Australia is failing working moms, and this failure needs to be addressed by politicians in the upcoming elections.
New findings from a study conducted by the Australian National University, commissioned by child care provider Goodstart Early Learning, reveal that child care costs are having a significant impact on a working mother’s finances, with two-thirds of her gross earnings being lost on tax and child care alone. And women on lower wages are the most affected.
According to the ANU Centre for Social Research and Methods, a woman with an average income would earn $22.39 an hour for the first day of her work, but as the week went on and her child care costs accumulated, her average hourly income would drop to $13.83 and, by the last day of the week, settle at just $5.08.
Researcher Ben Phillips elaborated on the findings, saying, “We found for a low-income case, where a woman was earning only around $43,000 per year, when you include her husband’s wage, you’ll also find she’s going backwards financially on the fifth day.
“What drives that is, you’ve got, say, child care costs of around $9 an hour or around, say, $90 a day. She’s paying tax at around 32 cents in the dollar for around $43,000 a year — she’s losing family payments.
“So she’s actually losing money by turning up for work.”
Child care in Australia is overly expensive and is still set to rise for almost 100,000 families during the election campaign because of a federal government freeze on subsidies, The Australian reports.
Goodstart spokesman John Cherry said that 1 in 10 families would end up depleting its rebates in the next financial year.
“Government assistance has not been keeping up with the cost of child care, and as a result, families’ out-of-pocket costs have been rising even faster,” he explained. “Goodstart’s data shows that not only are more families hitting the cap, but they are hitting the cap earlier in the year, leaving them without any subsidy for longer.”
And these high costs could result in a career setback for many parents.
Many mothers are no longer able to afford the high cost of child care, and it could prevent them from going back to work. A difficult decision for parents, as, in recent years, for many families it has become imperative to have two incomes to alleviate their financial burdens due to increased living costs, but it’s one that will also have a significant effect on the economy because it could dissuade moms from working and therefore paying tax.
In addition to this, a study from Harvard Business School, which included Australian figures, revealed that children of working mothers thrive: Daughters are better educated and earn more, according to an extensive study, while sons of working mothers are more aware of child care needs and domestic chores.
Yes, the workforce needs these mothers, but what’s going to be done to ensure they’re able to keep working?
It’s clear that reliable, affordable child care needs to become a priority, and Jo Brisley, executive director of advocacy group The Parenthood, is calling for more accessible early learning care.
“Our politicians keep telling us that they are committed to jobs and growing our economy, but where is the evidence of that?” said Ms Brisley. “When half of the potential workforce is held back by the prohibitive cost of child care, reforms should be on top of the election agenda.”
Let’s hope these reforms will be on top of the election agenda ahead of the July 2016 elections.