There is “no doubt” the Government’s decision to turn off the free childcare tap is costing the survival of many small businesses.
Small Business Ombudsman Kate Carnell said increasing female participation in the workforce would be critical to Australia’s recovery from the economic crisis induced by COVID-19.
“The Government must implement innovative ways to increase female participation rates,” she said.
“What could we do to do that? Make childcare tax affective, we could phase in extending subsidy schemes, there’s a range of things that could be done.”
The Federal Government in April announced childcare would be completely free to all parents, while paying a portion of the operating cost of childcare centres.
But as demand for services picked back up, the Government revealed it would be rolling back the support earlier than anticipated and parents would need to start paying childcare fees from July 13.
Ms Carnell said reinstating the childcare costs while many parents were still struggling would mean a loss of jobs, and many having to close down their small businesses.
“For those that are living on JobKeeper or on significantly reduced income they simply can’t afford the reinstated childcare fees and that could force parents — many of whom are mums — out of their jobs,” she said.
“That’s detrimental to their business and even worse for the economy. In my view, childcare is an essential service for parents in small business and it needs to be affordable.”
With free childcare turned off, Ms Carnell said there wasn’t “any doubt” more small businesses would fold than if it had remained available.
The West Australian reported last month parents were being forced to choose between groceries and childcare as the Government announced the end of the free childcare scheme.
For low-income families who earned less than $60,000, the portion of those who said childcare impacted how much food they bought was 64 per cent.
Ms Carnell said there was a “double dividend” for childcare investment.
“You get a double dividend for childcare, you increase workplace participation rates and you achieve much needed early education and you deliver job growth,” she said.
She also urged for reform to the awards system to help Australian mums and dads running their own business navigate overly-complex rules and regulations.
“Simplify it – introduce a Small Business Award,” she said.
She also urged for more Government contracts, which were worth $64 billion dollars in 2018 alone, to be awarded to small businesses.
“The Government should be giving as much business as possible to small to medium businesses, Australian businesses,” she said.
“If you want them to employ here, to create jobs and the economy going, let’s give them business. That is the quickest and simplest way to go.
“We should only give work to big businesses when the SME sector can’t do it.”