It's interesting, isn't it. I recently did the sums re adding an extra day to my working week (I'm a parttimer) and it turns out working a whole day extra per week would bag us a net gain of $1700 per annum. That comes out at working for less than $5 an hour. Had we still been using childcare, that would become a negative figure. Basically, the only way it will be worth my while to increase my working hours from this point on is if a) DH takes a massive pay cut or b) I get a massive pay rise or c) I change up to full time hours. Neither of those scenarios seem likely at this point. So we're effectively locked into earning at our current rate.

ETA - I tried to think about how the Grattan Institute suggestion would work and i couldn't think it through. Why would FTB have to be counted as income in order for the CC expenses to be deductible for the purposes of calculating tax/welfare? That's like a chicken and egg thing, isn't it?