Childcare sector to get $5b boost in signature NSW budget policy
The NSW government’s signature budget policy will allow private childcare operators to be paid to expand or build new centres, creating an extra 47,000 places across the state and ensuring tens of thousands of women can return to the workforce.
The $5 billion package over 10 years will be the first time NSW has intervened in childcare, which until now has been run by the federal government through fee subsidies.
Treasurer Matt Kean (left) wants to put women at the centre of his first budget.Credit:Janie Barrett
However, a scarcity of childcare places has forced NSW to step in and meet the supply demands. There are currently 290,000 children enrolled in childcare in NSW, but many families live in so-called childcare deserts where there are as few as one place for every seven children.
Modelling provided to NSW Treasury shows that 568,700 NSW children (or 35.2 per cent) aged four and under live in a childcare desert.
Together with federal Labor’s planned increase to fee subsidies, NSW’s intervention will result in as many as 95,000 women entering the workforce or increasing the hours they work over the next decade.
Providing accessible and affordable childcare was the key recommendation from the government’s women’s expert economic panel, chaired by president of Chief Executive Women Sam Mostyn.
The overhaul to how childcare is funded and delivered in NSW was championed by Treasurer Matt Kean, who wants to put women at the centre of his first budget.
The policy, which will cost NSW $1 billion over the next four years, will also include $281 million to boost the childcare workforce, including $25,000 university scholarships for early childhood teachers to entice more people to consider a career in the sector.
To increase the number of childcare places, the state government will run a competitive tender process, where the private sector will bid to receive funding, which will be dependent on operators increasing the number of affordable places on offer to families. An independent expert will be appointed to guide the funding and identify the parts of the state with the most need.
The government’s investment will be made through a new Affordable and Accessible Childcare and Economic Participation fund, part of this month’s budget.
Modelling for the government shows that a middle-income Sydney family with one child in full-time childcare could save up to $3900 a year under the reforms because of the increased availability of affordable care.
NSW Premier Dominic Perrottet said accessing affordable childcare, especially in Sydney, was increasingly difficult.
“We know that childcare places are scarce in some postcodes, making it difficult for parents to return to paid work when they want. Improving accessibility to childcare by investing in supply will provide practical assistance to families with young ones,” Perrottet said.
“My government is focused on building a brighter future for our state by helping people pursue their hopes and aspirations. That is what this transformational policy will do.”
Kean said investment in childcare was the best way to improve women’s economic opportunity, increase female workforce participation and close the gender pay gap.
“Childcare costs impede the dreams of women across NSW because many women are only able to keep about 30 cents in each dollar they earn when they return to work,” Kean said.
“Childcare shouldn’t be a postcode lottery. Improving the affordability and accessibility of childcare is a once-in-a-generation economic policy.
“This investment, delivered alongside the Commonwealth’s childcare reforms, is expected to see up to 95,000 women enter the workforce or take on more hours, driving down the gender workforce participation gap by up to 14 per cent within a decade.”
The federal Labor government committed during the election campaign to lift the maximum childcare subsidy rate to 90 per cent for families for the first child in care and increase subsidy rates for every family with one child in care earning less than $530,000 in household income.
NSW Minister for Women Bronnie Taylor said the government’s investment would boost childcare supply, with a focus on increasing affordable childcare right across the state.
“This once-in-a-generation scheme will mean women no longer need to choose between work or caring for their children,” Taylor said. “This package will help break the childcare drought by targeting areas with the least access to affordable childcare, which poses the highest disincentive to parents returning to work.”
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