Action area: Child care

The Government wants families to have choice when they are making decisions about child care and work.

There are many factors that affect women’s decisions to work including that women still bear a higher proportion of responsibility for raising children.

These factors are complex and affect individual women and their families differently.

Women’s preference to care for their children themselves, their own and others’ values and expectations, financial priorities and their share of unpaid work all interact in their decision making.1

While the workforce participation rate of women with children is increasing, the participation rate for mothers is still below that of fathers and is strongly related to the age of their youngest child.

Young men and women (15–24 years old) start out on a similar footing, but the workforce participation gap increases dramatically when women have children. The participation rate of mothers aged 25 to 54 years with children aged under 15 years old remains below that of women in the same age group without children. By contrast, having children has either no impact or increases workforce participation for men.


Sources: Women: ABS (2016), Labour Force, Australia: Labour Force Status and Other Characteristics of Families, June 2016, cat. no. 6224.0.55.001. Men: ABS (2017), Labour Force, Australia, Detailed - Electronic Delivery cat. no. 6291.0.55.001, Feb 2017, three month average of original data, centred for June 2016.

Workforce participation rates by age and gender. Women with dependent children: 15-19 years, 29.4%. 20-24 years, 45.2%. 25-35 years, 60.8%. 35-44 years, 74.5%. 45-54 years, 75.6%. 55-64 years, 52.1%. 65 years and over, 10.7%. Women with no dependent children: 15-19 years, 69.8%. 20-24 years, 85.1%. 25-35 years, 88.8%. 35-44, 85.1%. 45-54 years, 81.3%. 55-64 years, 57.1%. 65 years and over, 10.7%. Males: 15-19 years, 51.1%. 20-24 years, 81.6%. 25-35 years, 91.3%. 35-44 years, 91.2%. 45-54 years, 87.5%. 55-64 years, 72.0%. 65 years and over, 16.9%.

Access to child care places and financial assistance with child care costs were two of the top three incentives to increase labour force participation in 2014–15, with over half of all women considering these issues to be ‘very important’.2

It is clear that more quality, affordable accessible and flexible child care will give more mothers greater opportunity to enter into or remain in the workforce, if they choose to do so — which is why the Government has made the most significant reforms to the system in 40 years.


Source: ABS, 6239.0 - Barriers and Incentives to Labour Force Participation, Australia, July 2014 to June 2015

1 in 3 women said that caring for children stopped them from starting a job or working more hours.

Where are we?

The Government's investment

The Government is investing around $37 billion on child care support to help ease cost of living pressures for families balancing work and parenting responsibilities, including those that need before and after school care for their children.

It is estimated that the Government’s new child care system will encourage more than 230,000 families to increase their involvement in workforce participation while also supporting early learning opportunities for children3.

The centrepiece of the new child care system, the Child Care Subsidy, will provide lower income families an 85 per cent rate of subsidy. This means that a family earning $60,000, whose child care centre charges $100 per day, will only pay around $15 per day for child care.

The reforms also abolish the current $7,500 Child Care Rebate cap to ensure parents on family incomes of around $185,000 or less (in 2017 terms) are not limited by a cap on the amount of child care they can access per year per child. Families earning more than around $185,000 will benefit from an increased annual cap of around $10,000 per year per child.

More than 1.2 million children attended approved child care during the 2016 September quarter, up 1.5 per cent on the previous September quarter. In the same quarter there were around 18,000 approved child care services operating across Australia — an increase of 2.2 per cent on the previous year.4

Population growth will also play a key role in driving future demand for child care. The Productivity Commission estimates that just over 100,000 additional full-time formal early childhood education and care places will be needed by 2026.5 The largest category of growth is estimated to be out-of-school hours and vacation care with population growth expected to lead to a 30 per cent increase in need for these services in 15 years.6

Key actions 2017-18

  • Implement the Government’s new child care system including through the investment of $37 billion on child care support to ease the cost of living pressures for families balancing work and parenting responsibilities.
  • Engage with families and child care services to ensure that they understand how reforms will affect them, and ensure that women can reap the full benefits of the changes. The Family Child Care Subsidy Estimator is an online tool which will help families plan for the changes that will take effect in July 2018 by calculating their entitlement to the new Child Care Subsidy.
  • In addition to the Government’s increased investment into child care, the Australian Government has announced $428 million to extend the National Partnership Agreement on Universal Access to Early Childhood Education for the 2018 school year so that children in the earliest years have access to a quality preschool education in the year before they begin school.
  • Improve coordination of multiple programs to help families and providers work out what assistance is available to them through the new ICT system.
  1. ABS, Barriers and Incentives to Labour Force Participation, Australia, July 2014 to June 2015, cat no. 6239.0
  2. ABS, Barriers and Incentives to Labour Force Participation, Australia, July 2014 to June 2015, cat no. 6239.0
  3. Department of Education (2017) Correspondence 10 April 2017.
  4. Department of Education and Training (2017), Early Childhood and Child Care in Summary September Quarter 2016 https://docs.education.gov.au/node/43466 [accessed1 June 2017]
  5. Productivity Commission Inquiry Report (2014) Childcare and Early Childhood Learning http://www.pc.gov.au/inquiries/completed/childcare/report/childcare-volume1.pdf [accessed 18 April 2017]
  6. Productivity Commission Inquiry Report (2014) Childcare and Early Childhood Learning http://www.pc.gov.au/inquiries/completed/childcare/report/childcare-volume1.pdf [accessed 18 April 2017]