It is well established that people in regional and remote Australia are less likely to participate in the labour force than those living in major cities.
Though the gap between metropolitan and regional and remote workers is evident across genders, it has widened over the past 20 years for women.
Data from the latest Household, Income, and Labour Dynamics in Australia (HILDA) survey shows this gap more than doubled during this time for women, jumping from 2.4 per cent to 5.5 per cent, while it decreased slightly from 3.1 per cent to 2.6 per cent for men.
Women in regional and remote Australia have always been least likely to participate in the workforce, meaning they are more likely to face financial hardship and economic dependence.
This can lead to lower retirement savings and diminished professional skills and networks, making it harder to return to work later.
The disparity in the gap in workforce participation between women in metropolitan areas and women in regional and remote areas is particularly evident in Western Australia.
The labour force participation rate among women in regional and remote WA is nearly 10 per cent lower than their peers in Perth, while men in these areas actually have a higher participation rate than men in major cities.
This is largely due to the regional and remote labour market focus on male-dominated industries such as mining, agriculture and construction, resulting in female-dominated sectors such as healthcare and education being underrepresented and offering fewer job opportunities for women.
Caring responsibilities are also significant, with more than half of parents who struggle to work or increase their hours citing this as the main barrier.
This highlights the importance of early childhood education and care (ECEC) services in improving workforce participation for parents.
While ECEC services have expanded nationally in recent years, a significant gap persists between regional and remote Australia and urban areas.
In the second quarter of 2024, there were nearly 13,000 ECEC centres in major cities across the country, compared to less than 400 in remote areas.
The rate of remote ECEC centres exceeding the National Quality Standard is half the rate in major cities. Out-of-school hours care (OSHC) is also three times less accessible in regional and remote Australia.
This disparity between the cities and regions is also reflected in affordability, with families facing higher out-of-pocket expenses if they live outside metro areas. In 2023, only 1 per cent of children in remote areas were enrolled in Child Care Subsidy-approved services.
The Productivity Commission has recommended several critical ECEC reforms to address these challenges. One of the key suggestions is raising the CCS to 100 per cent of the hourly rate cap for families earning up to $80,000, in turn making childcare more affordable.
Another recommendation is the removal of the activity test, which restricts access to ECEC for children of parents who do not meet work or study requirements.
The quantity and quality of ECEC services in regional and remote areas also need to catch up.
The WA government has implemented several strategies to enhance ECEC services in regional and remote areas.
Key to this is eight regional local governments in WA receiving $200,000 to attract and retain childcare workers, which can be used for training, relocation costs, subsidised accommodation and establishing traineeships and partnerships with local TAFEs.
Improving ECEC is essential for increasing labour force participation in regional and remote areas, which will lead to a more equitable workforce and ensure no group is left behind.
- Dr Lili Loan Vu is a research fellow with Bankwest Curtin Economics Centre
