OPINION | Coalition regresses to the mean


Crispin Hull

Guest Columnist

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In the past week, the Coalition Government has slowly but inconsistently wound back the concessions it made in the face of the Covid-19 crisis. It said it would end free childcare but would continue tax concessions to business. This is the Coalition going back to its old tricks of helping well-off businesses while at the same time kicking the less fortunate in the guts. This is regression to the mean – in more ways than one.

Of course, women will suffer most from the Government’s early retreat from free childcare. Before free childcare, childcare was so costly that, coupled with tax, it was hardly worth women with children going out to work. The Mitchell Institute estimates that families affected are spending 27% of disposable income on childcare.

But the whole point of the Covid-19-driven free childcare was nothing to do with giving a break to working women. It was only ever about propping up childcare businesses. Once more people got back to work those businesses would no longer need as much help.

The Government’s mindset was exposed by Education Minister Dan Tehan when he explained the decision. He said, "What we have seen is demand grow and grow over the last few weeks so that we needed to change the system. This system was designed for when demand was falling. Now we are seeing demand increasing. . . . "

"Because of our success at flattening the curve, Australia is re-opening for business and that means an increase in demand for childcare places.”

See. The whole policy was only geared around the profitability of childcare businesses – the Coalition’s mates – not working women.

The announcement of the reasoning for the withdrawal of free childcare contrasts starkly with the soothing words of Prime Minister Scott Morrison when free childcare was first announced. He said then, "This virus is going to take enough from Australians without putting Australian parents in that position of having to choose between the economic wellbeing of their family or the care and support and education of their children."

Pah. Surely what he said then should still apply now. He was only interested in ensuring the childcare businesspeople did not lose their businesses, not that working women should get a break.

So now the demand for the childcare business has come back, working women have been thrown under a bus and have to go back to paying full freight for childcare, despite what Covid-19 has done to them. They now have to “choose between the economic wellbeing to their family and the care and support and education of their children”.

The discrimination and discouragement of working women has a long history. Unequal pay for equal work; glass ceilings; prohibitive childcare costs; unequal housework division; and so on. It was only in 1966 that women were no longer forced to resign their Public Service jobs when they got married.

There are very good reasons – Covid-19 or not – for childcare to be free. I will come back to that. But at the very least it should be tax deductible.

In July 1982 I reported on a hearing of the Taxation Board of Review. A woman employed by the CSIRO was challenging the disallowance of a claim for $993 in childcare costs.

These days, the Mitchell Institute, says childcare is costing the average family $6000 a year. That is as much as private primary-school fees. But there is no free public childcare for children under five, unlike free education for those over five. Moreover, even after children go to school, working mothers need before- and after-school care.

Childcare costs have become prohibitive for all but the most determined.

In the 1982 case, the arguments put by the working mother are just as or more compelling now as they were then.

She quite rightly pointed out that she could not possibly work to earn the income which was being taxed without putting her son in childcare.

She told the board, "The sole purpose of placing my child in care was to gain income. If I am to gain my income, I must work. If I am to work and maintain my child at the minimum level demanded by Australian society [as in she cannot leave the child unattended], I must incur child-care costs.”

The three-member ,all-male tribunal, however, sided with the tax commissioner who said that bringing up children was a private domestic concern. Rubbish.

Bear in mind, that in 1982, a big fat alcoholic lunch with clients and big flashy European cars were all tax deductible. Keating put paid to that but the business perks still go on as we have seen this week, while middle- and low-income earning families get slugged time and time again.

The taxation plight of women with young children has been a blight on basic fairness for half a century. And it has been a mindless abrogation of what government should do: initially help people so that after a while they can stand on their own feet.

This week’s experience tells us that business’s influence in the corridors of power remains compelling to political ears, especially Coalition ones. But young working mothers get no say in those corridors because they have no time or money to lobby. They have to cop it sweet.

It is simply an immoral, illogical outrage that a working woman cannot claim childcare as a tax deduction, especially while shareholders get a cash tax rebate on their dividends even if they have not earned an income. Labor should just announce tax deductibility for childcare as part of a total tax overhaul. The crossbench would follow and the Government would be wedged.

But childcare policy should go one step further. Childcare should be free. Governments in effect pay for at least 9-to-3.30 childcare for children over five through the education system. Why should that education system not equally apply to those children under five who research has shown benefit greatly through the social interaction of being with other children?

Ultimately free childcare would pay for itself in better adjusted children and more women entering or staying in the workforce longer and moving up the income scale sooner so they would pay more tax and gain greater self-reliance through superannuation.

It would help, of course, if the Coalition had or could attract more women who understood these problems. But while ever it behaves in the way it did this week that becomes less likely. It is a vicious circle.

Crispin Hull is a current columnist and the former Editor of the Canberra Times.

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