RumpledElf

Childcare getting more expensive

64 posts in this topic

real world example...

In your situation with three kids it is very near impossible without family close buy to raise kids with duel incomes even with our 50% child care rebates. If these were removed of course it is not feasable.

The trouble with the private primary school option, and I know they do take them young in some parts now, like 3 or 4 years old, but this is not typically long day care hours, i.e. 7:00AM to 6:00PM. Clearly I do not condone leaving your kids in care for these sort of hours every day but it is good to know the flexibility is there if you need it.

Society needs some subsidies for it to function for the greater good. I know this will sound selfish as I have kids so it really is just feathering my own nest so to speak, but I certianly would look at how many women / men would leave the workforce if these rebates were removed before removing them. I suspect this is the primary reason for such a subsidy.

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The consensus seems to be, you have kids you deal with them, not our problem.

I think this would be OK if parents actually still opted to put their kids through childcare and work, but if they choose not to, and many will we will have a dramatically reduced GDP.

The idea of child care rebates is no different to primitive societies sending some women out to do the gathering while others looked after the children. It benifits your society as a whole the more people who are in the workforce. The government is looking for ways to get more

The often stated premises that kids equal a a higher GDP, kids benefit society and full participation of women in the workforce is desired, are IMO all highly questionable. :huh:

This positive effect of kids on economic growth may hold true if you assume the need of Ponzi population growth as requirement.

However equally one could argue that kids increase the burden on the environment etc. and certainly above the replacement rate may be a negative for society.

see e.g. this article

Although I welcome the contribution of woman in the workforce, I wonder if nowadays this is not more a financial obligation due to e.g. RE prices.

I wonder if not more women would like to have the choice to stay at home.

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...I wonder if not more women would like to have the choice to stay at home.

Screw them, I will happily quit work and stay at home!

Of course the obvious comeback to that is "what would you do". Amongst the males I work and drink with (only time I have that particular kind of conversation) as soon as I lay out my retire as soon as possible plan everyone asks that question.

Some would say it is just because I hang out with bastards that want to destroy every dream I have, after all, they hang out with me and so are likely to be of a similar personality type ;)

But I think truth is a bit more interesting.

Most of the guys I know define themselves either through their family or their job. There are other components of course but the 2 dominant ones are those two.

Without the job (I have no family in the traditional sense) they can all see very easily that I would potentially lose a certain sense of myself. Which I ahve to agree is a distinct possibility, after all your job is an easy way to measure yourself. That's why people always ask what do you do. It is an easy way for them to measure you as well.

I don't know a lot of females very well but isn't the idea of them preferring to be out of the work force kind of demeaning? Like assuming they couldn't measure themselves in the same way?

Gotta go, it is an idea I have played with though.

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I don't know a lot of females very well but isn't the idea of them preferring to be out of the work force kind of demeaning? Like assuming they couldn't measure themselves in the same way?

My remarks were no way meant to be demeaning. It just stated that some women might want to have the choice to stay with their kids.

Maybe I should have stated the choice of 'one of the parents' to stay home without monetary problems.

I know of families were the man staid home as their wife earned more / enough and they had the option to get by on one income.

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Just thought of another reason for subsidised childcare, labour mobility.

While we do not use a lot of childcare anyway, just 1 day a week for 1 kid, people like me who move around as a family unit, would think twice if they were moving away from say grandparents who otherwise look after the kids. I am sure many stay in Sydney for example, when they possibly would move for better opportunity elsewhere if there was support for looking after the kids.

I am sure there are other economic returns on this subsidy as well?

But then back to the OP, the idea that one person cannot look after 5 kids anymore sort of defeats the purpose. We have just made childcare workers, 20% less productive in one swoop. How stupid is that?

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My remarks were no way meant to be demeaning. It just stated that some women might want to have the choice to stay with their kids.

Maybe I should have stated the choice of 'one of the parents' to stay home without monetary problems.

I know of families were the man staid home as their wife earned more / enough and they had the option to get by on one income.

I assumed as much, just an idea that popped into my head as I read your post.

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Just thought of another reason for subsidised childcare, labour mobility.

While we do not use a lot of childcare anyway, just 1 day a week for 1 kid, people like me who move around as a family unit, would think twice if they were moving away from say grandparents who otherwise look after the kids. I am sure many stay in Sydney for example, when they possibly would move for better opportunity elsewhere if there was support for looking after the kids.

