(Transcript from World News Radio)
The Productivity Commission wants the government to overhaul the way childcare assistance is delivered.
The government has released Commission's final report into the childcare system just weeks after Prime Minister Tony Abbott abandoned his controversial paid parental leave scheme.
Its recommendations include boosting subsidies for low to middle-income families with a means-tested sliding scale of support, including funding for nannies.
Amanda Cavill reports.
At the centre of the report is a recommendation to overhaul the subsidies system by scrapping the child-care benefit and the rebate and replace with it a single means-tested subsidy paid directly to child-care providers.
The subsidy would cover between 85 per cent of childcare costs for families with annual incomes at or below 60 thousand dollars, and 20 per cent for families earning 250 thousand dollars or above.
It would cover 100 hours of care per fortnight for children aged under 13 years who have parents who work or study at least 24 hours a fortnight.
The report says under the changes childcare is likely to be more affordable for families with incomes up to 130 thousand dollars.
Social Services Minister Scott Morrison says the Productivity Commission has made some important conclusions about how to help women stay in work and return to employment after having children.
"The recommendations are very broad. The recommendations say that there needs to be a very significant simplification of the process. It is very cumbersome. It is very hard to understand. We do need to make it simpler. We also need to push down on the cost pressures in the system. Under the previous government the costs of childcare went up by over 50 per cent."
The Commission's other recommendations include subsidies for accredited nannies and simplified working holiday visas to make it easier for families to employ au pairs for a full 12 months rather than the current six months.
It also suggested extra financial support to help childcare centres in rural, regional and remote areas stay open if child numbers temporarily fall.
The federal government has indicated the May budget will contain a major families package with a focus on child care.
Childcare subsidies cost taxpayers 5.7 billion dollars last financial year but the government wants to reshape the system and encourage women back into the workforce.
Prime Minister Tony Abbott says the the Commission's report gives the government a strong platform to work with.
"In a matter of weeks we will have a comprehensive response to that report we will have a new families package which will very much focus on childcare because we want to unlock the potential of our people. We want to give the families of Australia and the women of Australia a real choice and the work of the productivity commission certainly gives us a very strong foundation."
Any families package will have to pass though the Senate, which is still blocking around 28 billion dollars worth of the government's budget reforms from last year.
Australian Greens Senator Sarah Hanson Young says she supports the idea of a single childcare payment going directly to centres.
But she says the report does not address ways to cut long waiting lists for childcare places.
And she says and the government must increase the funding for childcare beyond the six billion dollars committed in last year's budget.
"If we are going to match affordability, quality and access we need more money. The government has to pledge more money. We can't be dealing with the struggles of families and getting good quality of care to our children if we don't find more money to put towards childcare. That's the bottom line. The government's got to come up with it somewhere."
Opposition leader Bill Shorten says Labor will keep an open mind about the recommendations.
But he says the Abbott government has cut a billion dollars worth of funding from the sector since it came to office.
"Labor will approach this report with a constructive view in mind. We're interested in affordability, we're interested in accessibility, we're interested in quality. We want to make sure that mums aren't going to and every hour they get paid aren't being eaten up in childcare bills."
The government says it will be consulting widely with the childcare sector in the next few weeks before responding formally to the Productivity Commission's report.
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