The real problem with the story. Childcare is so expensive in the area that working only earns $4/hour . Lower income people get a subsidy to increase the rate but it is still only $4/hour.
Not in Australia.
A single parent on permanent full-time (38h)
minimum wage in Australia would be paid $753.80pw, thus earning $150.76 a day. As I noted above,
a household on under $69,390 will have 85% of their childcare costs paid for a number of days in proportion to their work, volunteer or study hours; one on 38hr pw could get up to 60hr childcare subsidised.
As with everything, there is no upper limit on the cost of things, however childcare in my area averages $120.50* a day, for 0700-1800, where they supply nappies and food as needed, saving you the cost of those. Paying 15% of this would be a cost of $18.07 a day, or $90.38pw.
Net pay exclusive of tax would then be $753.80 - $90.38 = $663.42, taking your effective hourly wage from $19.84 to $17.46ph.
Tax as always is complicated. However, there exists a
low and middle income tax offset the person could claim, a
family tax benefit, and someone on minimum wage would also likely have things like uniform deductions, etc. Almost certainly their tax bill would be under $100pw, and in some circumstances they may pay almost no income tax at all.
Now, if you are a very high income household, or if you have multiple children, then the situation is different.
The government childcare subsidy is of great financial benefit to low and middle income earning households, it is of little financial benefit to high income households, and no benefit to very high income households. Higher income households are not punished, but they receive no benefits - I'm comfortable with that. The government will be helping the single parent on minimum wage, the working class couple, the professional woman who is a recent graduate and returning to work; it won't be helping the household where one of them is a neurosurgeon on $450k.
That seems alright to me. The government also doesn't pay the $30k annually that household spends to send their child to a private school, or the $5k for lacrosse lessons.
*This is about as cheap as childcare can be. My state, for example,
requires a staff:child ratio of not less than 1:4 up to 36 months, and 1:11 up to school-aged. The places are open 10-12 hours, and require staff there for 12hr a day at least. If you had just 4 children under 36 months, then you must pay the person at least minimum wage of $19.84ph for 12 hours, which is $238.08 in all, or $59.52 daily for each of 4 children. Less or more than 4 children and it's the same one staff person but more cost per child, so,
1 staff & 1 child = $238.08 per child daily
1 staff & 2 children = $119.04
1 staff and 3 children = $79.36
1 staff and 4 children = $59.20
2 staff and 5 children = $95.23
2 staff and 6 children = $79.36
2 staff and 7 children = $68.02
2 staff and 8 children = $59.20
Obviously you'll try to plan things to get the ratio right. But parents aren't tied to a particular pickup time, and you have to have the staff there just in case, so you'll generally have more staff than you need.
If you have more than a few staff, then you need a supervisor, who'll be paid more. You need to either buy the food in, or have a cook/chef to prepare it - and with so many children having allergies and infants having sensitive stomachs etc, you need them to be pretty switched-on and conscientious and professional. You also need a cleaner, parents may happily have their children shit and snot everywhere at home but expect a childcare centre to be spotless. If you have more than one centre then you'll need at least a part-time accountant to do payroll.
And of course you also have to pay for the building and utilities, and given that you're dealing with children, what do you think their liability insurance must be like?
$120 a day is thus probably about the lowest they can charge. Thus the government subsidies.