The Australian Childcare Subsidies are Ridiculous — Here is Why
Child care is a hot topic every Australian election, for good reason. It’s incredibly expensive to send your children to daycare in Australia — in the region of $150 a day in capital cities.
‘Luckily’ there is a subsidy — but it still doesn’t deal with the actual issues. Let’s imagine a suitably middle class family, where mum has a kid around 30 years old. She graduated from university around 24 and started with a salary of $55,000 a year and over the last few years has gotten some a promotion every few years and some indexed salary raises. She earns $80,000 now and her husband earns $90,000. Solidly middle class by any definition.
So Sarah (let’s call her Sarah) heads back to her job in the city after six months of maternity leave. She finds a daycare close to the office so she can continue to work the 8am-530 her bosses expect her to keep and the father, Adam (let’s call him Adam) helps with pickups once or twice a week. She’s eager to have the baby closer to her so she can express (pump) milk and keep her baby breastfeeding.
She earns around $1169 after tax a week and pays around $451 in daycare (based on a bargain hunters CBD cost of $150/day for child care) after subsidies so it still definitely makes sense to keep working. Great work, government.
Unfortunately the motherhood wage gap starts to kick in. It’s well established that the majority of the wage gap actually occurs around missed opportunities due to caring for children. Sarah misses some big projects and gets cost of living salary increases for the next two years. Adam is still perceived as being as career minded and gets a decent promotion. After 2.5 years they start to consider their next child and Sarah is earning $85,000 while Adam now earns $115,000. At this point Sarah realises that they’ll end up paying $1092 a week in child care after subsidies and she’ll only earn $1,232.62 so she’ll effectively be working for $140 a week cash in the hand. So she decides to drop out and stay at home — just for now of course! (except when she tried to reenter the workforce in 5 years in a school hours position, she takes a 60% pay cut).
So, obviously we don’t need to feel sorry for these guys — they earn good money! She can afford to stay at home! but if either party is serious about wanting women to end up participating in leadership roles in Australian society then it needs to be possible and affordable to have an average family and a career. At the moment there is an invisble hand nudging women out of their office careers in their 30’s.
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My fantasy solution to this is that the government takes over child care. Child care centres are set up on public school grounds so parents can have a single dropoff for young children. The adminstration is shared which makes it more efficient that the current system of small childcare centres (and better deals can be negotiated for supplies like toilet paper, tissues, markers and so on). Child care workers have broader career paths and teachers have onsite child care.
The current childcare subsidy of $10,490 is paid to all primary carers. Government childcare costs exactly this much. Stay at home parents can bank it (rather than a family benefit). Private day cares can operate and charge more than this and people can opt in if they feel the extra services are worth it.
So, Bill Shorten, Scott Morrison, Richard De Natale, etc let’s start redesigning child care. Stop fiddling with the edges of the child care system and work out ways to make it work for parents who work and value the parents that chose not to.
Credit to flickr for the sleeping baby https://www.flickr.com/photos/pinkstockphotos/