But does higher mobility imply better? Is 100% mobility the ultimate nirvana?

Anyway, I disagree that using tax revenue to fund childcare has any economic advantage. If there are large amounts of families living in Sydney, for example, that don't want to leave the grandparents, then the better opportunity elsewhere is not actually better. The people looking for labour will have to increase the wages to entice people away, thus solving the mobility problem.

One can argue a social advantage, but I don't buy that there are economic advantages.

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If there are large amounts of families living in Sydney, for example, that don't want to leave the grandparents, then the better opportunity elsewhere is not actually better.

Sydney strikes me as being so big and so expensive you actually have very low odds of living somewhere close to grandparents in the first place, unless you have them physically in a granny flat out back. Even in Adelaide I'd be very restricted in my choice of suburbs if I wanted to utilise babysitting grandies and not have to drive for an hour either way to get there.

Mind you if all the grandies bought enormous 6 bedroom houses and shared them with the kids like some ethnicities do, it'd work ...

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Sydney is turning into a city state. I can see my friend's house from my place. It takes me 30 minutes to drive there. I don't go out anymore. I couldn't be stuffed to deal with the traffic and pay for the privilege of stepping outside of my own home via tolls and parking fees.

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But does higher mobility imply better? Is 100% mobility the ultimate nirvana?

Anyway, I disagree that using tax revenue to fund childcare has any economic advantage. If there are large amounts of families living in Sydney, for example, that don't want to leave the grandparents, then the better opportunity elsewhere is not actually better. The people looking for labour will have to increase the wages to entice people away, thus solving the mobility problem.

One can argue a social advantage, but I don't buy that there are economic advantages.

Of course economies are not a closed system but lets look at a two tribe example:

OK tribe 1 call it team gibber blot, consists of 20 people. Say 10 are having children, 5 couples. Would you have 5 of them stay in to look after the children because the other members of the tribe thinks there is no benifit in having them work? OR is it better that none have children and all 20 work?

Team 2 sends 9 out of the 10 couples having children out to work and one person stays home looking after the other 5 couples children. In affect you have 19 out of 20 working. How does this not greatly increase tribe 2's productive capacity over tribe 1?

You may recall in Australia we have been searching for ways to get both older Australians and mothers back into the workforce. If it takes the hand of government to get them into the workforce then this to me is no different to a tribes decision for the greater good to share berries among the people who stay home looking after the children.

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Of course economies are not a closed system but lets look at a two tribe example:

OK tribe 1 call it team gibber blot, consists of 20 people. Say 10 are having children, 5 couples. Would you have 5 of them stay in to look after the children because the other members of the tribe thinks there is no benifit in having them work? OR is it better that none have children and all 20 work?

Team 2 sends 9 out of the 10 couples having children out to work and one person stays home looking after the other 5 couples children. In affect you have 19 out of 20 working. How does this not greatly increase tribe 2's productive capacity over tribe 1?

You may recall in Australia we have been searching for ways to get both older Australians and mothers back into the workforce. If it takes the hand of government to get them into the workforce then this to me is no different to a tribes decision for the greater good to share berries among the people who stay home looking after the children.

Is either team doing better by ensuring that the incompetent work?

The CEO was bitching about the general incompetence he runs into all the time the other day, I said it was because the government want low unemployment.

If we were to take your tribe example and say instead "each tribe needs X amount of work done, team gibber uses 10 people to do it and team 2 uses 19" then we have a completely different measure and instead start looking at whether team gibber will win in a couple of decades because they obviously have people that are more competent.

I would probably prefer to live in team gibber in this scenario. If team gibber could somehow convince the 2 people that suck the most to bugger off to team 2 (guaranteed employment) even better. If team gibber can also manage to convince the best two workers from team 2 to migrate across (higher wages) even better.

End result team gibber still has 50% unemployment but the same GDP. Team 2 has 5% unemployment but a lot of those people are actively hampering the productivity of the people actually doing the work. I see a good future for team gibber.

This is actually the underlying basis of my 3 man company theory which is basically that no company should be allowed more than 3 staff. Everything requiring more than 3 people can be done with partnerships and sub contracting. 3 man companies can't afford a single seat warmer.

