Better care services can boost the economy, but they have to be paid for

The challenges facing Australia’s care sector were a major theme of the federal election campaign.

The coalition government kicked off its primary campaign in the March budget by increasing support for families with two or more children in childcare and an additional $468 million to improve the quality and safety of elder care. Treasurer Josh Frydenberg used his budget speech to promise that the NDIS would “always be fully funded by the coalition”.

Care services were a key element of Labor’s election campaign with promises to make childcare cheaper, improve care for the elderly and ‘protect’ the NDIS. However, Labor Party leader Anthony Albanese stumbled last week when asked to outline his party’s six-point plan to return the NDIS “to its original vision”.

The Herald’s David Crowe points out that childcare has become the largest single spending measure in the ALP campaign, with a $5.4 billion pledge to increase subsidies for 96 percent of families.

Labor has described its early childhood education and care policy as “fundamental economic reform”. This signals an important shift in the way care services are positioned in the budget and governance debate. Childcare supports productivity by enabling parents, especially women, to work. But decades of expensive childcare have prevented many women from doing as much paid work as they would like.

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There is a wealth of international and Australian research showing the benefits of quality early childhood education and care, particularly for people from low-income families. It improves school readiness, academic achievement, and even employment outcomes.

Care services should be viewed as an essential economic infrastructure underpinning both national prosperity and community well-being.

The care sector is also an increasingly important source of employment for Australians. The National Skills Commission’s employment projections for the five years to 2025 showed that health and social care will account for one in seven of all new jobs created over that period, more than double that of construction or financial services.

While the pre-election focus on Australia’s care systems is positive, the proposed policies and solutions will likely not be enough to address the challenges the sector is facing.