Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

The Morrison government is under pressure to revamp the child care system in next month’s budget to make it easier for women to get back into work.

Big business, Labor and the early education industry believe child care should be a top priority for Josh Frydenberg on May 11.

Business Council of Australia also wants the treasurer to fix the paid parental leave scheme to enable an equal sharing responsibilities among parents when a child is born.

BCA chief executive Jennifer Westacott argues with Australia’s population growing at its lowest rate since World War I, it is critical female participation is lifted to make the most of homegrown talent.

The Productivity Commission found more than 90,000 people across Australia were not in the workforce last year, mainly due to the high cost of child care.

“Our child care and paid parental leave systems are a barrier to women who want to get back into work and they don’t work for modern families,” Ms Westacott said.

On child care, the business council wants the child care subsidy increased from 85 to 95 per cent for lower income households, with tapering for families earning more than $80,000.

“For every dollar we invest in child care, we’ll get two dollars back,” Ms Westacott said.

“KPMG estimates that the cost of our child care plan would be around $2.5 billion but it would deliver a boost to the economy of around $4 to $5 billion.”

Federal Health Minister Greg Hunt said the government had taken “profound steps” on both child care and paid parental leave in recent years.

He said the difficult changes had been made possible by strong budget management.

“We have been able to do that and that has made a difference to Australian families,” he told reporters.

Labor’s early education spokeswoman Amanda Rishworth said the opposition had a similar plan to the Business Council of Australia, but the objective was the same.

“That is to remove some of the barriers that exist for women to work the fourth or fifth day in the week,” she said.

“It is critical for economic growth to unleash this really important workforce, our women’s workforce, and to do that we need to support them when it comes to child care.”

Thrive by Five campaign chief Jay Weatherill said reforming Australia’s outdated and expensive child care and early learning system needed to addressed in the budget.

“In modern day Australia it takes two incomes for most families to buy a house, but it takes affordable child care to earn two incomes,” the former South Australian premier said.

On paid parental leave, the business council is proposing a more flexible system that would encourage both parents to take more equal caring responsibilities.

“The current system encourages one parent, almost always mum, to take the lion’s share of time away from work,” Ms Westacott said.

“Under our scheme, families would get to choose how they divide their leave based on what works best for them.”

The council estimates the cost of transforming the paid parental leave system would be around $1 billion a year.

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