Thanks for your comprehensive reply,
@Islay
I respect your standing against the introduction of the Activity Test from a children’s rights perspective; as I said, my question was not about the fairness of the reform, but only about its likely impact on childcare operators’ revenues.
By all means, I am not insensitive to the fairness issue, but, at the risk of coming across as too narrowly focused, I’d try and keep that separate from the investment discussion.
You’re right, at one end of the spectrum there is a minority of families who will have their subsidy halved (or will lose it altogether), and as a result will probably use less childcare. On the other hand, you have a majority of families who will have increased childcare purchasing power; it is rational to assume that at least part of that incremental purchasing power will be exercised.
Which force is going to be stronger? I cannot give a conclusive answer to that, but there is also a third variable to take into account; namely, those families with a either single income, or with one parent working full-time and the other part-time, where the non-full-time-working parent does not look for additional employment, not because there are no opportunities, but because the additional childcare costs associated with an extra day of work make it uneconomic.
Because the activity threshold is low, and the percentage of childcare subsidy for working families is being increased, it makes sense to me that there will be an increase in the number of parents wanting to take that extra work (especially in states like WA and QLD, where the economic cycle is turning in a positive way) and increasing their use of childcare accordingly.
This latter aspect is what I think is likely to tip the balance in favour of marginally higher, rather than lower, demand for childcare. Whether that is coincidental or not, the way the market has reacted to the news so far seems to agree with that.
My thoughts only, of course, and good luck too all parts involved.
(20min delay)