Higher full-time female workforce participation is an economic necessity, writes Sue Morphet, past president of Chief Executive Women. But it won’t happen without policies enabling more affordable and accessible early childhood education.
Australian women are the most educated in the world. But they are too often sidelined when it comes to paid work, and difficulties accessing affordable early childhood education is a big part of the problem.
With just days until the federal election, the conversation we need to have as a country is about maximising our productivity and participation.
As the leader of an organisation, you are always looking for the right talent and skilled workforce. As a nation, now more than ever, we need to be smart about harnessing our available talent and resources.
As one young woman recently told me on the realities off accessing childcare, with words that reflect the experiences of so many others:
“Our kids are at one of the well-known franchises in inner-city Sydney, with fees of $185 per day per child. Even with a 30% rebate, that’s $146 out of pocket. Imagine two kids at daycare four days a week – you’re looking at over $60,000 per annum out of pocket and after tax. I have seriously contemplated pulling back from four to three days a week of work to ease the financial burden. But can’t bring myself to damage my career. No high-profile projects are allocated to three day a week team members. You’re stuck between a rock and a hard place!’
Highly skilled, talented, capable women are Australia’s greatest untapped resource. But facing some of the highest costs for childcare in the world, and a subsidy system that creates powerful financial disincentive for parents to increase their hours or days of work – it is no wonder women feel they have limited choices.
Australian women’s full-time workforce participation has hardly changed in 40 years. More women may well be engaged in the workforce now, but do they have access to satisfying, well-paid work? The reality is too often women feel end up with few options but part time or casualised work, with insecure pay and little real choice about their career, progression or financial security.
Indeed, it is staggering that, as a nation, we have one of the biggest gaps between men and women’s average participation and hours in paid work in the OECD.
Too many families are struggling with the rising costs of early education, which we hear can account for anywhere between 10 to 25% of the family budget. Last year, it was reported that more than 90,000 Australian parents stayed out of the workforce completely because the cost of childcare was too high. And many, many more did not take up extra work that would have benefited families and the economy. We hear from workers in the care sector who say that insecure work and inadequate pay means they can’t book their children into regular care and take up extra shifts or hours.
We must make early childhood education and care accessible for all families. As a starting point, the Child Care Subsidy should be increased to 95% for all low-income families and the taper rate should be smoothed. We know that this investment makes economic sense and will pay dividends. Separate modelling by KPMG and The Grattan Institute has demonstrated that the boost it will deliver to our economy annually outweighs the spend, in increased participation and additional income tax.
We have a massive opportunity for our economy.
This change is good for women, families and business.
It will unlock an available, highly skilled and experienced workforce. It will give women greater career opportunities, and our children the best developmental start they need. Not to mention that it will also strengthen women’s financial security throughout their lifetimes. Research shows that women would be as much as $118,000 better off in retirement if subsidies were increased to make childcare more affordable.
We cannot afford to continue to squander the investment we make in educating young women. We are facing critical skill shortages. A recent report by Chief Executive Women and Impact Economics and Policy has shown that just halving the workforce participation gap between men and women would unlock the equivalent of 500,000 skilled fulltime workers.
Leaders across the business community, from CEW to BCA, together with academics, economists and peak bodies, support policy changes to enable women to move from part-time to full-time participation as they want to. To rebuild a flourishing economy that makes the most of our available talent – all our skilled, well-trained, and educated women – we must act now.