Andrew Leigh

HOUSE OF REPRESENTATIVES, 4 AUGUST 2021

The female labour force participation rate in Australia is higher than the OECD average but so is the share of Australian women working part time. We know very clearly that childcare access is a core driver of women's labour force participation. You see this in studies that look across countries. You see this in individual studies by economists who have looked at particular policy reforms, such as Quebec's $5 a day early childhood or policy changes in Washington DC.

It's very clear that, if you want to increase women's labour force participation rates—which isn't just an equity issue; it's also a productivity issue about getting the most out of the productive capacity of the Australian workforce—then you need to tackle early childhood.

But the coalition's policy applies only to some families in need. There are, according to Labor's analysis of Parliamentary Budget Office work, 860,000 families—86 per cent of all families with children aged under six in the system—who are better off under Labor's policy compared with the coalition's. Indeed, every single family with one child aged five or under in child care—some 727,000 families—will receive absolutely no lift in their childcare subsidy rate under the Liberals, but, so long as their incomes are below the threshold, they will benefit from Labor's.

Labor's policies will do more to boost women's labour force participation—a critical issue for Australia. It is currently the case, according to a UNICEF report entitled Where do rich countries stand on childcare?, that Australia ranks 37th out of 41 countries. UNICEF found that Australia was one of only eight countries where child care consumes at least a quarter of the average wage, which is why the Leader of the Opposition made early childhood a focus of last year's budget reply and why the government, belatedly, had childcare reforms as part of this budget. But, as so often happens with the coalition, whether it's JobKeeper or vaccination, the government seems to have an uncanny ability to take a good idea and muck it up. As the Grattan Institute has said very clearly in comparing the two sets of policies:

… Labor's policy is broader, with all families who use child care standing to gain, regardless of the number of children, their age and the family income.

The Grattan Institute goes on to say of Labor's policy:

… it would also have bigger benefits, sharpening workforce incentives for a much wider group of families. The boost to GDP from higher workforce participation is likely to also be about three times bigger.

The institute points out that, in terms of the impact on family budgets, the big difference is that the government's policy affects families with multiple children aged under six in care, whereas Labor's policy extends it to families with one child in care. It points out that making such an investment is important for women's workforce participation and long-term economic security, but it's also critical to Australia's productivity.

Labor will continue to stand on the side of improved accessibility to child care. We will support the modest changes in this bill, which reflect those announced on budget night, but we believe the government has to go much further if we are to achieve the kind of egalitarian, high-productivity society that Labor so strongly supports.

ENDS

Authorised by Paul Erickson, ALP, Canberra