by Luke McCormack
If we keep on down the path of massively subsidised daycare, as in Labor’s proposal to boost childcare by $6 billion, we will arrive at a point, similar to Sweden, when no parent can afford (unless they’re rich) to be the carer of their own preschool toddler.
Yes, if you want to spend time with your 2-year-old in Sweden, you’d better volunteer to sweep the floors at your local daycare business!
And it will cost the country billions.
The childcare system is corporatising the most foundational phase of human life, and intergenerational transmission of culture, language and learning. We are letting capitalism feed off the most sensitive early years of parent-child bonding, learning and crucial language development.
And when it’s all over, dual-income daycare-dependent families and single-income parent-care families are both struggling with little disposable income left to get by. Why it is so difficult?
Parents are getting the wool pulled over their eyes, especially mothers
Politicians are using the language of ‘supporting women’ and helping mums ‘get back into the workforce’. But what does this really mean?
Are not parents who do their own childcare working too? Have either Anthony Albanese or Scott Morrison ever minded a 2-year-old child, while also managing school pick-up and drop-off, shopping, cooking, cleaning, caring for relatives and social events and volunteering for charitable causes?
Parents are working all right, whether paid or unpaid. So, it is time to stop using sleight-of-hand insults like ‘working families’ as a reference to those better citizens, the dual-income families, that are typically forced, by circumstance, to use daycare arrangements in order to gain a second income.
Wait, don’t some parents like using a bit of daycare even if the second wage is not so important?
Yes, they do. In fact, the numbers are interesting. While not an Australian survey (it’s from the UK), a 2009 study with a very large sample size (over 4,500) offers one of the best insights into parents’ preferences on balancing parenting in the early years, paid work and other unpaid home tasks.
It turns out that only one in ten mothers would prefer to always be in paid work, and not have to mind baby/toddler for those early years. Meanwhile, six in ten desired flexibility – a bit of both. Another three in ten would prefer to be full-time carers for that part of family life when nappies, and park plays and kindergarten trips are part of the daily routine. Further, if the partner is employed, and the couple has two children under 5 years, only 1 per cent of women polled thought the mother should be in some paid work.
The survey conclusion is that women want to be with their kids in the early years, many seeking flexibility, and very few women wish to prioritise paid work over caring for their 0-5-year-old children (see the survey infographic).
Yet, in Australia from the Rudd-Gillard-Rudd era onwards, including Abbott-Turnbull-Morrison, policy has only headed in one firm direction. It is as if the “1 in 10” careerists were writing family policy for everyone, but only to suit themselves.
The Australian Institute for Family Studies reported in 2013 (see table below) the reasons why parents were not in paid work. It shows that over 80 per cent of mothers when asked to explain why there are not in paid work answered, “Preference/too busy with family“. The answer remains over 80 per cent until the youngest is 5 years. After that, more than half of mothers still maintain this preference until the youngest is 11 years (leaving primary school).
Also noteworthy is that, for the first year of the new child’s life, 38 per cent of mothers had another child being breastfed or looked after at that time. The chief reason offered, from the child’s second birthday, for those looking for paid work was, “No jobs that are suitable/of interest/flexible”.
In other words, the target market for Labor’s expensive cash splash is already saturated. No matter how many more billions we pour into the honey-trap, we cannot move many more women, who currently prioritise family, to leave their toddlers in stranger-care (if they can find a vacancy), and go find a job (that isn’t lousy), and be happy to do it.
The Government Budget
The Morrison Government announced a Budget that manages the status quo with various covid19 relief measures, such as extending relaxations around the rules for certain family-related payments, for example, the Parental Leave Pay (PLP) work test and the Child Care Subsidy activity test. For the childcare industry, there has been a massive $1,900,000,000 cash handout to keep them afloat, followed by another $708,000,000 for the next stage of covid19. Plus another cash bonus for daycare businesses in Victoria, to the tune of $372,000,000.
The Government seems particularly proud of this. But why not fund the parents directly, or at least provide choice to parents about how to arrange care of their children?
Covid19 recovery: For individuals (not strictly a family policy) there are also income-tax offsets, passed with support from Labor, that will benefit most Australian families in the range of $600-$2,500 this financial year.
In summary, the Coalition is not doing much at all for families in particular, to ease the stress they are under.
Labor’s $6 billion childcare proposal
Let’s appreciate the enormous cost the Child Care Subsidy (CCS) is to taxpayers. Last year it cost approximately $8.3 billion, and it is growing.
Many assume this is OK because the income taxes of the parents and the GST they pay would more than cover the cost, right? Well, guess what? It doesn’t add up. So the more we use this system, the worse it gets.
But there is one thing that does add up: that’s right, the squiggly line! Neo-liberal economic adherents in Labor and the Coalition get excited when that squiggly GDP line goes up. I’m not sure why, as it doesn’t mean anything substantial, but people are known for having irrational obsessions.
