CHILD CARE INQUIRY by Daniel AttardNews Weekly
Govt's wealth transfer from single-income to dual-income families
, August 30, 2014
On the July 22, 2014, the Commonwealth government Productivity Commission released its draft report on childcare and early childhood learning (CECL), predominantly exploring funding options for early childhood education and care (ECEC).
Government expenditure on ECEC has skyrocketed in the past five years and now represents an annual cost to taxpayers of approximately $7 billion per year by subsidising approximately two-thirds of the cost to families that use ECEC.
The terms of reference drafted by Treasurer Joe Hockey for the inquiry will mean that the Productivity Commission is likely to recommend funding models that will favour families with two full-time incomes ahead of families with a stay-at-home parent.
Mr Hockey has pledged in the inquiry’s terms of reference that the Coalition government is committed to establishing a sustainable and affordable CECL market, which “supports the community, especially parents’ choices to participate in work”.
Yet, in a glaring self-contradiction, in his maiden Budget speech in May this year he warned that “staying at home should be a parent’s choice, but there are limits to how much support the taxpayer can give”.
Although the inquiry is tasked to ensure “that public expenditure on CECL is both efficient and effective”, it has excluded from consideration the costs incurred by parents who raise their own children in the home. Instead, the Productivity Commission has been directed to explore “long day-care, family day-care, in home care, including nannies and au pairs, mobile care, occasional care, and outside school hours care”. There is no mention of parental care in any of the inquiry’s cost-benefit analyses and proposed funding models.
This is no accident or honest oversight. By far the most cost-effective mechanism available to society for the rearing of children is via a stay-at-home parent (leaving aside many other sociological benefits of parental care for children).
The Abbott government, via the Productivity Commission, is not merely peddling a more business-oriented economic agenda. The Productivity Commission’s recommendations, coming as they do on top of Prime Minister Abbott’s “signature” paid parental leave scheme, constitute a strategic, deliberate and philosophical attack on households with a stay-at-home parent.
The Liberals seem to have joined with Labor and the Greens in promoting these policies. Conversely, some senators from the Nationals, the Democratic Labour Party (DLP), Family First, Palmer United and other independents have opposed such moves.
The reigning economic orthodoxy has brought about a monumental shift in the psyche of the Australian populace over the last 20 years. In days past, children were considered a blessing to be cherished, loved and welcomed into their families. Today, the love may still be there, but children are by and large considered a revenue liability. The government seeks to compensate for this by heavily subsidising, through the provision of institutionalised child-care, mothers who return to the paid workforce.
This is illustrated by calls from child-care industry lobbyists to have child-care fees deemed tax-deductible, thereby reducing children to a workplace expense (although the Productivity Commission is not advocating this).
So the choice whether or not to have children is reduced to a cost-benefit analysis. This is all too clear in the Productivity Commission’s draft report. There is not a single prominent mention in the draft report of the socio-economic benefits for children when they are raised by a stay-at-home parent.
Instead, the Productivity Commission goes to great lengths to discuss the need to compensate mothers for the “wage growth penalty” they suffer in order to have children.
Without addressing the finer detail in the inquiry’s 908-page draft report, one key draft recommendation proposed is that all current payments for non-parental care be replaced by a single “means-tested” payment. On face value, this appears to bring to an end the middle and upper class welfare that has become so prevalent in contemporary Australia, though this is not the case.
In two of the proposed funding models most likely to receive greatest consideration by the Abbott government, households with an annual income of $300,000 or more will still receive substantial support from the taxpayer (approximately 28 per cent of out-of-pocket expenses). In these two models there is no upper income limit where financial assistance cuts off.
At the same time, however, the government is currently attempting to eliminate assistance to single-income households with a stay-at-home parent where the annual family income exceeds $100,000.
The main political parties have made it abundantly clear how they view family and child-rearing. In light of Treasurer Hockey’s views on where government assistance should be focussed, if your family doesn’t fit that picture, clearly you are on your own and we will continue to see a net wealth transfer from single-income to dual-income families.
The Productivity Commission is holding public hearings into the inquiry across Australia. News Weekly readers are encouraged to express their views at these hearings and bring to the attention of the Productivity Commission the oversights and flaws of its draft report.
Please visit the Productivity Commission website for details, and www.family.org.au for more information.
Daniel Attard lives in Melbourne and has recently completed a master’s degree in social science (public policy). He is commencing a doctorate in sociology in which he will study the social, economic and psychological costs of family breakdown.