Deloitte analysis shows Best Start, Best Lift reform will boost Victoria’s economy

As well as providing significant benefits to children’s early development, the introduction of the Best Start, Best Life reforms will deliver a boost of tens of billions of dollars to the Victorian economy, an independent analysis from Deloitte has found. 

 

The reforms will increase Victoria’s workforce by up to 24,800 FTE and increase the state’s real gross state product (GSP) by between $1.9 billion and $2.8 billion in 2032-33. By 2061-62, the benefits are expected to increase, delivering an average real GSP increase of between $4.8 billion and $7.9 billion, with up to 72,500 additional FTE per year. 

 

Benefits will be further expanded by the Commonwealth’s proposed changes to the Child Care Subsidy (CCS), creating up to 131,500 FTE per year by 2061-62 according to projections, and a significant increase of between $6.3 billion and $13.5 billion in 2061-62 – a boost to the Victorian economy of up to 1.6 per cent. 

 

Many of these benefits will come from an increase to women’s participation in the workforce which the program will create.

 

Currently, lack of access to early childhood education and care takes almost 26,600 women entirely out of the workforce in Victoria and costs the Victorian economy $1.5 billion per year in lost earnings. 

 

Between 9,100 and 14,200 additional primary carers expected to participate in the labour force by 2032-33, with the total hours worked by primary carers to increase between eight and 11 per cent. With 94 per cent of primary carers being women, this increase will overwhelmingly benefit female-dominated sectors like education, health services and accommodation, all of which are currently facing skills shortages. 

 

As well as fiscal benefits for families, the economic returns on the investment in the early years will be returned twofold through higher productivity and earning capacity, and reduced government spending on health, welfare and crime. 

 

“We knew our Best Start, Best Life reforms would make a difference to the bottom line of families across Victoria – and this new analysis confirms our state will be billions better off for decades to come,” said Victorian Minister for Early Childhood Ingrid Stitt.