Childcare the key to keeping women in small business

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has called on the government to extend “free childcare” beyond the original June 30 expiry date, describing it as an essential service for women in small businesses.

“Women make up more than a third of Australia’s small-business owners (35 per cent) and more than five million women work in these businesses,” Carnell said. “The latest ABS labour force data shows women have been hit hardest by the COVID-19 crisis, with the female workforce participation rate falling to 58.4 per cent in April.

“Many of the women who are still working and running their businesses are relying on JobKeeper payments, which will not cover childcare fees if they are reinstated in full from 1 July,” Carnell added. “This could force mothers out of their jobs, which is detrimental to working families and even worse for the economy.”

The Ombudsman pointed out that now is the time for the government to consider innovative ways to increase the participation of women, and that such initiatives would help ensure productivity gains and for the benefit of many businesses.

“There are a number of ways for government to do this, including making childcare tax-effective or by phasing in an expanded subsidy scheme as recommended by the Grattan Institute, estimated to deliver an $11 billion boost to the economy” Carnell said. “Economists have often referred to the ‘double dividend’ of childcare increasing workforce participation rates and providing early education.”

The Ombudsman has also suggested for the government to consider supporting childcare centres, many of which are small businesses and are suffering from losses due to the structure of the current measures.

“Despite the struggles some of these childcare centres have had with the current package, many are warning of dire consequences for their businesses if there is a sudden snap-back in a month’s time,” Carnell said. “Ultimately the government has a golden opportunity now to completely re-think the childcare system. Small business and the Australian economy depends on it.”

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