The Productivity Commission’s draft report on the sector, released last year, estimated that introducing a $10-a-day flat-fee model would increase federal government spending on childcare, which is currently about $13 billion a year, by $7.3 billion a year.
Hudson said that cost would be “more than offset” by other benefits. He also noted the full increase would not hit the budget bottom line until the reforms were totally implemented a decade from now.
A previous report by the centre found the federal government would gain between $2.9 billion and $3.2 billion in additional tax revenue and an annual GDP boost of up to $6.9 billion as parents worked more hours or returned to work thanks to universal and low-cost childcare.
Hudson said the knock-on effects and long-term savings from reduced health issues, lower crime rates and lower welfare costs would also be immense.
“It’s clear that this new system would have a net positive economic benefit to the nation,” he said.
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Georgie Dent, chief executive of parenting advocacy group The Parenthood, said the flat-fee proposal warranted genuine attention as the current system was complex and out-of-pocket costs were prohibitively high for many families.
She noted that Prime Minister Anthony Albanese had maintained he wanted the government’s legacy to be a universal early childhood education and care system.
“I do think that we have got an appetite for this reform that we haven’t previously had,” she said.
When asked last week about the prospect of moving to a flat-fee model for early childhood education and care, Treasurer Jim Chalmers said the government had been focused on extending access to subsidised care and had set aside funding for pay rises, but noted it had to think about the cost.
“I am personally, and the government is, enthusiastically supportive of the early childhood education and care sector,” he said.
“We’ve said that we’ve got an open mind to further changes in the future but recognising the fairly substantial fiscal constraints and fiscal pressures that we’ve got at the same time.”
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