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Scott Morrison has admitted that the controversial $74 childcare subsidies per day is too low

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Wilson, Lauren
Publication Date: 
18 Mar 2015


Social services Minister Scott Morrison has conceded that a controversial recommendation to cap childcare subsidies at $74 a day could hurt working families and keep mums out of the workforce.

Mr Morrison, who is continuing to work on the federal government's new approach to childcare funding, has indicated the Productivity Commission's recommendation to cap taxpayer funded childcare subsidies at between $72 and $74, depending on the age of the child, could make childcare more expensive for cash-strapped working families.

"The Minister has been consulting widely on the benchmark price issue and is very conscious of the weakness of this approach which could see families disadvantaged," a spokeswoman for Mr Morrison said.

"Our goal is to improve the equation for families, especially those on low to middle incomes for whom this equation is the difference between deciding to go back to work or relying on welfare," the spokeswoman said.

Mr Morrison has previously said the government wants to introduce some price signal or cap on soaring childcare fees so taxpayers are not left subsidising gold-plated services which charge as much as $164 a day and offer baby Zumba classes.

Childcare providers are lobbying the federal government to set the new benchmark price at $100 a day, arguing that would cover about 90 per cent of services, while still sending a price signal to the top end of town.

Early Childhood Australia's chief executive Samantha Page said her organisation believes a single subsidy covering up to 90 per cent of the fees for low income families, and 30 per cent for those on higher incomes, would be a balanced approach.

"To take into account variability in costs and fees, we think that the government should also subsidise a proportion of the fee, up to $100 per day," Ms Page said.

"This ensures that very high cost services are not fully subsidised, while also maintaining access and affordability for families attending most services."

Australia's largest childcare provider, Goodstart Early Learning, also believes a national cap of between $100-110 a day would be an appropriate benchmark.

But Brendan McAssey, the owner of premium childcare service Only About Children, says the federal government would be better off keeping the Productivity Commission's recommended benchmark and then adding an extra ‘cost of living' payment which would vary in line with price fluctuations across cities and regional areas.

"In cities like Adelaide and Hobart, $74 a day is reasonable, and I think what they would do is drive prices at those centres up if there was a national cap, it would be inflationary," he said.

The Parenthood's Jo Briskey said the calculation of the benchmark price must reflect what parents are actually spending on care.

"No matter how it is calculated, the level of government help needs to reflect the real cost of childcare for a family - no matter where they live or how many children they have or what their ages are," she said.

Entered Date: 
25 Mar 2015
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