Is the Morrison Government rushing like a bull at the gate in trying to roll back COVID-19 financial assistance at the earliest opportunity?

There were est. 1.3 million children in childcare and 200,000 staff in the early childhood education and care sector across Australia before the COVID-19 pandemic began.

On 23 March 2020 the Morrison Government announced it would help families with the cost of child care and provide support for child care centres to remain viable and pay staff during enforced COVID-19 closures.

On 2 April it announced the government had suspended its usual childcare subsidies and instead offered to pay 50% of childcare centres’ usual fees based on February enrolments, with Prime Minister Scott Morrison stating that “Around one million families are set to receive free child care during the coronavirus pandemic...This plan complements more than $1 billion we expect the sector to receive through our new JobKeeper payment to help ensure many of the 200,000 vital early education workforce can stay connected to services….The plan means the sector is expected to receive $1.6 billion over the coming three months from taxpayer subsidies”.

This announce meant that child care operators would be receiving in total $300 million more in government funding than they would otherwise receive over a three month period.

Then on 1 May the Morrison Government announced a boost for not-for-profit organisations and educators from family daycare and in home care services which are not eligible for the JobKeeper wage subsidy.

By 19 May it was being reported in The Guardian that:

...an education department report found that a quarter of childcare centres found the free childcare system – due to conclude at the end of June – had not helped them remain financially viable. Education department officials have blocked the release of the full report, claiming cabinet and commercial confidentiality.

Tehan claimed success because 99% of centres are still operating and said the government is consulting the sector “to make sure any changes will see the sector continue to thrive”.

Tehan said “no decision” had been taken on ending free childcare but “if demand continues to increase at the levels we’re seeing it, we have to understand that this system was put in place to deal with falling demand”.

Come 8 June 2020 and Minister for Education and Liberal MP for Wannon Dan Tehan issued a media release which stated in part:

As Australians return to their workplace, businesses re-open and children return to classroom learning, the Government will resume the Child Care Subsidy (CCS) to support families to access affordable child care.

Minister for Education Dan Tehan said the temporary Early Childhood Education and Care Relief Package, introduced on 6 April, had done its job and would be turned off on 12 July.

From 13 July, the CCS will return, along with new transition measures to support the sector and parents as they move back to the subsidy. To ensure Government support is appropriately targeted, JobKeeper will cease from 20 July for employees of a CCS approved service and for sole traders operating a child care service.

The Government will pay approximately $2 billion in CCS this quarter to eligible families. The CCS is means-tested to ensure that those who earn the least receive the highest level of subsidy.

In addition to the CCS, the Government will pay child care services a Transition Payment of 25 per cent of their fee revenue during the relief package reference period (17 February to 1 March) from 13 July until 27 September. Importantly, the last two payments scheduled for September will be brought forward to help with the transition and cash flow.

This additional Transition Payment of $708 million replaces JobKeeper and applies important conditions on child care providers.

Until 27 September 2020 child care fees will be capped at 17 February to 1 March levels and there will be an easing of the Activity Test.

So five weeks after this latest announcement there will be no free child care for sole parents or couples anymore and another two weeks after that eligible child care workers will not receive the $1,500 before tax fortnightly wage.

There is no explanation for why child care workers are losing JobKeeper payments eleven weeks ahead of schedule. One has to suspect that being a lower paid, predominately female workforce it is seen as easy pickings by the Morrison Cabinet.

With no employment ‘snapback’ in sight due to an Australian Bureau of Statistics Employment To Population Ratio, Australia Graph like this (left) as well as calls for the abolition of penalty rates and a general wage freeze, one wonders how a return to fee paying child care in July will assist the unemployed and underemployed to get their family finances back to pre-COVID-19 levels, if at the very least the average fee for one child would be in the vicinity of est. $84-$100 a week after subsidy coming out of a family income which for many may be between $388 to $468 a week by the end of September.

It is thought likely under these conditions that the increase in enrolments that Tehan talks about (which in reality has only reached 75% of normal capacity by his own admission) will fall away in the next two months.

In the last 30 days a total of 32 child care businesses were listed for sale at seekbusiness.com.au.