Of course the three man company theory makes more money in an environment full of 100 man companies as there is so much food the 100 can't even take a chance on going for because of the overhead of their 20 or 30 seat warmers. A country full of 3 man companies would be much more fierce in competition.

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You may recall in Australia we have been searching for ways to get both older Australians and mothers back into the workforce. If it takes the hand of government to get them into the workforce then this to me is no different to a tribes decision for the greater good to share berries among the people who stay home looking after the children.

I like your example, but if this truly worked, why wouldn't we do that with everyone and eliminate unemployment all together? Instead of giving families rebates for childcare, why don't we give employers money to create new jobs for people? In the tribe example, if 2 people are unemployed, we can take the fruit of all of the 18 other people, give some of it to 2 workers to employ helpers. Does this increase the productive capacity of the tribe?

The answer is that it does not always. If this worked, governments would of course eliminate unemployment. They want to stay in power, after all. The worth of employing the two idle tribesmen depends on the value that the they bring.

Similarly, the employment of mothers/fathers who would otherwise stay at home only improves the economy if what they produce is worth as much as the cost. So, if a new mother decides to return to her job of $50k and gets a $10K per annum rebate (I've no idea how much the rebate is btw), then the rebate is worth it if the mother is worth $60K of production. As a group, we are paying $60K for her services. Now, as a group (the market), we have already decided that she is NOT worth $60K, otherwise, she would have already been paid this. So, the childcare rebate is essentially the government forcing us to pay more for labour than what it is worth.

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I like your example, but if this truly worked, why wouldn't we do that with everyone and eliminate unemployment all together? Instead of giving families rebates for childcare, why don't we give employers money to create new jobs for people? In the tribe example, if 2 people are unemployed, we can take the fruit of all of the 18 other people, give some of it to 2 workers to employ helpers. Does this increase the productive capacity of the tribe?

The answer is that it does not always. If this worked, governments would of course eliminate unemployment. They want to stay in power, after all. The worth of employing the two idle tribesmen depends on the value that the they bring.

Similarly, the employment of mothers/fathers who would otherwise stay at home only improves the economy if what they produce is worth as much as the cost. So, if a new mother decides to return to her job of $50k and gets a $10K per annum rebate (I've no idea how much the rebate is btw), then the rebate is worth it if the mother is worth $60K of production. As a group, we are paying $60K for her services. Now, as a group (the market), we have already decided that she is NOT worth $60K, otherwise, she would have already been paid this. So, the childcare rebate is essentially the government forcing us to pay more for labour than what it is worth.

I agree with the top part, that yes the hand of government can get it wrong particularly where it tries to micro manage anyhing. It may well be better that while the 19 were available for work, it is not mandatory that they all work. If no one wants to pay them then so be it they cannot get the tax rebate, so should sit at home and look after there children.

The last paragraph however assumes that a company will pay her against someone else suitably qualified if she costs 10k more. This is going down the same road as saying what about a handicapped person? They produce nothing if no company will provide ramps etc for them. Whereas if the government chips in say 10k per mobility challenged individual we have one more productive member of the community. Not many companies will do it without the government stepping in, so I think it should. Same for mums and dads, they will not work and no one will pay the extra unless the gov chips in. There is a productive benifit to it. I agree though at some point the costs will outweigh the benifits and I wonder if the government has any handle on this.

They are now about to make teh childcare worker 20% less productive and chapioning it as a safety improvement so I suspect they have no idea what affect their actions have...

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The last paragraph however assumes that a company will pay her against someone else suitably qualified if she costs 10k more. This is going down the same road as saying what about a handicapped person? They produce nothing if no company will provide ramps etc for them. Whereas if the government chips in say 10k per mobility challenged individual we have one more productive member of the community. Not many companies will do it without the government stepping in, so I think it should. Same for mums and dads, they will not work and no one will pay the extra unless the gov chips in. There is a productive benifit to it. I agree though at some point the costs will outweigh the benifits and I wonder if the government has any handle on this.

Wheelchair access is not an economic decision either -- it's a social one. It is recognising that most disabled people are able to contribute the same as the rest of us, and should be given the same opportunities. You are entirely correct that anyone who is concerned only with the bottom line will hire a non-disabled worker first, because it will not cost them to install ramps. This is why the government steps in. They require that companies have wheelchair access anyway, so the decision to hire a disabled or non-disabled worker is not based on the extra cost providing disabled access.

