Is a $9000 direct cash payment better than childcare? |
We may be living in a hyper-partisan environment where everything is endlessly debated, but if there is one topic where we need more argument - not less - it is childcare policy.
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Over the past decade across Coalition and Labor governments, childcare has become way more expensive for taxpayers and no cheaper for parents, while there is no clear evidence of improved outcomes for children, and also parents overwhelmingly aren't happy with the available options.
Yet somehow only recently both sides of politics want to change course: while the Albanese government considers a universal childcare policy to limit the cost for parents, the opposition is looking into more flexible choice options. The prospect of an election debate about substantive differences in childcare policy is welcome and overdue.
And changes can't come quickly enough. Childcare fees are rising much faster than inflation and wages. The latest Productivity Commission figures show the median weekly cost increased by 32 per cent in real terms between 2016 and 2025.
Subsidies have also ballooned. Canberra's recurrent expenditure on childcare reached $16.2 billion in 2025, and total federal and state government spending reached $20.4 billion, almost $13,000 per child in formal childcare - a 57 per cent per-child real increase from 2016.
Childcare policy is at war with itself. Subsidies keep rising, but so do costly regulations, leaving parents no better off.
In response to safety concerns following some horrific cases in childcare centres, inevitably safety regulations will increase. We should consider if the non-safety-related regulations could possibly be reduced, to help offset the added cost to parents and taxpayers of increasing safety compliance, especially if we go down the path of universal childcare.
Both the ACCC and the NSW Productivity Commission have argued that increasing subsidies reduces parents' out-of-pocket expenses only in the short-term; requiring more........