Boosting female workforce participation for a $5 billion economic boost

26 April 2021

Australia could grow the economy by $5 billion, make it easier for women to get back into work and give families more control over how they raise their kids by fixing the broken child care and paid parental leave systems.

With Australia’s population growing at its slowest rate since World War I it is critical we lift female participation and make the most of our homegrown talent, the Business Council chief executive Jennifer Westacott said.

“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.

“More than 90,000 people across Australia said they weren’t in the workforce last year mainly because of the high cost of child care, according to the Productivity Commission.”

A state by state breakdown shows in New South Wales it was 26,800 people, Victoria it was 20,700, Queensland it was 17,900, Western Australia it was 13,800, South Australia it was 6,500, Tasmania it was 2,800, the Australian Capital Territory it was 1,200 and in the Northern Territory it was 1,100 people.

“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, Ms Westacott said.

“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.

“These changes aren’t just about giving women a chance to get back to work. This proposal means people can work to their full potential and advance in their chosen fields without being punished by high child care costs when they get even a modest pay rise.

“For every dollar we invest in child care, we’ll get $2 back. 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.

“On paid parental leave, we’re proposing a more flexible system that would encourage both parents to take more equal caring responsibilities and get the ball rolling on cultural change.

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

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

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

“We estimate the cost of transforming the paid parental leave system, helping create cultural change and letting families make their own decisions, would be around $1 billion a year.  

“To put this in context, over the last 12 months we’ve spent $150 billion on nation saving measures like JobKeeper to keep the economy afloat, for less than one percent of that we can drive the country forward. 

“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.”


The Business Council plan to let women get back into work:

 Fix the broken child care subsidy system

 The child care subsidy would grow from 85 per cent to 95 per cent for lower income households.

  • Starting for families earning $80,000 the subsidy would taper off at one percentage point for every $4,000 in additional family income.
  • For example, a family earning $80,000 will receive a 95 per cent subsidy, a family earning $84,000 will receive a 94 per cent subsidy.

Make paid parental leave work for modern families

Parents currently get 20 weeks of paid leave from the government divided between the primary carer, almost always mum, who gets 18 weeks and a secondary carer who gets 2 weeks.

  • We’re proposing a more flexible system.
  • Under our proposal, families would decide how many weeks each parent takes up to a maximum of 18 for one parent.
  • Those who share more evenly would be rewarded with an additional one or two weeks each of funded leave.
  • We’d grow the total available weeks up to 26 weeks through a gradual process.


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