NFAW independent modelling shows Economic Boost from increased funding in the CARE SECTOR

Following the release of the 2020 Federal Government budget, the National Foundation for Australian Women (NFAW) commissioned independent analysis by the Centre of Policy Studies to identify the effect of investment in the care sector. Workers in Aged Care, Disability Care and Child Care are among the lowest paid workers in the Australian economy yet work long hours to support community needs.

The report clearly demonstrates the Federal government can no longer ignore the care sector’s desperate need for adequate funding as new modelling confirms this will improve quality of care, create more jobs for women and grow the economy through increased participation.

According to NFAW’s Chair, Social Policy Committee Professor Helen Hodgson, “Investing in the care economy works three ways: it increases labour market participation, improves employment conditions for carers, and, importantly, it addresses female economic disadvantage by reducing the wage gap.”

The investment model included increased capacity based on estimates of unmet demand and wage increases for personal carers and childcare workers all providers of a vital fabric of our communities.

Over 900,000 Australians who currently provide unpaid care to the elderly, disabled, or children aged under five report that they would like to work more hours in paid employment.  The independent modelling also showed that providing the additional funding needed to enable these workers to work an extra 10 hours a week in paid employment would have a significant economic payoff.

Increased labour market participation would stimulate the whole economy, so that the increased economic growth would underpin greater revenue, offsetting the cost to the Government. The net cost to the budget when the policy is fully implemented would be less than 20 per cent of the direct cost of the additional service delivery.

Labour input would be over 2 per cent higher, and the modelling estimates that annual GDP per person would be $1270 higher, or more than $30 billion a year in aggregate. Average incomes of both women and men would be higher, although women’s income would be higher by a greater margin.

Professor Hodgson says, “We were told that the 2020 -21 budget is “all about jobs”. But an analysis of the 2020 budget through a gendered lens shows that most of the jobs and tax cuts are in male dominated areas, including apprenticeships and traineeships, construction, and manufacturing. The female dominated care sector was largely overlooked.

“Government investment in physical infrastructure such as roads is an effective instrument for economic stimulus, but the employment benefits flow to men. This modelling confirms government investment in the care sector would deliver similar economic stimulus, with women the main beneficiaries,” says Professor Hodgson.

“The care sector can no longer be ignored. Funding the care sector is critical to increasing female workforce participation and to improve employment conditions for workers in the care sector.

“The fact is that applying a gendered lens to the economy is the only way to properly value the work done by women,” Professor Hodgson concluded.


For further information contact

  • Professor Helen Hodgson, Chair, Social Policy Committee, National Foundation for Australian Women. Phone: 0418 906 162  or Marie Coleman. Phone: 0414 483 067  

 NFAW acknowledges the support of Women on Boards