Childcare remains unaffordable for far too many Australian families

Childcare remains unaffordable for far too many Australian families

Every Australian child should have access to affordable, high-quality and accessible early learning and care regardless of their postcode, however the reality falls far short.

About 55 per cent of families from regional and rural Australia report difficulty with the cost of childcare in the past 12 months.

They are not alone. A new report into childcare affordability from Victoria University's Mitchell Institute has found that childcare is currently unaffordable for 386,000 Australian families.

Childcare is considered affordable if no more than 7 per cent of disposable income is spent on the service, but 39 per cent of families are spending more than that - some up to 15 per cent of their disposable income.

About 83 per cent of families using childcare spend more on childcare than utility bills or clothing for the whole family.

While families who earn less receive the biggest childcare subsidies, they are the group most likely to have unaffordable childcare costs.

The report also looks at the impact of the federal government's recent $1.7 billion childcare subsidy announcement, due to take effect in July next year.

These changes will help. But they still leave childcare unaffordable for about 336,000 families.

The changes aim to help families with two or more children in childcare and those on $189,390 per year.

The government says the new measures will impact 250,000 families, but our modelling shows childcare will become affordable for only about 50,000 more families.

The federal budget estimates 1.3 million families will use childcare in 2022-23.

This suggests childcare affordability will not improve for about one million families.

The economic and development benefits of childcare are significant.

For every $1 spent on childcare, $2 is returned to the economy.

Research shows making childcare affordable would inject an extra $11 billion into the Australian economy.

Unaffordable childcare often results in parents - usually women - deciding not to work, or working fewer hours than they would like.

Affordable childcare would deliver more workers for Australian businesses and provide more money for families to spend elsewhere in the economy.

The research shows quality, affordable early learning helps set children up for school and life, and it is children from the most disadvantaged backgrounds that gain the most benefits.

Childcare affordability impacts the entire economy, not just families and children. It is time to make it affordable for all families.

Peter Hurley is a policy fellow at the Mitchell Institute for Education and Health Policy, Victoria University.

This story Childcare remains unaffordable for far too many Australian families first appeared on The Canberra Times.