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Richard Holden

The case for making childcare costs tax deductable

Government contributions will again increase demand without boosting supply. No wonder fees keep rising.

Making childcare available for more Australian families has many benefits. It provides more choice for families. It increases female labour supply, allowing women to return to the workforce earlier and work more hours, should they want to. And that has flow-on benefits in terms of the superannuation savings of women.

There is also evidence that daycare can be beneficial for some children.

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Richard Holden is Scientia Professor of Economics at UNSW Business School. Connect with Richard on Twitter.

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    Original URL: https://www.afr.com/policy/economy/labor-s-price-freeze-shows-the-economic-problem-with-childcare-subsidies-20240826-p5k58k