Now Labor wants to pour another $6 billion into CCS by paying up to 90 per cent of fees for low-to-middle income families, and taking the cap of higher-income families altogether. Is this fair?
Liberal Senator Jane Hume said in reply to Labor’s proposal:
“If you move to a different model, if you move to make childcare universal and free, what you find is perverse outcomes … People overbook it, which makes the positions less accessible. By removing the cap, childcare providers cost shift … it’s a free for all.”
What about all the families that for one reason or another do not use daycare? Why are their tax dollars going to families that do? Don’t believe me? Try reading my simple case study from late 2019 comparing two similar families; it will blow your mind.
Labor’s proposal will manifestly outbid the child for their parents’ time and attention
There is already fierce competition for the devoted attention of the child’s parents as employers compete (against the child) for the mother’s attention, time and skills.
At this juncture, we would expect parents to make a reasonable decision considering extended family support, financial needs and other considerations. What actually happens is that the Government takes the side of business to increase the competitive bid for parents’ time and devotion.
This is a type of crony-capitalism, the merging of big business and big government. The child’s needs do not stand a chance in this competition.
Early childhood education?
Of course, the dishonesty that allows Australia to go along with all this, is that early use of daycare, even long hours over multiple days, is better for kids than mum/dad care. The truth is it depends on the quality of the care compared with what is happening at home. There is no blanket benefit.
Certainly, we all know deep down that sending a baby or young toddler to stranger-care for long hours is not ideal. Just ask a stressed-out toddler, or a daycare worker, “Would you send your kids here?” (No, don’t ask the daycare owners.) Or ask a paediatrician, or ask grown children what they would have preferred. Or read this research about 4.5-year-olds’ transition to kindy.
Large longitudinal studies done in the United States have shown, particularly for boys, increased externalising behaviours, among other issues, associated with hours spent in daycare centre settings.
How to help families de-stress
The most sensible reform that would cost far less than $6 billion would be to place more decision-making power in the hands of parents. It would also help resolve our woeful, troubling low birth rate.
“How?” you ask. Start by taxing families fairly.
At present, women are taxed as if their partner and children did not exist. This is ridiculous. A single male without any children pays the same income tax as a mother with three kids on the same income!
Furthermore, dual-income families enjoy two tax-free thresholds, making a single-income family even worse off.
One principle of taxation is not to tax two different situations as if they were the same. Even family-trust tax rules tax income only after it is distributed to family members.
One effective way of introducing fairer income tax – in a measured and controlled manner that would cost just $3 billion – would be to use an income-sharing model with a $30,000 limit for couples with one child under 18 years, increasing by $10,000 for each additional dependent child. In this model, a woman who gives up earning an income to mind young children can grab up to $30,000 of her partner’s income to claim as her own. Ideally, we would add superannuation here as well.
But at present the Government, in a very real sense, is stealing bread from the family table by taxing parents as if kids didn’t exist. (Read more here)
But what about Family Tax Benefit?
The only concession in the current policy for some families is a limited, capped and income-tested payment introduced under Prime Minister John Howard to help even things up a bit. Family Tax Benefit (FTB) part A treats all low and medium-income families reasonably well but not generously enough; higher-income earners miss out completely (but not from Child Care subsidies). In fact, if income-sharing (family-based tax) were introduced, much of FTB could be phased out.
Furthermore, some commentators mistakenly label it as a welfare payment. FTB was given its name for a reason: it’s a pseudo-tax break, not a welfare payment. “Welfare” is a term we use when helping someone who has encountered a disadvantage or difficult event such as illness, divorce, unemployment or disability.
Having children is something good that Australians should do a lot more of. In 2003, the government “statistics group” reported the average desired number of children per women is 2.3, yet Australians are having only 1.74 on average. In fact, for over 40 years we have not managed even a mere replacement birth rate. (Yes, we hide our little secret with high immigration levels.)
Why do we use taxpayer funds to offer some new mums $13,500 after having a baby, but only $500 to others in the Parental Leave Pay?
Why not, rather, make childcare subsidies more flexible by allowing parents to use the payment to pay an extended family member to help, like Grandma or Aunt Jo?
Join our campaign
Senator Hume was right. Heavy government subsidies distort the market, coerce vulnerable parents and do not recover their costs. Too much use of daycare in the early years has proven harms and, when used, should be used with respect and caution.
Aussie parents desire less stress, more time with their kids, more flexibility and fairer income tax. Children are beautiful, but the costs and effort in raising new citizens are intense! Why not reward parents and do so directly, so they can keep more of their income and rely less on government?
If we wish to “end the age of entitlement”, perhaps the Government should start back-tracking out of its very expensive and coercive subsidy policy, and offer a more neutral support for families. Allow parents to keep more of their own earned income because they are doing the heavy lifting of raising the next generation.