Productivity Commission review: Well-off families should pay more for childcare as nannies get the nod

WELL-OFF families would lose some taxpayer support for childcare under changes to the system that would also extend subsidies to nannies.

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WEALTHY families would lose some taxpayer support for childcare under a simplified means-tested system that would also extend subsidies to nannies.

The Productivity Commission’s long-awaited final report into childcare affordability, released on Friday, recommends boosting subsidies to low- and middle-income families with a single payment that is means-tested on a sliding scale.

Families on $60,000 or less would receive 85 per cent of childcare costs while those on incomes of $250,000 and above would receive just a 20 per cent subsidy.

It would cover 100 hours of care per fortnight for children aged under 13 years who have parents who work or study at least 24 hours a fortnight.

The report says under the changes childcare is likely to be more affordable for families with incomes up to $130,000.

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The Productivity Commission’s report into childcare affordability recommends boosting subsidies to low- and middle-income families.

Social Services Minister Scott Morrison said scores of families were frustrated because the childcare system was difficult to navigate and inflexible.

While he isn’t yet saying which recommendations the government will adopt, he’s made it clear he’s keen for assistance to be simpler and better targeted.

“For middle and low income families, in particular, the decision to go back to work is not a choice, but a necessity,” he said in a statement.

He is also open to the idea of government support for nannies. “I certainly think we have to look at that how we can support it,” he told ABC radio on Friday.

“The commission’s recommendations are based on a relatively budget neutral position and to go well beyond what is there would obviously require offsets and savings.” Labor frontbencher Mark Butler said the government should reverse the $1 billion cut it “ripped out” of childcare in last year’s budget.

Australian Greens deputy leader Adam Bandt supports the idea of a single childcare payment going directly to centres.

The Productivity Commission’s report into childcare affordability recommends boosting subsidies to low- and middle-income families.

Mr Bandt said the report did not address ways to cut long waiting lists for childcare places.

He has concerns about nanny subsidies because of quality control reasons.

Early Childhood Australia chief executive Samantha Page said nannies would benefit parents who worked shift work.

“I think we need to be careful about how we introduce nannies into a subsidised system,” she told ABC radio.

“I think there is a place for them.” However, she didn’t want nannies to be subsidised to the extent that they were seen as an alternative to quality preschool programs.

United Voice childcare workers union says the only way to fix the childcare crisis is to invest the entirety of the now-scrapped $5.5 billion paid parental leave scheme into quality long day care. “Parents should be no worse off by these changes,” national secretary David O’Byrne said.

The Productivity Commission’s report into childcare affordability recommends boosting subsidies to low- and middle-income families.

KEY RECOMMENDATIONS

*A means-tested subsidy rate between 85 per cent for family incomes at or below $60,000 and 20 per cent for family incomes at or above $250,000 * Subsidies for accredited nannies

*Combine childcare rebate, childcare benefit, and jobs education and training child care fee assistance, into a single subsidy known as early care and learning subsidy

*Simplified working holiday visas to make it easier for families to employ au pairs for a full 12 months rather than the current six months

*Extra financial support to childcare centres in rural, regional and remote areas to stay open if child numbers temporarily fall

*Link payment of family tax benefit part A to attendance in preschool programs * 100 per cent subsidy for children deemed at risk.