SUBJECTS: Return to the Child Care Subsidy
Allison Langdon: In a major blow for parents, the Federal Government’s free child care scheme comes to an end in about four weeks’ time. And, as a working mum with two young kids in child care, this is a tough one, because I’ve been lucky enough to keep my job throughout this pandemic. But, plenty of mum mates have either lost theirs or had their working hours cut, so this decision is going to have a huge impact on them. The Education Minister Dan Tehan joins me now from Parliament House. Minister, thank you so much for your time. I think we all understand free child care can’t last forever. But, will the economy be better by July 12? And, will jobs be back as normal?
Dan Tehan: Well, what we’re seeing is extra demand come into the child care system. The latest survey that the Government undertook showed that demand was back up at levels of 74 per cent. So, the decision we’ve had to balance is, do we keep the current system in place, which was beginning to limit the amount of hours that parents could get their children into care? Or, do we put a transition arrangement in place, which enables more parents to be able to get their children into care? Now, we said we would give parents and the sector four weeks’ notice of a change. We’ve done that, and we think – through the consultations we’ve undertaken with the sector – that this will get the balance right, and we’ll be able to see more children get the care they need over the coming months.
Langdon: Okay. So, we had the advocacy group The Parenthood on the show earlier, and they said that demand is as high as it is at the moment because child care is free. And, that some families, they will have to cut back days or withdraw their kids from care entirely. I mean, that means someone then has to stay home to care for the kids, and it’s typically the mum. How does that help an economy already in recession?
Tehan: So, that’s one of the things that we thought long and hard about, and through discussions with the sector, we agreed to make changes to the activity test, which will free up parents’ ability to be able to get access to subsidised care. Now, we have to remember, 20 per cent of families in centre based day care pay no more than $2 an hour for care, and for 70 per cent of families, it’s $5 an hour or less. So, the scheme that we’re bringing back, the Child Care Subsidy scheme, is targeted for those who are least well off. And, so, we think, with the changes to the activity test, and the fact that the scheme, the old scheme that we’re bringing back, is targeted for those who have lost work or who’ve seen reduced hours, that they will get more subsidy as a result. We think that we’ve got the balance right in this transition.
Langdon: But, I mean, that old system that you’re talking about that you’ll revert to, I mean, that’s a system that’s broken, isn’t it? I mean, child care costs, they were crippling before the pandemic hit. We’ve got some of the highest fees in the world.
Tehan: So, well, what the OECD shows is that the Government invests into the child care sector – we’re the fifth highest nation in terms of investment into our child care sector. The new system that we put in place – which will have been in operation for two years as of July 1 this year – has seen out-of-pocket expenses come down for parents by 4 per cent, the latest data we’ve had from the ABS, and it is targeted for those who earn least. So, as I’ve said before, for 20 per cent of families, they pay no more than $2 an hour in centre based day care.
Langdon: The issue is that parents still have to pay the gap between the subsidy and the cost of care, and we know in pretty much every major city that gap is quite substantial.
Tehan: So, that gap, obviously, varies, and it depends on your income. As I’ve said, the new system, which we put in place nearly two years ago, has seen that gap come down by 4 per cent, and we want to continue working with the sector to make sure that child care remains affordable going forward. But, the most important thing is, that we’ve got a sector to be able to do that with. And, can I thank the sector for what they’ve done over the last two months. Because, working with the Government, we’ve got 99 per cent of our providers up, running and operating. If you look internationally, the pandemic, the coronavirus pandemic, has had a huge impact on the sector. But, our sector has worked with the Government, and, I think, is in a strong position now, as we open the economy, to transition to more normality.
Langdon: Okay. Will you agree to at least review it, if, as these advocacy groups say and as parents are saying, that they’re going to have to pull their kids out, or reduce the number of days. If you see that happen once the scheme ends, will you review it?
Tehan: Well, this isn’t a set and forget. As we did with a relief package that we put in place, we said we would continue to work with the sector, and continue to consult with the sector, and that relief package worked, as a result. So, we will continue to consult and work with the sector through these transition arrangements that we’ve now put in place.
Langdon: I tell you what, it is a tough one, because we know that, you know, the money’s got to be paid back, there is no bottomless pit. But, this is going to have a big impact and, mostly, on working mums. So, hopefully, we do get it right. Thanks, Minister. Appreciate it.
Tehan: No. A pleasure to be with you.