They are now about to make teh childcare worker 20% less productive and chapioning it as a safety improvement so I suspect they have no idea what affect their actions have...

Again, I agree entirely. It is a stupid law made by meddling politicians. Their actions will have the immediate effect that you already pointed out: making the workers LESS productive, but it will also certainly have an effect on the labour force as it becomes more expensive for parents.

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This is actually the underlying basis of my 3 man company theory which is basically that no company should be allowed more than 3 staff. Everything requiring more than 3 people can be done with partnerships and sub contracting. 3 man companies can't afford a single seat warmer.

Of course the three man company theory makes more money in an environment full of 100 man companies as there is so much food the 100 can't even take a chance on going for because of the overhead of their 20 or 30 seat warmers. A country full of 3 man companies would be much more fierce in competition.

Interesting, I have never thought into it but agree, I always end up leaning on a couple of my staff. At the moment with a 4 person staff, one is definitely the outsider.

I wonder if this is just the natural order of things? Perhaps over 3 and it changes to a different environment where people rely on prodding to get going?

Of course though there are some things a 3 person company cannot do, but as you say it is about playing to your strengths and realising what it is a 100 person company cannot do, and that usually revolves around agility and the smaller jobs. A big company will literally scoff at a 3 million jobs in construction, and yet these are a decent job for a 4 or 5 staff business. On top of this of course you have site personnel but I assume these would be considered in direct production akin to a PC in DBL'ing so not really part of your 3 man count?

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Wheelchair access is not an economic decision either -- it's a social one. It is recognising that most disabled people are able to contribute the same as the rest of us, and should be given the same opportunities. You are entirely correct that anyone who is concerned only with the bottom line will hire a non-disabled worker first, because it will not cost them to install ramps. This is why the government steps in. They require that companies have wheelchair access anyway, so the decision to hire a disabled or non-disabled worker is not based on the extra cost providing disabled access.

Sorry, I know it appeared I was playing the empathy card on you, but no I was thinking in a hard economic sence just for the exercise, though of course agree for the disabled there is a social element to it also.

Looking just at the hard productive advantage of having a large proportion of your population either in work or actively seeking employment, you can see one of the greatest challenges for Australia moving forward is having enough people in the workforce v our ageing population. Even if some of the people on the periphery require government subsidies to get them in the workforce, it still adds to our working population and hence GDP, and hence taxation revenue. I guess you have to ask the question does the 50% rebate on childcare either come back to government in increased taxation, PAYG and company tax, or does only part of it come back? Of course then as you point out there is the social question also. Except in modern society individuals and businesses cannot be expected to take social issues into account and hence it is the role of government to do this, possibly I would argue for the greater economic good.

I guess the mum and dad issue is not a fairness one as they chose to have kids in the first instance, but I still think there are economic benifits to a larger workforce participation rate (clearly thats true) but I suppose it must be weighed up against the costs of the measure?

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you can see one of the greatest challenges for Australia moving forward is having enough people in the workforce v our ageing population

The ageing population needs to be told to reduce its luxurious lifestyle.

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Ultimately our aging population will end up working longer, they have already put in place changes to raise it to 67 for both men and women by 2023 http://www.centrelink.gov.au/internet/internet.nsf/payments/age_eligible.htm the biggest change there raising the female retirement age to match males. I wouldn't be surprised to see that raised to 70 by mid century, in fact I expect it for myself.

I think this is entirely reasonable to ask that we work a few more years before being entitled to the pension, given that our life expectancy has risen by about 20 years since the pension was first introduced.

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I guess the mum and dad issue is not a fairness one as they chose to have kids in the first instance, but I still think there are economic benifits to a larger workforce participation rate (clearly thats true) but I suppose it must be weighed up against the costs of the measure?

Essentially, this is my argument. When you give someone a rebate to childcare of $X, you are just increasing their wage by $X to make it worth their while to enter back into the workforce. I would say that they are not worth the extra $X to the workforce, otherwise we (the consumer) would pay them that already (there will of course be exceptions to the rule). But the $X is also paid by the consumer, via tax. So, in other words, the productive capacity of that person is not contributing back as much as they cost, as judged by the people that buy their product/service. This makes it a bad move, economically.

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The ageing population needs to be told to reduce its luxurious lifestyle.

WTF does that mean?

