Published by the 50/50 by 2030 Foundation, University of Canberra

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How investing in the care sector can save the economy

by | Oct 19, 2020 | Budget, Feature

Pandemics affect men and women differently. COVID-19 has magnified our existing, entrenched and systemic inequalities, disproportionately impacting those in part-time and casual work (largely women), those who work in hospitality and retail (largely women) and those with unpaid caring duties (almost all women).

New modelling for the National Foundation for Australian Women has found that boosting the pay and conditions for workers in childcare, aged care and disability care – among the lowest paid yet most essential sectors in the economy – would not only create more jobs for women but have a dramatic multiplier impact on the economy through increased workforce participation.

Helen Hodgson, NFAW’s chair of the Social Policy Committee, said the recent federal budget had focused on investing heavily in physical infrastructure in male-dominated industries such as construction as its primary instrument for economic stimulus.

Similar government investment in the care sector “would deliver similar economic stimulus, with women the main beneficiaries”.

However, the new modelling revealed that similar government investment in the care sector “would deliver similar economic stimulus, with women the main beneficiaries”.

The modelling, which was conducted by Janine Dixon from Victoria University’s Centre of Policy Studies, showed that more than 900,000 people who currently provide unpaid care – to young children, the elderly or disabled – reported wanting to have more hours in paid employment but were unable to access it because of their caring commitments.

Dr Dixon’s modelling found that if the government provided the additional funding necessary to enable these workers – mainly women – to work an extra 10 hours a week it would stimulate the entire economy to such a degree that the increased government expenditure would be almost entirely offset through increased revenue from taxes on higher incomes and greater consumption.

The modelling estimated that by 2030, GDP would be 1.64% higher than it otherwise would be and that the additional cost to government – estimated at $19bn – would be reduced to $3bn as a result of the additional revenues from increased income taxes.

Instead, it was all about jobs and tax cuts for men, due to its focus on construction, energy, transport and manufacturing.

Professor Hodgson said the government had promised in the lead up to the October 6 federal budget that it would be “all about jobs”. Instead, it was all about jobs and tax cuts for men, due to its focus on construction, energy, transport and manufacturing. In total, those four sectors received $27bn of the $98bn total expenditure. Programs targeted specifically for women under the Women’s Economic Security Statement totalled $240m over four years – or $6m a year.

“The care sector was completely overlooked,” Professor Hodgson said, noting that in the years prior to COVID-19 it has been the care and education sectors that had experienced the strongest employment growth.

The modelling was released as part of the NFAW’s extensive annual response to the federal budget.

It integrates the analysis of 36 subject matter specialists, including, health, education, housing, social services, taxation and employment.

It details the myriad gendered implications stemming from the 2020 budget, including the lack of any specific measures for older unemployed people, the majority of which are women, that fact that two-thirds of apprentices are men, that the major beneficiaries of income tax cuts will be people earning more than $120,000pm (again, mainly men) and the fact that a third of all women retire with zero superannuation.

Trish Bergin, co-director of the 50/50 by 2030 Foundation, said the government’s tin ear towards gender blindness and the implications for policy and budgeting was a likely a result of the lack of women in positions of power and influence.

“There are too few women at the decision-making table,” Ms Bergin said. “For starters, there were no women on the Expenditure Review Committee until the Prime Minister added Senator Anne Ruston to the five-person super-committee in June this year, and there were few women on the original COVID planning group.”

Another, equally troubling issue, is that the government does not put its proposed policy measures under the scrutiny of a gender lens.

“There are not enough women influencing policy direction and, maybe as a result of that, there is an apparent inability to analyse policy through a gender lens. The government has left itself blind to the flow-on impacts of the budget to 51% of the population,” Ms Bergin said.

Professor Hodgson said the only real criticism of the 2020 budget had been around its gender blindness. Age-old issues such as care work not being seen as ‘productive work’ and the undervaluing of female-dominated sectors, the importance of affordable and available high-quality childcare, the impact of unpaid care, particularly on the economically vulnerable, been overlooked. Yet these issues were possibly the door to providing the greatest economic impact.

“If you pay people properly and put money into the systems that need it, there will be a major economic boost from that,” she said.

 

 

 

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