This blog is part of a series relating to the economic impacts of the COVID-19, novel coronavirus pandemic of 2020.
For the past month, child care centres across the country have reported a significant decline in attendance and enrolments due to families pulling their children out of child care. This has caused a major drop in revenue for many facilities. In an effort to keep these business open, the Federal Government announced Thursday 2 April that childcare would be free until the end of the financial year. To make this happen, Australia’s childcare facilities will receive $1.6 billion over the next three months in the form of the Early Childhood Education and Care Relief Package. This financial boost is intended to subsidise lost income of 13,000 child care centres across the country due to the COVID-19 crisis. Funding goes directly to child care centres, and centres need not apply – payments will be made automatically. Payments are in lieu of existing government support such as the Child Care Subsidy (CCS) and Additional Child Care Subsidy (ACCS).
Prior to this scheme, no specific assistance had been allocated to the child care sector, even though it is considered an ‘essential service’. Under this new package, the Government will pay child care centres 50% of the fees they were previously receiving. These will be calculated based on attendance rates from 2 March, before the mass departure of children from child care facilities began.
Funding will commence Monday 6 April and run until 28 June 2020, with a review after one month and plans for an additional three months of funding to be instated at the beginning of the 2020-2021 financial year.
Prime Scott Morrison said that “school will return after the holidays”, which commence in most states on 10 April, but that there will be a some distance learning measures put into place. Furthermore, child care centres will be able to provide vacation care during school holidays as well as services taking place outside of school hours.
The relief package is intended to complement the JobKeeper payments, which alone are not enough to keep many child care centres in business. As attendance and enrolments have plummeted in the past few weeks, child care centres across the country have had to lay off or stand down staff due to a drastic decline in revenue. As money gets tight, parents have had to pull their children out of child care. This comes as no surprise, with thousands of Australians already having lost their jobs due to coronavirus and an estimated 500,00 more to face unemployment in the coming months.
In order to be eligible for the payments, child care centres must not charge parents any fees, including gap or out-of-pocket fees. Normally, through the CCS, the Government pays about 60% of the cost of child care services. The rest, called the “gap fee”, is covered by families. Under this new scheme, child care services will come completely cost-free to families.
Centres that receive payments must attempt to re-enrol children who have recently been taken out. If centres have available space, parents who did not previously have their children enrolled in child care are able to enrol them free of charge. Furthermore, if a family wants to keep their children at home but maintain their place within a child care centre, they are welcome to do so. Minister for Education Dan Tehan explained, “if you have a place with a childcare centre, and you want to keep your children at home, then you will get that continuity with that centre through the pandemic.”
Priority is given to parents who are still working, including those working from home, as well as vulnerable children and those recently removed from care. Mr Tehan specified that preference will be given to ‘essential workers’ – a notoriously difficult concept to define – but is open to all parents. This comes after parents across the country report difficulty working from home while trying to manage their children at the same time.
Mr Tehan noted that this package is intended to encourage parents to re-enrol their children in child care by waiving financial barriers to enrolment. He explained, “the hope is that now all parents who need will get the care they want, and those who have sought to disengage from the childcare sector will re-engage with the sector.” What he fails to take into account, however, is that the decision made by many parents to remove their children from child care appears to be more attitudinal than financial. As we have previously discussed, the Government has routinely sent mixed messages regarding social distancing and school closures, while many parents and teachers have called for nationwide school closures to help fight coronavirus. Melbourne teacher Joss Coaley tweeted, “If children can be placed into childcare for free for 3 months, can’t we just confirm that schools will be closed for 3 months now”, and Twitter user @PaulRoom101 noted, “I can’t imagine many parents will put their kids in childcare at the moment given the #COVID19 risks, even if it’s free.” These concerns were echoed by financial news website The Sentiment, which took a jab at the Commonwealth when tweeting, “Scott Morrison has stressed practices to prevent the community spread of #COVID19 whilst also encouraging #parents to utilise a $1.3b stimulus which will make #childcare free. It’s clear that Mr Morrison has no idea how childcare centres function.” Despite these concerns, Prime Minister Morrison maintains “there is no health risk to children going to school or childcare”.