The New Discrimination and Childcare

By Patricia Apps

The 'new discrimination' refers to the use of government policy to increase the effective gender wage gap, measured in terms of the second earner's net of tax income gain from working in the market place rather than at home.

This paper presents an analysis of the tax treatment of family members and shows how the expansion of policy instruments, such as family tax benefits withdrawn on joint income and the low income tax offset, has raised average and marginal rates on the income of the second earner, typically the female partner. The study concludes that this new discrimination, together with limited access to affordable, high quality childcare, has severely limited the growth of female labour supply needed to fund family support, and is ultimately unsustainable in an ageing population.

(ANU Centre for Economic Policy Research discussion paper no 541)