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Plan to shave $3,900 off childcare costs: 'A tax on women working'

·3-min read
childcare centre and money
The NSW government plans to open up 47,000 new childcare places by subsidising providers. (Source: Getty)

Families in NSW could save up to $3,900 a year under a new childcare subsidy plan announced by the state government ahead of its 2022 Budget.

NSW Treasurer Matt Kean told Sunrise this morning that the government planned to directly subsidise childcare centres so they could pass on the reduced cost to families.

Kean said $5 billion in government funding over 10 years would open up 47,000 affordable childcare spaces a year, helping to address the shortfall in childcare services in the state.

The plan could save families as much as $3,900 a year, Kean said, and grow the economy by $17 billion by allowing more women to participate.

“No woman should have to choose between having a family and having a career and this policy will go a long way to addressing that,” Kean said.

“We know that child care is a tax on women working. We want to remove that tax as much as possible.”

The $5 billion program is due to start in the next financial year and will ramp up over the forward estimates.

Australia has the fourth-most-expensive child care among developed nations, according to The Parenthood, with the average-earning Australian couple with two young children spending about a quarter of their household income on fees for early-childhood education.

The high cost of child care has been shown to stop women from going back to work, with 2018 KPMG research finding it was more expensive for many working mothers to work four or more days a week and pay for child care than it was to stay home to look after their children.

The sky-high cost of child care also featured prominently in the federal election.

Labor promised a boost to the childcare subsidy for every family earning less than $530,000.

Kean said parents would still be eligible for the Commonwealth subsidy and, together, the two policies would allow 95,000 women to enter the workforce or to take on extra hours.

The state is also overhauling its parental leave scheme for public sector workers, including offering parents an additional two weeks’ ‘bonus leave’ if leave entitlements are more equally shared between partners.

The NSW government is due to hand down the Budget next week.

Amanda Rose, founder of Small Business Women Australia and Western Sydney Women, welcomed the plan “especially because it’s coming from the supply angle”.

“So we definitely need more availability of childcare positions. It's pretty much a nightmare for mums to find a position,” Rose said.

She also urged the government to cap prices for the positions over the 10-year initiative.

“If it increases, then they're going to be back at square one,” Rose said.

“So, the government needs to make sure that the childcare provider isn't going to find a loophole somewhere to increase that childcare place for a mum.”

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