Fears end of free childcare could push families out of care and cost sector jobs

Dominic Giannini 1 July 2020
Childcare

Free childcare will end in mid-July, the Commonwealth Government announced. Photo: File.

Jobs and access to early learning will be put in jeopardy when the Federal Government ends its free childcare scheme on 12 July, Australia’s peak childcare advisory body has said.

Canberra-based Early Childcare Australia (ECA) CEO Sam Page called the government’s move “disappointing”, saying families and children would be at risk of missing out on childcare because of turbulent and uncertain circumstances during the pandemic.

“Our main concern is that families do not have the capacity to pay the fees they were paying before the COVID-19 pandemic and that switching back onto the childcare subsidy is going to mean a lot of children missing out,” she said.

“It is really hard to say [if we will see lay-offs and redundancies]. At the moment, services are reporting that they are at about 74 per cent [capacity], compared to the reference period in February, but at the moment there is no cost to parents.

“We do not know how many parents that are using childcare services can afford to keep doing that when the childcare fees kick back in.”

The Federal Government will also stop the $1,500 per fortnight JobKeeper payment from 20 July for employees at approved childcare subsidy (CCS) services and for sole traders operating a childcare service.

However, a $708 million transition payment will pay childcare services 25 per cent of their fee revenue until 27 September and the last two payments scheduled for September will be brought forward.

But Ms Page said this is not enough to ensure job security in the sector.

“I know that figure sounds quite high, but when you break it down over a million children, it is more like $700 per child. It is a payment that’s being brought forward that [childcare] services would have received down the track,” she said.

“It will help services with cashflow but I am not sure if it is going to be enough to protect jobs in the childcare sector.

“What we were calling for was, if the Government is switching back to the childcare subsidy, to increase the subsidy to make early education more affordable for families and to guarantee minimum access to children so that they can keep participating.”

ECA CEO Sam Page

ECA CEO Sam Page says the move from the Federal Government could result in job losses and children missing out on early education. Photo: Supplied.

The activity test, which determines how many hours of subsidised childcare a family receives, will also be relaxed.

However, Ms Page said it should be waived entirely during the pandemic as both parents need to remain employed or engaged in recognised activities.

“This means in a two-parent family, if one parent has lost their job, they will not be eligible for the ‘relaxation’ provisions unless they are also meeting the Activity Test,” she said.

“We were calling for a range of different measures [including] a suspension or scrapping of that activity test, scrapping it for at least 12 months.

“The increased level of subsidy could increase as long as it is needed. This economic recession is going to last a while and it is particularly impacting on women.”

While Chief Minister Andrew Barr said the Territory’s job fund would focus on young people and women, both of whom had been disproportionately affected by the crisis, there is no lever the ACT Government can pull as they do not run any childcare centres.

“It was not an unexpected decision,” Mr Barr said.

“I think they have foreshadowed that it was coming and that they put the free childcare arrangements in place until the end of June. I would not expect that the ACT Government would need to step in beyond the Commonwealth’s transition fund.

“I understand that the wind-up date is now a fortnight later into the middle of July, just conveniently beyond the Eden-Monaro by-election for those who are interested in why certain dates are chosen.”


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