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Economy Government Development

$1.7 billion investment for child care to be added in by the Government

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To cut the cost of living for families and boost workforce participation, the Government adds in a $1.7 billion investment in child care subsidies as part of the 2021-22 Budget.  

Treasurer Josh Frydenberg said the investment adds on the $10.3 billion that was already invested in childcare this year.  

“These changes strengthen our economy and at the same time provide greater choice to parents who want to work an extra day or two a week,” Treasurer Frydenberg said.  

“This is a targeted and proportionate investment that simultaneously makes childcare more affordable, increases workforce participation and boosts the Australian economy by up to $1.5 billion per year.”  

The investment will add up to 300,000 hours of work per week, allowing over 40,000 individuals to work an extra day per week and boost the level of GDP by up to $1.5 billion per year.  

The changes in childcare will deliberately target low-and-middle-income earners, with around half the families set to benefit from having a household income under $130,000.  

The investment will also lower the structural disincentive to take on an additional day or two of work for many families. With it, families who choose to work more days will benefit more than what the current system allows.  

Aside from this, the level of child care subsidies will be tapered so the families that earn the least receive the most. These subsidies will apply at the same rate per child in a family no matter how many of their children are in childcare.  

Minister for Education and Youth Alan Tudge said the measures would further ease the cost of childcare and encourage workforce participation, particularly for larger families.  

As part of the 2021-22 Budget, and starting on 1 July 2022 the Government will:  

  • Increase the child care subsidies available to families with more than one child aged five and under in childcare, benefitting around 250,000 families  
  • Remove the $10,560 cap on the Child Care Subsidy, benefitting around 18,000 families  

For those families with more than one child in childcare, the level of subsidy received will increase by 30 per cent to a maximum subsidy of 95 per cent of fees paid for their second and subsequent children. This ensures half of the families will receive a 95 per cent subsidy for their second and subsequent children.  

The current measures done by the Morrison Government builds on the 2018 Child Care Package which has kept out-of-pocket childcare costs low for Australian families.  

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