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.

Centre-based childcare costs have risen in NSW Northern Rivers region in 2019

According to the federal Dept. of Education's Child Care in Australia report for March quarter 2019, a total of 1,940 Clarence Valley children were enrolled in either centre-based child care, family day care or after school care in the March Quarter 2019. This is a decease in total enrolments on the December 2018 quarter figures.

A further 7,280 children were enrolled in the Richmond Valley region and 4,390 in Tweed Valley. These figures represent an modest increase in enrolments for both Richmond and Tweed valleys.

The average centre-based child care fee per hour in the Clarence Valley was $9.13 (up 11.9% on March 2018), in the Richmond Valley coastal region $9.19 (up 6.3%) and in the hinterland $8.89 (up 6.2%), while the Tweed Valley per hour charge was $9.01 (up 9.5%).

The official fee cap for centre-based childcare is $11.77 per hour and the national average out of school hours care fee is $9.95.

Out of school hours care fees were not recorded for the Clarence Valley as less than 5 children were recorded, but these fees went down in Richmond Valley coast and hinterland as well as in Tweed Valley by -3.9%, -0.3% and -4.6% respectively.

Remembering that Clarence Valley local government area population at the 2016 national census contained over 8,000 children 14 years of age & under and in the December quarter 2018 report there were 1,990 children enrolled in childcare, I find it rather strange that Nationals MP for Page Kevin Hogan blames the recent price rise on "increased demand" for services when valley enrolment numbers were down by 50 children in January to March 2019.

Australian Education Minister Dan Tehan gives working parents in rural and regional areas unrealistic advice

"Nearly 300,000 children in regional and remote areas receive formal childcare. However, unlike capital cities where a glut of childcare centres is reported, access to childcare continues to be a problem in regional areas.” [Centre for Independent Studies, 23 September 2018]

City centrism is alive and well in the Morrison Government.

Photograph: ABC

Here is the Minister for Education and Liberal MP for Wannon Dan Tehan  (pictured left) blithely assuming that every town across Australia not only has a chilcare centre it has more than one.

In Dan's world parents in rural and regional areas are apparently able to shop around for competitively priced childcare.

[cue cynical laughter]

The Daily Examiner, 22 July 2019, p.5:

Greedy childcare centres have gobbled up almost half the money parents were meant to save from new subsidies by raising their fees.

A subsidy system which began on July 2 last year was meant to save the average family $1300 in childcare fees a year.

But new data shows that in the year leading up to the subsidy’s introduction, the average parent with a child in care 48 weeks of the year is paying $622 more than they were 12 months ago.

Of this $276.50 of that came from cost increases between July and September 2018, after the subsidy was introduced.

Labor’s childcare spokes-woman Amanda Rishworth said the government should be “naming and shaming” centres who lifted fees to take advantage of the subsidies.

But Education Minister Dan Tehan said out-of-pocket costs for child care had still fallen almost 9 per cent, and urged those getting a raw deal to “vote with their feet and find a new service”.

Education Department data recording costs in September 2018, the first released since the subsidies came into place, revealed the increased costs.

It showed the average family, which pays for 28.8 hours a week, had fees increase by $13 a week between September 2017 and September 2018, including $5.80 a week increase in the quarter the subsidies were introduced….