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BCA calls on government to fix ‘broken’ childcare and paid parental leave systems

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The Business Council of Australia (BCA) is urging the Morrison government to use a portion of next month’s budget as an opportunity to increase female workforce participation by making childcare more flexible.

The BCA’s newly announced plan seeks to extend paid parental leave and increase childcare subsidies, which could collectively see the economy grow by an extra $5 billion per year.

Business Council chief executive Jennifer Westacott said the proposed changes would smooth out a system that often prevents women from picking up extra hours or realising their full potential in jobs.

“A women’s’ budget is not just about fixing the cultural problems we’ve seen writ large across society, it’s also an economic imperative,” Ms Westacott said in a statement on Monday.

“Our childcare and paid parental leave systems are a barrier to women who want to get back into work and they don’t work for modern families.”

“The current system encourages one parent, almost always mum, to take the lion’s share of time away from work.”

The Productivity Commission’s recent findings, which Ms Westacott referred to, reveal that more than 90,000 parents across Australia were out of a job in 2020 as a result of the high costs of childcare: 26,800 in NSW, followed by 20,700 in Victoria and 17,900 in Queensland.


Also read: Breaking gender stereotypes: 4 key strategies women need to negotiate higher salary


The BCA’s proposed plan

Ms Westcott explained that the BCA’s proposed plan aims to get more women working while providing them with ample workplace opportunities “without being punished by high child care costs.”

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“We’re proposing changes to smooth the sharp financial cliffs in the system which discourage people from picking up extra hours or realising their full potential in their careers,” she said.

Under the new system, the childcare subsidy would be lifted from 85 to 95 per cent for lower income families, with payments dropping at one percentage point for every $4000 in additional income over $80,000.

Another change would allow families to decide on how many weeks of paid leave each parent takes (a maximum of 18 for one parent), while those who share more evenly would be rewarded with up to two extra weeks each.

“Families should be able to make the decisions about who takes time off to care for kids without filling out hours of paperwork,” Ms Westacott said.

“Under our scheme, families would get to choose how they divide their leave based on what works best for them.

“By tackling these issues, we can get people back into the workforce, give families choices and build on our momentum down the path to recovery.”


Also read: Australian Women still feel less entitled in the workplace: LinkedIn Survey


Ms Westacott emphasised that for every dollar invested into childcare, an estimated $2 would go back into the economy.

“KPMG estimates that the cost of our child care plan would be around $2.5 billion but it would deliver a boost to the economy of around $4 to $5 billion,” she said.


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Dahlia Jovic
Dahlia is a Junior Editor and Journalist at Dynamic Business. She is an Honours student in Media and Communications at the University of Sydney with a specialisation in Digital Cultures. Her areas of interest include business, technology, entertainment and videography.