Parents have welcomed Labor’s package of childcare funding, which will see $4.7 billion of additional subsidies and the extension of parental leave for around 1.26 million families across Australia.

The Federal Budget 2022-23 outlined changes to Paid Parental Leave, investing $532 million more and expanding new parents entitlement by an extra eight weeks to 26 weeks.

Professor Tim Harcourt, chief economist at UTS’ Institute for Public Policy and Governance, said Labor’s new policies will be “helping to boost workforce participation and productivity” levels of women in Australia.

The changes will be introduced through a staged approach from July 2023, where parental leave will increase by two weeks every year until July 2026.

The policy will also be made gender-neutral, meaning any parent can be the first to claim the parental leave. Previously, the system said the ‘birth mother’ had all primary leave duties except in extraordinary circumstances.

Mum-t0-be Lilly Walker couldn’t contain her excitement when she heard about the government’s decision to extend parental leave for new families.

“My partner and I have tried to plan how much leave we’ll take when the new bub arrives, but the news eased our worries,” she said.

The social worker, who is expecting her baby in early July, hopes the extra time will help her and her partner adapt into their new parental roles.

“I like that my husband will be there to help take care of the baby for the first few months,” she said. “We’ll be taking the first big steps as parents together.”

What the childcare subsidy is actually doing is putting women in a worse position, by incentivising them not to work.

Professor Marian Baird, a professor of Gender and Employment Relations at the University of Sydney, said the changes to the Paid Parental Scheme give couples extra time to work out when they will re-enter the workforce.

“It’ll give parents some certainty about how long they can stay out of work to look after their new infant,” she said.

“You can plan your career and your care responsibilities much better if you know you’ve got a bit more time and you know that time is going to be available.”

The new scheme will also raise the eligibility criteria for childcare subsidy rates to include couples who earn a combined income of $350,000 if they do not meet the individual income test of $157,647.

Marian Vidal-Fernandez, an associate professor of Economics at the University of Sydney, said the eligibility criteria will benefit Australian families in the lower income brackets.

“Even if you don’t have a cap [on the eligibility criteria], it will be a progressive support for those families who need extra funding,” she said.

However, Professor Vidal-Fernandez was also concerned the childcare subsidy rates could help prevent women from re-entering the workforce in a timely manner.

“What the childcare subsidy is actually doing is putting women in a worse position, by incentivising them not to work,” she said. “They could lose their skills, they have lower Supers and then are trapped in relationships they cannot get out of because they are financially dependent [on their partner].”

The package has also allocated $39 million to improve screening programs for newborns over four years and $12.4 million towards promoting playgroups and toy libraries for young children. An additional $13.9 million will be spent over three years to support grieving parents who have suffered a stillbirth.

Main image by Pexels/Yan Krukov.