Wake up at night worrying about child care costs?  Fretting that there is no rise from the boss this year?

Australian families are doing it tough – and even Prime Minister Malcolm Turnbull realises he has to do something about it.

Mr Turnbull made childcare the focus of his speech at the National Press Club this week. The guts of it is that the Government wants to streamline the two existing Federal childcare subsidies and tinker with the asset test and create one payment called the Child Care Subsidy.

Parents earning less than $65,000 per year would receive the highest payments, covering 85 percent of their costs.

So far so good.

But the second part of the plan, which has been strongly criticised by the Opposition, is for the child care subsidies to be paid for by cuts to family tax benefits. The Lord giveth and the Lord taketh away, as The Bible says.

Lobby group The Parenthood say the new proposal would mean that some families will be worse off.

Turnbull boasted that under the Government plan, a family earning $65,000 or less would only be paying $15 a day for childcare.

But let’s do those maths. $75 a day for five days a week is $375 a week. If you are a working parent or if both parents work, your child will probably need 48 weeks of child care per year, so that is $18,000 for one child alone.

Remember that if you are on $65,000 per year, you will pay income tax of just over $12,000, so your disposable income will be barely $50,000.

Minus $18,000 from that, even given the Government’s new found generosity, and you are living on just over $30,000 to pay for everything else.

No wonder people are struggling. But there is much more to this.

Wages growth has slowed.  But other costs haven’t.

Child care has been rising, for sure; but so has insurance, medical care, pre-school education, property rates and even children’s clothing. And power: the Australian Energy Market Commission says household electricity prices are set to increase by around 3.5 percent over the next two years.

Meanwhil wages growth, according to the Australian Bureau of Statistics, was at 1.9 percent last year –  a record low.

Wage growth and price rises of "essentials"

Source: The Guardian

The one thing saving Australian families from being even more worse off is that inflation is at a 19 year low of 1.5 percent and interest rates – official ones at least – are at record lows.

That doesn’t seem to be helping many though, particularly the average Australian families Mr Turnbull is targeting with his childcare plans.

Is your family struggling? Tell us your stories  – and share any tips and advice in the comments below.

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