Tuesday, 10 September 2013

Add childcare to parental leave on family wishlist

A mini baby boom in Australia added to a continued high level of migration is putting pressure on families in the big cities. Since 2001 the birth rate has been increasing steadily, from 246,000 in 2001 to 302,000 in 2011 and while the net migration rate has dropped from its high in 2008-09, we still welcomed 170,300 people in 2010-11. In that year Sydney alone added over 50,000 migrants to its suburbs.

Low interest rates and an increase in the use of self-managed super funds to buy investment property has furthermore led to a seven percent rise in Sydney property prices this year, and the boom looks set to continue through spring and into summer. Demand continues to strongly outstrip supply. "Urban Taskforce chief executive Chris Johnson said the projections showed Sydney would need 100,000 more homes than planned in the next two decades," writes Leesha McKenny for the Sydney Morning Herald.

The image accompanying this blogpost shows Sydney council areas and their expected population growth to 2031. Note that some inner-urban and inner-suburban areas are dark-coloured, showing areas where the biggest population increases are expected over the period. Places like Canterbury and Ashfield, as well as places like Blacktown and Liverpool, are expected to grow in terms of resident households. For a young couple to afford a home in the former - in a suburb close to the CBD in Sydney - usually two incomes are needed but childcare costs often mean mothers are returning to the workforce after giving birth only to see their salaries sucked up by this single budget item alone. "The number of children using approved childcare has increased 20 per cent since 2008, yet the sector has failed to keep pace with demand," writes Cosima Mariner for the SMH. "The cost of childcare has risen at three times the rate of inflation, according to the Work and Family Policy Round Table, despite ballooning government subsidies which will top $22 billion over the next three years."

Kevin Rudd promised to do something about the acute shortage of childcare places but failed to deliver on his 2007 promise. As for housing affordability, local councils appear to be delivering the goods by approving infill construction of apartments in Sydney's inner suburban areas, but the fact remains that two incomes are needed for the most part for young couples wanting to buy a property there. A commitment to childcare would help not only to support the housing sector, it would also allow more women to work, hence lifting national productivity by a significant margin.

Given these realities, it seems that better childcare is a no-brainer for Tony Abbott if he's looking to do something useful for Australia's struggling young families. Sure, maternity leave and paternity leave are important but even more important is the longer-term security that childcare can provide to working families. Quality childcare would also be nice but I suspect that for many mothers any childcare is probably considered enough to aspire to.

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