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The proposal from Federal Member for Mitchell, Alan Cadman, has been adopted by the House Of Representatives Standing Committee on Family and Human Services as part of its Inquiry into Balancing Work and Family.

 Alan Cadman's press release says:

The all-party committee of the House of Representatives made a number of recommendations for changes to the provision of childcare many of which expand the types of child care available for parents

Addition to Childcare Report re Recommendations 14 and 15:

 A crucial principle established in this report is that all parents should be able to claim some tax relief for sharing their incomes with their young dependent children. Greater emphasis and higher allowances should be given to children under the age of five, even though older children on balance "cost more", as parents can more easily manage their work/home responsibilities once children reach school age. 

The present Child Care Rebate is limited to $4000 for formal childcare. Childcare needs to be extended to as wide a range of services as possible. The Rebate currently limits the type of childcare. By providing support through the Family Tax Benefit, choices can be expanded and the options of using grandparents, relatives, in home care and other types of childcare become accessible.  

 An increase to the Family Tax Benefit (Part A) by $4700 for each child under five would give families the opportunity of choosing the type of childcare which best suits them, and significantly reduce effective marginal tax rates. No longer would it be a matter for the goodwill or generosity of the employer or the family making a decision to salary sacrifice.

Expensive childcare is not available to everybody, nor do all parents endorse the use of centre based care as the best means of caring for their young children. The registration of informal care will help reduce the prospect of abuse but continue to give parents choice. Once a real choice is available for parents then work participation and family satisfaction both increase. 

These changes would cost approximately $1.7 billion but with other options escalating in cost, together with the complex administration involved, it provides a realistic and practical alternative to some of the proposals put forward by those giving evidence to this committee. Under this proposal Recommendations 14 and 15 would become superfluous as families would have additional resources, by way of the Family Tax Benefit (Part A), to use on the child care of their choice. 

Cadman’s policy of subsidizing the child, not the centre, would be popular in the electorate. He says Labor is so dominated by inner-suburban two-income professionals that they would not adopt his policy even though it is what traditional working-class families need. He points out that six out of ten families with children under five do not use any form of formal child care, while another one out of four use formal child care for under l0 hours a week.  

Families on modest incomes fare worst of all under the present system - childcare is a luxury only the middle class can afford. Cadman says that by funding the child rather than the centre, all children are supported equally. His policy would give mothers realistic choices and more flexible home/work options. Treasurer Peter Costello has identified the ageing population as the most serious problem confronting the nation over the next 50 years, and Cadman says his policy may encourage families to have the additional child they want. If so, the Treasurer should not baulk at the 1.7 billion price tag.

 The full report can be read at:

 http://www.aph.gov.au/house/committee/fhs/workandfamily/index.htm