Subjects: Coronavirus and Early Childhood Education and Care Relief Package
Brooke Corte: The child care industry is another one crippled by the coronavirus. Parents have been pulling their children out of care and looking after them at home. Employing close to 200,000 workers, the sector was thrown a multibillion-dollar lifeline by the Government today. It’s a move which is bound to please many parents and child care providers alike. Essentially, free child care. From 6 April, the Government will be picking up the tab on child care costs for the next six months, at a cost of an extra $1.6 billion. Dan Tehan is the Federal Education Minister and he joins me now on Money News. Good evening, Minister.
Dan Tehan: Evening Brooke. How are you?
Corte: Good, thank you. Just tell us what you’re trying to ultimately achieve with this package.
Tehan: What we’re wanting to achieve is we want to make sure that for those people who are out there working during the pandemic, for those vulnerable children who need that continuity of care at a child care centre, and for those people who have de-enrolled from the child care sector, what we want to do is provide certainty for the sector, and, then, encourage those who have disengaged, to re-engage. And, at the same time, make sure that those who need to work and need their children cared for while they’re working, to have the ability to send their children, as best as we can, to the service or the centre that they’ve been sending their child to.
Corte: And, was there a real concern that, essentially, some of these centres might not have been there in six months, on the other side, without this?
Tehan: That’s correct. There was a growing issue around viability, because of the number of parents who were removing their children from child care. And, so, what we wanted to do was to make sure that we put some certainty back into the sector. So, what we’ve done is, we’ve redesigned the way the sector will be funded by the Commonwealth Government, and that will change as of midnight on Sunday night. This has involved an incredible amount of complex work to do this over the last seven to nine days. I think we’ve come up with a system, now, which will enable the system to have the economic viability that it needs to get it through the next six months.
Corte: Because, child care operators do have very high fixed costs, don’t they? That’s one of the issues.
Tehan: They do, and, that’s very true. And, one of, one of the major fixed costs is the, 60 per cent is wages. So, what we needed to do was, once the wage subsidy or JobKeeper payment was in place, we then needed to come up with the system which calibrated with that to provide that economic viability into the sector. And, so, that’s what we’ve been able to do – design a system based on the JobKeeper initiative, which now means that wages on the whole, across the sector, will be funded up to $1,500 through JobKeeper. And, this additional payment that we’ll be making, based on a fortnight of fees that a sector had collected, up to the rate caps that we have in place, that payment will be made on top of that, which then underpins the viability of the sector.
Corte: But, many people wouldn’t have been withdrawing their kids in the last few weeks purely because of the financial reasons. The issue was with some of the state governments coming out to say, ‘Well, you probably shouldn’t be sending your kids to school, and, by extension, yeah, probably not to child care either.’ That’s the reason I pulled my kid out. So, I mean, this is a problem with the mixed messaging that we’ve got between Federal and state. Because, now I’m being told not only is it fine for my kid to go back to child care, but, it’s also now free, so I’m being encouraged to.
Tehan: Well, the Commonwealth’s position has been clear. The position of state and territory leaders has backed the Commonwealth position, in that, what they’ve said is, if you can keep your child at home, when it comes to school children, that’s been their preference. But, if you need to have your child looked after in the school environment, then schools will be open, and you’ll be able to send your children there. And, that’s the consistent position of all states and territories across the country. When it comes to …
Corte: … But, do you accept that that creates this moral hazard for parents? Someone used that phrase, and I keep remembering it, because that’s the situation I find myself in. I’m being told, ‘Well, you can send them, but you really shouldn’t be.’ I mean, that’s a tough one for parents …
Tehan: … Well, no, well, what we want from a Commonwealth point of view, we’ve said all along, is that we want to listen and take the advice of the chief medical officers’ panel. That’s the chief medical officers from around the country, every state and the territory, and then the Commonwealth Chief Medical Officer. We want to take their advice, and they’ve been very consistent right through this coronavirus pandemic. And, that is, that it’s been safe to send your children to child care, it’s been safe to send your children to school. And, one of the things – and I’ve just finished a hook-up of all state and territory education ministers where we’ve been looking at what regulatory changes we could help to make to also support the child care sector – is that we’ve also agreed that everyone will follow the chief medical officers’ panel in terms of the medical advice when it comes to child care. And, there’s already a commitment from National Cabinet to do the same thing when it comes to schools.
Corte: Federal Education Minister Dan Tehan, thank you so much for joining us for Money News.