Hewsons View: Childcare a crucial piece of workforce puzzle

It was not really surprising that in a recent survey by the Institute of Company Directors of about 1,000 company directors – even with some 30 percent women – seeking to identify their major concerns for their businesses, only 1 percent identified childcare as an issue.

It was disturbing that these corporate high-flyers couldn’t recognize the fundamental significance of childcare to the future productivity of their workforces and, in turn, to the future profitability of their businesses.

Yet, if you were to survey the average family, most struggling to make ends meet, day-in-day-out, the cost and availability of childcare would rate as major concern. Childcare is a major element of their cost of living, and fundamental to the viability of a two-career/two-income family.

ADD IT UP: Pleas from ordinary families struggling with the cost of childcare fall on deaf ears in the corporate and political realms. Photo: Peter Braig.

ADD IT UP: Pleas from ordinary families struggling with the cost of childcare fall on deaf ears in the corporate and political realms. Photo: Peter Braig.

Of course, successive governments have had their run at childcare reform, but more often than not increases in government rebates, in the hope of controlling childcare costs, have only resulted in the private sector providers jacking up their fees, at least commensurately, and often compounding the already very high effective marginal tax rates that discourage a move into the workforce.

With the cost of living likely to be “a”, if not “the”, dominant issue at the coming State elections, and at the next Federal election, our political masters would be wise to thoroughly review the current childcare system, with a view to developing and implementing policies that will genuinely reduce costs and improve availability.

Unfortunately, with childcare, as with so many other key policies – such as budget repair or housing affordability – short-term, point-scoring politics has meant that the policy challenges have simply been kicked down the road, such that there are now no easy or quick solutions. It will now take much longer, and cost much more, to genuinely improve the situation.

In these terms, there is very little the governments can do to significantly improve the costs of living before the next elections – the budget will still be in disrepair, childcare and power prices will still be increasing, and housing will still be unaffordable.

Voter dissatisfaction with our politicians, the major political parties, indeed with the whole political system, is therefore most likely to be reflected at the ballot box as a further decline in support for the major parties, in favour of minor parties and independents.

To be clear, these will be protest votes – not in expectation that voters actually expect that these minor parties and independents will ever have to deliver what they promise, rather a desire that maybe, just maybe, this will shake things up.

One of the reasons governments are hesitant to respond decisively, and within a longer-term framework is, ironically, a fear of further voter backlash. So, governments have become very populous and opportunistic, seeking to pander to vested interests.

What is needed is a more overarching debate about some of these issues, within which narrow vested interests should be encouraged to take more of a national view.

For example, those corporate directors should be encouraged to think beyond their self-interest (wanting less government, tighter welfare, no penalty rates, lower taxes) to recognize the value of a fairly paid, genuinely motivated workforce, to which a well designed and appropriately funded childcare system is absolutely fundamental.

If they joined with and supported the mums and dads maybe, just maybe, our governments may listen and respond.

 – John Hewson