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Business says it needs help with childcare or it will lose workers.



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This transcript has been prepared by a source external to the Parliamentary Library.

 

It may not have been checked against the broadcast or in an y other way. Freedom from error, omissions or misunderstandings cannot be guaranteed.

 

For the purposes of quoting verbatim from a transcript, it is advisable to verify the transcript against the broadcast.

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PM

 

Wednesday 18 October 2006

Business says it needs help with childcare or it will lose workers

 

MARK COLVIN: The Business Council of Australia is usually among the driest of the economic dries , but it's given the thumbs up to a report which urges the Federal Government to spend millions more on helping workers look after their children and elderly relatives. 

 

An alliance of 40 companies calling itself, The Task Force on Care Costs, says the country's at risk of losing more than a million workers. 

 

It says those employees are considering leaving the workforce to care for their loved ones, because care costs are chewing up too much of their income. 

 

Sabra Lane reports. 

 

SABRA LANE: The Taskforce is a 'who's who' of big business, from Westpac and ANZ to respected legal firms, and even the Australian Stock Exchange. 

 

It says one of the biggest issues confronting business is a shortage of workers. 

 

Melinda Cilento is the chief economist at the Business Council of Australia. 

 

MELINDA CILENTO: The workforce participation issue is fundamental to Australia's economic prosperity over the next couple of decades. We already have unemployment at 30-year lows.  

 

We're seeing skilled shortages, and we know that demographic trends, namely population ageing, mean that Australia's labour supply is set to slow dramatically in the years ahead. 

 

SABRA LANE: Just how much was illustrated this morning, when the Federal Government received the taskforce's report. 

 

The Minister for Ageing Santo Santoro was told over the past couple of years, Australia's working population has increased by 170,000 workers a year. 

 

But by the year 2020, that will shrink to just 12,500 workers each year. 

 

Senator Santo Santoro: 

 

SANTO SANTORO: I think it's going to be an interesting report. I'll be looking at it very carefully and reading their findings and their recommendations. 

 

SABRA LANE: One recommendation is to dramatically increase childcare subsidies and carer costs to help businesses hang onto the workers who are in danger of quitting. 

 

The taskforce believes 1.25 million workers are at risk of pulling the plug now, because most of their wages are soaked up by care costs. 

 

Ilana Atlas is a group executive at Westpac. 

 

ILANA ATLAS: We found that one in four people are likely to leave the workforce because of the cost of care. We found that one in four people reduce their hours because of the cost of care, and about 35 per cent of workers with caring responsibilities would increase the hours they spend at work if they had further assistance with those costs.  

 

SABRA LANE: Instead of letting these workers go onto the welfare system, the taskforce says the Government could reimburse out-of-pocket care costs by up to 50 per cent - up to $10,000 every year. 

 

That would cost the Government $719 million a year. 

 

Ilana Atlas: 

 

ILANA ATLAS: Now the modelling has also said that it would return to the Government immediately about half that in additional revenue.  

 

And that does leave a shortfall of about half, which I think the taskforce has said would be extinguished over time through the secondary benefits that would come out of increased workforce participation. 

 

SABRA LANE: The Australian Business Council says it's a great idea, as it argues business is already doing enough. 

 

Melinda Cilento: 

 

MELINDA CILENTO: Business is coming to the party in terms of trying to establish more flexible working arrangements for people. That means part-time work, job-sharing, work-from-home opportunities.  

 

But the clear message from the taskforce on care costs is that individuals with caring responsibilities would like to work more, but they're finding the cost of care is prohibiting them from doing that. 

 

SABRA LANE: And the Taskforce has won support from an unlikely corner. The Federal Opposition says the report's recommendations are sensible, because most of the ideas are Labor Party policy. 

 

Opposition spokeswoman Tanya Plibersek: 

 

TANYA PLIBERSEK: I think it's a real shame that this sort of work has to be left to a coalition of private sector companies, and that the Government has really done no modelling on what the very high cost of care is doing to workforce participation.  

 

MARK COLVIN: Opposition spokeswoman Tanya Plibersek ending that report by Sabra Lane.