Government flags investment to 'make childcare more affordable'

To cut the cost of living for a predicted quarter of a million families, the Morrison government has announced a hefty budget investment in childcare, which is tipped to allow the equivalent of around 40,000 individuals to work an extra day per week and boost the level of GDP by up to $1.5 billion a year.

The changes, due to kick in on 1 July 2022, increase the childcare subsidies available to families with more than one child aged five and under in childcare by 30 per cent to a maximum subsidy of 95 per cent of fees paid for their second and subsequent child. Also included is the removal of the $10,560 cap on the Child Care Subsidy.

In a joint statement, Minister for Women’s Economic Security Jane Hume, Minister for Women Marise Payne and Minister for Education Alan Tudge flagged savings of $71 a week for a single parent on $65,500 with two children in four days of long day care who chooses to work a fifth day.

“Under these changes, a family earning $110,000 a year will have the subsidy for their second child increase from 72 to 95 per cent, and would be $95 per week better off for four days of care,” the ministers said.

“A family with three children on $80,000 would have the subsidy increase from 82 to 95 per cent for their second and third child and be $108 per week better off for four days of care.”

Treasurer Josh Frydenberg said the investment builds on the $10.3 billion the government is already investing in childcare this year.

“These changes strengthen our economy and at the same time provide greater choice to parents who want to work an extra day or two a week,” he said.

“This is a targeted and proportionate investment that simultaneously makes childcare more affordable, increases workforce participation and boosts the Australian economy by up to $1.5 billion per year.”