Childcare overhaul and parental leave top the wish list for leading female economists

Top female economists are pushing the federal government to overhaul paid parental leave, provide more affordable childcare and consider gender inequality for every new policy introduced in a bid to ensure women don’t lose out in the nation’s recovery from the coronavirus pandemic.

Encouraging men to take time off to look after their newborns by providing extra paid “use it or lose it” parental leave and changing the childcare subsidy to ensure it does not deter women from returning to full-time work are at the top of the federal budget wish lists of five economists interviewed by The Sydney Morning Herald/The Age. The budget will be released on May 11.

Paid parental leave has both health and economic benefits.

Prime Minister Scott Morrison previously indicated the upcoming budget would take issues affecting women more seriously and a reshuffle in March increased the number of women in cabinet from six to seven. This included a taskforce of female ministers to drive a new agenda on women’s equality, safety, economic security, health and wellbeing, following widespread anger about the treatment of women within Parliament and broader society.

Grattan Institute chief executive Danielle Wood said more affordable childcare is the “single budget measure that’s most important for women’s economic security and participation”. This could include boosting the base subsidy and making the taper rate less aggressive, as well as free care for subsequent children.

“Our estimates show each dollar invested in childcare will boost GDP by twice as much. A $5 billion investment will mean $11 billion in additional economic activity,” Ms Wood said. “It would help in closing the lifetime earning gap between men and women, which opens up significantly when children are born.

“It’s an important economic reform and should be pursued by the Coalition government,” she said. “Now they’ve elevated women’s economic issues it might be a focus.”

She also recommends providing six weeks’ parental leave for each parent on a “use it or lose it basis” in addition to 12 weeks shared between parents. Single parents would get the full 24 weeks.

“We know [from evidence overseas] the patterns of care in the first year goes on to shape how people share care later in life.”

RMIT University’s Leonora Risse said the government needs to aim to compensate women to help close gender wage gaps but also look at the bigger picture of what causes these issues in the first place.

To do this the federal government needs to change childcare and parental leave policies to ensure women aren’t financially disincentivised to work full-time while men are encouraged to provide more care, Dr Risse said. This includes providing more parental leave for both parents, which she said needs a change in business culture to normalise men taking parental leave, but also more funding for disability, childcare and aged care.

“Unpaid care is carried out largely by women. If they were freed up to contribute full time in the paid workforce it would generate returns for the economy,” she said.

“An impediment is that when the government looks at expanding [programs like childcare] they focus on the recurring expense and not as much on how it contributes to the economy.”

She also wants a gender lens on the budget, which would analyse each policy with both women and men’s outcomes in mind, saying fixing the issue required an ongoing focus.

Equity Economics’ Angela Jackson also wants a gender lens on the whole budget. She says there is “no single measure that alone will achieve gender equity”, but says childcare should be the top policy priority.

“It would unlock much-needed labour and skills resources from an economy and … there are clear economic benefits that can be demonstrated.”

She further wants extra domestic violence assistance and funding alongside assistance for older women, affected by inequity over their life and struggling financially.

”In the longer-term, paid parental leave in Australia would help bring the vision of an equal dynamic to life. Australia is lagging behind,” she said.

“We need to support both parents working and caring … It is a long road and there is no magic solution here.”

Committee for Economic Development Australia economist Gabriela D’Souza is “hopeful” the government would consider reducing out of pocket costs for childcare and put a gender lens on budget measures. “I think it is coming to the fore,” she said.

She also wants assistance for sectors hard-hit by the pandemic, including those that are female-dominated. “On the road to recovery we need to make sure we’re stimulating spending in sectors including arts and recreation and higher education.”

Bankwest Curtin Economics Centre deputy director Associate Professor Rebecca Cassells said women face significant barriers to earnings over their lifetime, which results in lower superannuation and more risk of poverty.

“Improving paid parental leave for men, making childcare more affordable and making sure that women and men are paid fairly are three key things we can do right now to improve women’s economic security,” she said.

This could include substantial paid parental leave for men, universal access to affordable early childhood education and care and requiring companies to audit and report on pay equality.

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