Boosting economic growth and family wellbeing with carefully targeted federal reform

Media Release

7 September 2020

Boosting economic growth and family wellbeing with carefully targeted federal reform

A new study by KPMG provides a simple blueprint for kickstarting the Australian economy and increasing economic security and educational opportunities for Australian families.

The Early Learning and Care Council of Australia (ELACCA) welcomes today’s report from KPMG, The child care subsidy: Options for increasing support for caregivers who want to work.

‘We see real merit in the KPMG proposal to lift the Child Care Subsidy (CCS) rate to 95 per cent for low income households, with the subsidy tapering down to a new higher minimum of 30 per cent for high income families,’ said ELACCA CEO Elizabeth Death.

‘At the moment, too many families – and particularly women – are finding their careers and income constrained by the unintended effects of the CCS system.  Many women have indicated that it’s simply not worth taking on extra days or shifts, because parents lose other government payments or find the net cost of additional early learning and care too high.’

The carefully targeted change to the CCS proposed by KPMG (Option 2) would generate an extraordinary dividend for the national economy. According to the modelling, the boost to GDP would exceed the additional federal spending by more than 110 percent, thanks to a boost in parental workforce participation.

‘Right now, many children are also potentially missing out on early learning and care because the subsidy system deters some families from enrolling their children, or from increasing their early learning days over time,’ Ms Death said.

‘The evidence tells us that children who have participated in early learning and care arrive at school far more prepared to engage and thrive. We should ensure this benefit is available to all children.

‘The policy architecture of Australia’s early learning and care system is essentially sound. The KPMG report shows that, with minor changes and limited additional investment, the government can achieve a huge win for families and the economy, at a time of real challenge for the nation.’

View and download KMPG full report here