Childcare subsidy system fails working mothers

Australia's shambolic childcare subsidy system is the reason why up to 20 per cent fewer mothers work in Australia than overseas, according to a report last week by the House of Representatives committee on work and family balance. The report attacks a tax system that allows mobile phones, cars and laptops to be salary sacrificed but doesn't recognise childcare expenses as a necessary work related cost. Aegis Consulting has a model, based on an annual family income of $80,000 with two children in care, which show that a working mother's tax and childcare bill could be cut by up to $8,000 if she were allowed to salary sacrifice her out-of-pocket childcare cost after receiving childcare benefit. In response the Prime Minister claims that childcare costs are already close to fully tax deductible under his 30 per cent rebate system, but a 30 per cent rebate that turns up 18 months after childcare bills are paid, is just too late.

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