Leading economists are urging the Albanese government to bring forward childcare subsidies to ease the pressure on households staring down further rate rises and looming petrol hikes.
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EY chief economist Cherelle Murphy and the Grattan Institute's Danielle Wood have joined a growing chorus of voices calling on Labor to fast-track its cheaper childcare package to relieve the burden on parents and help get women back to work.
But the government continues to resist the calls, with Early Childhood Education Minister Anne Aly arguing that the existing childcare workforce would not be able to absorb the demand if the subsidies were brought forward from the planned July start date.
"Believe me, if there was a way to do this, I would have done it," Ms Aly told ABC News. "We want to make sure that when we do this, we do it right. It is a big reform. And it's something that you want to set up effectively and smoothly. It's going to take that time."
Cost of living was thrust back into the centre of the political debate after the Federal Parliament returned for the final sitting fortnight before the October budget.
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The Reserve Bank is tipped to lift interest rates by 50 basis points at a meeting on Tuesday as it attempts to rein in surging inflation.
Figures from RateCity show a $750,000 mortgage holder would see their monthly repayments $216 if market predictions are correct and cash rate is raised to 2.35 per cent. For the average median house in Canberra bought three years ago, that translates to a rise of $158 a month.
In a double-whammy for households, petrol prices are set to rise when the temporary halving of the fuel excise cut ends at the end of the month.
Prime Minister Anthony Albanese said ending the fuel excise would be a "difficult decision" as he conceded it would add to inflation.
As debate rages over solutions to the cost-of-living squeeze, Ms Murphy and Ms Wood agreed on the merits of bringing forward the childcare subsidies.
Labor went to the election pledging to lift the maximum child care subsidy rate to 90 per cent, which would be available to 96 per cent of all families.
The scheme was designed to expand access to early childhood education and lift workforce participation among women.
"Let's face it, everyone wants it," Ms Murphy told ACM.
"Reducing the cost of childcare more quickly would seem to me to be a sensible place to start because essentially that can help household budgets. Plus it has the very important added bonus of increasing workforce participation and so you get a double positive out of it."
Ms Wood acknowledged the logistical challenges, but said it was an "absolute no-brainer" to fast-track the childcare relief.
"The economic case is really if you make it more affordable you reduce the out-of-pocket costs for childcare," Ms Wood told ACM.
"It seems like an absolute no-brainer. It's also good in a period of higher cost of living. It brings down costs for families. It is a big benefit for family budgets and it actually also brings down the headline inflation rate."
Treasurer Jim Chalmers said there would be a "substantial cost" in bringing forward the subsidies to January, as he defended the decision to stick with the scheduled start date.
Mr Albanese said he was concerned about the cost of living as he acknowledged many Australians were "doing it tough".
The government on Monday announced the largest indexation increase to social security payments in the past 30 years.
The changes, which are the result of the skyrocketing inflation rates, mean the base rate of Jobseeker has increased $25 to $668 per fortnight.
The Greens and Australian Council of Social Service said the small rise - which equates to about $1.80 more a day - was not nearly enough to lift recipients out of poverty.
"The cost of everything is going up and giving people who are doing it tough less than $2 a day will not lift them out of poverty and will not give them the dignity that they need to go and look for work and get their lives on track," Greens leader Adam Bandt.
Independent for Goldstein Zoe Daniel said childcare subsidies should be brought forward alongside an extension of paid parental leave to 26 weeks to ease cost pressures on households.
"If we can afford stage three tax cuts, we can afford this," Ms Daniel said.
"For low paid women working part time or casual cannot afford, nor can they access childcare because their shift patterns are determined week by week while childcare places are determined term by term or year by year."
Dan Jervis-Bardy
