More Child Care Should Make Work Choices Easier

Sydney Morning Herald

Saturday December 9, 2006

A PARLIAMENTARY report called Balancing Work and Family might easily have begun with a tug at the heart strings. Instead, the foreword by Bronwyn Bishop, the chairwoman of the committee that produced the report, is very much a plea to the head, singularly unsentimental.

After almost two decades in Parliament, as a senator and as the member for Mackellar, Ms Bishop knows the value of an appeal to smart economic management. So women are "human capital" - capital Australia can't afford to waste. They outnumber men when it comes to gaining secondary and tertiary qualifications. Such learning should not lie idle; government deserves a return on its investment in women's education. Getting more women into work could boost national income by more than the GST tax reforms of 2000.

And what prevents this? Lack of child care. Ms Bishop quotes a statistic that 162,000 women would join the workforce if they could get child care. Central to the report, then, are recommendations to make child care more affordable and flexible and to improve the outlook for women who work or would like to.

For the committee, increasing government support for child care involves a more liberal definition of what child care should include. The committee suggests scrapping distinctions between various types of child care which make no sense outside the bureaucratic corridors of Canberra. The definition of approved care should be enlarged to include family day care, occasional care and outside-school-hours care, along with in-home care and care in private preschools. The committee says they should all attract the same government payments and tax concessions. And so they should - as long as standards of care are not compromised.

Less straightforward is the suggestion that nannies also be classed as approved care. This recommendation is already being criticised as a sop to the rich - as maid services masquerading as child care. However, that overlooks the many everyday households where parents work odd or irregular hours and need the flexibility a nanny can provide. Anyone who doubts that has only to ask the nanny agencies who their clients are.

The committee also wants to end the fringe benefits tax on child care provided by employers unless it is on the employers' premises. This restriction is arbitrary and discriminatory; it favours those who work for those large employers who can provide child-care services on site at the expense of those - presumably the majority - whose employers can't. And what of the self-employed? The Government should waste no time in following Labor's pledge to scrap FBT on employer-funded child care.

The committee's most contentious recommendation is to make the cost ofapproved child care tax deductible. Tax deductibility would not replace the present system, which offers both the Child Care Benefit and a 30 per cent child-care rebate. Rather, it would be an alternative. That's because many low- and middle-income earners would be better off sticking with the benefit and rebate. Tax deductibility would most advantage those who earn more and, consequently, face higher tax rates. There would have to be a cap on the level of benefits of tax deductibility to escape an allegation of middle-class welfare.

More generally, however, tax deductions and rebates are a questionable means of delivering help to families; child-care fees have to be paid now, while the benefit of tax rebates (and deductions) may not be received for months, depending on how individuals have arranged their tax payments. The Government should rethink the whole system of child-care support so that benefits are received as expenses are incurred.

But whatever the Government does to help parents, it will be of limited benefit unless, at the same time, it addresses the six-figure shortage of child-care places. And that can't be done without addressing the shortage of child-care workers, which the Child Care Association thinks will reach 10,000 in the next two to three years. It would be a bitter irony if the main effect of improved government support for parents was to accelerate the already alarming increases in the costof child care.

© 2006 Sydney Morning Herald

Back to News Index | Back to Home