Labor’s childcare subsidy obsession creates a new poor

But the Albanese government is too busy handing out childcare subsidies to notice.

All the government thinks families want is more childcare so more women can get into the workforce. Picture: Brad Fleet

What is going on in suburban Australia? While the government is talking a lot about the voice and defence, and the internet ether is full of crazy identity politics, the minds of most Australian families are rather more fixed on the price of meat, petrol and electricity.

However, despite these cost-of-living worries, something else is happening. Airports are crowded to the point of chaos. Even people with kids are travelling. Qantas is making money. In April alone there were 850,000 overseas departures. This is mostly short -term tourism – an increase of 130,000 over the previous month, and only 150,000 less than for pre-Covid travel for April. In other words, Australians have had almost as many overseas trips this year as the April before Covid struck. This doesn’t count domestic travel.

So, why is it that despite the pressures of rising cost of living, inflation at its highest for more than 30 years, interest rates going up 13 times, genuine fears of a recession and an increased number of employed people seeking help from charities, many people seem to be throwing caution to the winds and taking off? Perhaps Covid is the answer. Perhaps they simply want to get out, escape before things get even worse. Who can blame them?

But still, it is puzzling for someone like me, who has lived through a recession, that people are doing this, while at the same time the Smith Family is mentioning “cost of living” in their ads. What is more, we know it is affecting people’s political views. This past week The Australian reported that only 13 per cent of voters think Anthony Albanese is doing enough to address cost of living and only a quarter believe the economy is being managed well There is no doubt most people think things are going to get worse.

One thing that is becoming clear, Australian society is becoming more stratified. This is clear when we look at who is really being affected by cost-of-living pressures, and the inadequacy of the response of the government, which seems to think this is a temporary setback that is “fixable”.

People really affected by the cost of living come from both ends of the age and social spectrum. There are people on fixed incomes, especially pensioners and welfare recipients. These are the old poor – the poor who have always been with us. But a new poor are emerging. They are self-funded retired people, often criticised for their so-called privileged lives, actually spent working to give their children privileged lives. At the top of the list of the new poor are families on limited incomes, especially that seemingly rare thing nowadays, the single-income family; although single-income families have been poor for some time, it is just that nobody noticed.

The government has targeted its relief for energy prices to people on welfare through the social security system, a good thing. However, what is now being reported is that while charitable agencies are seeing an overall increase in people wanting help with groceries and energy, there has been a big increase from people who are employed. For example, the recent Senate Select Committee on the Cost of Living in Hobart chaired by shadow finance minister Jane Hume, heard that more and more Tasmanians were being forced to seek help from charities as inflation pushes up grocery costs causing greater food insecurity.

Anglicare Tasmania told the committee that with increasing energy prices, some vulnerable Tasmanians were having to make the choice between heating and eating, while the St Vincent de Paul Society told the Committee it was seeing a new demographic of people seeking assistance, with more employed people coming through its doors. Foodbank Tasmania said about 10.5 million meals were needed, and its partner agencies were seeking more meals than it could currently provide.

Senator Hume said: “We know high inflation is driving the cost-of-living crisis, but instead of coming up with a plan to lower inflation, Labor has spent an additional $187bn, which is only going to add fuel to an already out of control fire.”

Meanwhile all the government thinks families want is more childcare so more women can get into the workforce. Free or heavily subsidised childcare is all very well but huge childcare subsidies, which encourage providers to raise prices even more, just fuel inflation.

What if things get much worse, especially if there is a rise in unemployment? It is more likely people on incomes under $80,000 can’t find a second job. And forget all the propaganda about childcare being part of education. Childcare is child minding. The outrageous extension of subsidies to people earning up to $500,000 is simply a lure to get more professional and semi-professional women back to work – and paying more tax. Meanwhile at the poor, non-travelling end of the spectrum, single-income families, who do not have two tax-free thresholds and whose spouses are taxed as single people, are spending just the same on groceries and electricity, with no cheaper alternatives in sight. This situation will not improve by simply handing out childcare subsidies. It would be fairer and more sensible to target lower-income families with direct payments or to ameliorate income tax burden.