Millionaire parents with full time nannies stand to get $10,000 or more from the Coalition’s proposed new childcare rebate while 50% of working families with children in family day care will receive less than $300 a year.

ACTU President Sharan Burrow said today:

“John Howard’s new childcare tax rebate is a poorly targeted election bribe that is available to all parents regardless of their income and will deliver a huge benefit to the well-off at the expense of the majority of working families.

Millionaire parents who can afford a full-time nanny that qualifies for in-home childcare benefits and carries out domestic chores including cleaning and ironing and shopping stand to gain more than $200 a week in tax relief under the Coalition’s childcare rebate proposal.

At the same time the majority of families with children in family day care or a child care centre will get as little as $6 a week extra.

John Howard is creating a ‘nanny state’ based on welfare for the well-off. The childcare tax rebate is a treat for Toorak and a windfall for Woollahra.

This is a terrible waste of taxpayer funds that will put pressure on the Budget and is likely to be unsustainable in the longer term.

Simple economics dictates that the new rebate will also lead to big increases in childcare fees – especially by the private childcare providers – as the market adjusts to a 30% effective rise in the capacity of parents to pay.

The Coalition’s policy does nothing to help working families who are currently unable to find childcare with not one extra childcare place being created by this policy. It also does nothing to help with the high upfront costs of childcare as parents will have to wait 12 months to get a tax refund.

A recent ACTU survey has found that childcare is a major barrier to parents taking on work with 44% of respondents stating a shortage of places prevents them from working more hours. The survey also found evidence of very long waiting lists with 44% of people on waiting lists unable to get a childcare place within 12 months.

The Coalition’s policy does nothing to fix the deep-seated problems in the childcare industry such as the need for more investment in non-profit centres, better quality of care standards and higher wages for childcare workers so that staff turnover is reduced and the childcare workforce crisis can be fixed.”

In-home nanny
(ACTU cost estimate)

Long day care – total 370,000 children in care

Family day care – total 96,000 children in care

Nanny – full time wages
$34,560 p.a.

Median gap fee per child
$1,824 p.a. (based on ABS)

Median gap fee per child
$1,008 p.a. (based on ABS)

Childcare tax rebate (30%)
$10,368 p.a.

Childcare tax rebate (30%)
$547 p.a.

Childcare tax rebate (30%)
$302 p.a.

More Information

What is registered care? – according to the Australian Government Family Assistance Office they can be grandparents, relatives, friends or nannies who are registered with the Family Assistance Office.

No Childcare Means No Work For Young Families: National Survey – a national shortage of childcare places is causing widespread problems among working families with 44% of parents responding that they are prevented from working according to a survey conducted by the ACTU and childcare unions.