Aged pensioners I know live like paupers, barely getting by, the aged pension is welfare nothing more.

The oldies that I know are swinging it are fully self funded (their own money) or on govt super/pension schemes (eg 35-40 years govt or military service) and are 'paid for' along the way. In 2020 I will be mid 50s and will be jetsetting like James friggin Bond. If you want to live like a pauper its your choice don't impose it on others.

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WTF does that mean?

Aged pensioners I know live like paupers, barely getting by, the aged pension is welfare nothing more.

The oldies that I know are swinging it are fully self funded (their own money) or on govt super/pension schemes (eg 35-40 years govt or military service) and are 'paid for' along the way. In 2020 I will be mid 50s and will be jetsetting like James friggin Bond. If you want to live like a pauper its your choice don't impose it on others.

I think its an impression younger people have TP.

They see older people enjoying the fruits of their labours and wonder why they shouldn't be able to do the same.

Unfortunately because of the disparity of time, they haven't been privy to the hours and the labour put in by older people, so that they could get to that level of lifestyle.

I have said this in other places, but I think this is a part of the problem that now confronts the western world.

The younger generations don't want to live in the 1 - 2 bedroom cottages and work their way up to a 3 - 4 bedroom home.

They want the new car as soon as they start work, instead of driving around in the bomb, and keeping it going is what keeps you occupied at the week-end.

They want to start at the pointy end of the wage scale, and have the high-flying lifestyle.

My wife speaks about nurses coming out of university who want to sit behind the desk and operate the computer, instead of handling the pans, or cleaning up soiled linen.

I've generalised I know, and I know that there are exceptions, but my own children often give me the best evidence of my own thinking.

I've tried to get them to accept that when we built our first home it didn't have and floorcoverings or curtains. We used a set of sheets from my mum.

It wasn't painted and there were no doors on the kitchen cabinets (to save money).

I put in all the screens myself.

We had a wringer washing machine and a basic stove and fridge. We did get enough money from our wedding to purchase a chest freezer.

The only luxury we enjoyed was a 34cm TV from my bachelor days. We had that TV for 3 years before buying the bigger set.

My first lawn mower I bought at a dump shop and fixed it up.

Until the kids came we had a double bed mattress on the floor.

Firstly I wanted to comment by saying we had to wait for many things.

I'm not saying its wrong the way the younger generation want to do it, but simply to say that there are other ways.

Secondly to suggest that many of the older people are simply enjoying the fruits of their labours. That Riviera, jet-setting lifestyle has come at quite a cost for some.

My own father and mother never had a holiday (ie; travel away from the farm) for over 20 years.

Even when dad finally retired, he only took one around Australia trip. He couldn't understand holidays. All that trouble to live out of suitcases and sleep in uncomfortable beds!!

Two of my daughters however, have taken overseas trips as soon as they finished uni. Took out loans to do it!!

Against my advice, I might add.

Maybe my own generation are to blame for how the younger perceive the world.

I really wish I knew.

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Well said Sol.

The well set I refer to were generally on the govt schemes (they couldn't interfere in asset allocation). For example, a fella who started of as a private conscript in Vietnam and retired a LTCOL after 40 years on a pension of 70Kish indexed; A Tinpusher retiring on similar money with similar Public Sector Super after 37 years etc etc. Pilots that started pre-jet when Qantas was govt owned etc.

I've done the mattress on floor, 10yo rusty falcon, dilapidated hand-me-down fridge and fuzzy portable TV thing. Winding back to 25years ago, to borrow money for sh*t like that was just not happening (except maybe a car) and frowned upon (particularly by bank managers). No guilt from me.

If the young want it now and resent the Prewar folk, BBs and Xers for working up from zero and getting it...too bad, no sympathy, no empathy either - everyone started with nowt and saved and worked, no don't pay for 24months bullsh*t, holidays on credit, must own a home with zero savings etc etc.

Its a mirage.

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The younger generation sees in clear writing the entire social system is bound to destruct just as when we want to make use of its benefits. Why shouldn't we tell the baby boomers to reign it in to make sure the younger ones get to see some benefits too. Why should we pay in and never get to reap any rewards because the people before us were greedy?

Everybody now knows defined benefit retirement schemes are unsustainable. Why shouldn't the law terminate them without compensation instead of letting some people drain funds from schemes that need to be kept alive by others who will never see those generous benefits?

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