Centre for Future Work report finds affordable child care could boost economy by billions

Mums who want to go back to work full-time, say this is the radical change they must have if politicians want their vote.

An army of willing mums discouraged from working full-time by the cost of child care could boost the economy by up to $132 billion a year if it were more affordable, an exclusive report reveals.

The Australia Institute’s research found rolling out universal child care for one to four-year-olds would free up the equivalent of 850,000 new workers to address Australia’s labour shortage.

Mums want more affordable childcare so they can go back to work.

Economist and Director of the Centre for Future Work Jim Stanford said their research showed that affordable child care was not a “feel good policy”, but a “dollars and cents policy”.

“This is not about helping out parents a bit, it’s a prerequisite for the economy to function at its full potential,” Mr Stanford said.

The report called The Economic Aspects of ECEC in Australia, by economist Matt Grudnoff found that a Nordic-style high quality affordable childcare structure would cost the government an additional $21 billion a year, on top of the $7.5 billion it already spends.

Families currently contribute another $4.5 billion.

Economist and Director of the Centre for Future Work Jim Stanford. Picture: Supplied

Centre for Future Work economist Matt Grudnoff. Picture: Supplied

The report found it would pay for itself, as the government would collect an extra $48 billion in taxes every year.

It would also create 255,000 full time equivalent jobs in the sector.

However, an education spokesman questioned the report’s assumption that the number of Australians not in the labour force due to child care related reasons was far higher – perhaps even 10 times higher.

He said there was also no guarantee that increased government expenditure on early childhood education would lead to increases in women’s workforce participation.

The report also found that investing in only public and not-for-profit childcare would reap the biggest financial benefits, because profits from private centres were eaten up in dividends and executive pay packets.

Investing in public and not-for-profit childcare would reap the biggest financial benefits, the report found.

Currently around half of all providers were for-profit.

United Workers Union’s Director Early Education, Helen Gibbons, said a structural reform of the early learning sector was needed “to stop providers putting profits over children”.

Shadow Minister Early Childhood Education Amanda Rishworth said Labor’s long term goal was to review the childcare system and look at how to move to a universal system.

“This research supports what Labor has been saying,” she said.

“Early learning and care is an essential service now – just like Medicare.”

A spokesman for the acting Minister Education Stuart Robert said women’s workforce reached a record high of 62.4 per cent in February and the government would be spending almost $11 billion next year to help low and middle-income families with two or more children.

Shadow Minister Early Childhood Education Amanda Rishworth. Picture: NCA NewsWire Emma Braiser

Acting Education Minister Stuart Robert.

“Labor has a policy for cheaper child care for millionaires costing an additional $63 billion over the next decade on top of our current policies,” he said.

“It’s important to look at where Labor’s spending would go with millionaires set to benefit by up to $60,000 a year.”

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Originally published as Centre for Future Work report finds affordable child care could boost economy by billions