare users, and in particular one-child families, when no benefit flows through to them despite the inevitable government advertising campaign.
And the delayed start date of July next year, beyond the next election, might yet neutralise the political benefit of the scheme. If it’s all about practical support for suburban women and not the complex gender relations obsessions of the Canberra bubble, the money might need to flow a little sooner for parents with kids who’ll be off to school before much of that extra $1.7 billion reaches them.