SUBJECTS: Return to the Child Care Subsidy
Deborah Knight: Now, the big change has been announced to the child care scheme. The Federal Government saying that it will ditch the free child care that was brought in, and it will be ditched from next month. Education Minister Dan Tehan has just announced that policy change. He’s on the line for us now. Minister, thanks for joining us.
Dan Tehan: Pleasure, Deb.
Knight: Now, this was brought in in April to help out providers who are really struggling because of the coronavirus pandemic. What’s going to happen now?
Tehan: So, what we’re putting in place is a transition package to help providers deal with the increased demand that they’re seeing. When we put in place our package to help deal with the coronavirus, it was all designed around demand falling, and the potential collapse of some providers in the sector. Now, over the last two months, 99 per cent of providers have remained open. And, our latest survey has shown that there is a 74 per cent demand back into the sector. So, providers want to be able to offer more care for more families. And, so, this package is now designed for them to be able to increase their offering and support those families who are going back to work as restrictions ease, face-to-face learning takes place at school, and jobs are created with the easing of restrictions.
Knight: There are a lot of parents and families, though, who aren’t returning to work, who don’t have their jobs. Is this going to see a case where we will see families having to pull their children out of child care, because they simply can’t afford to pay?
Tehan: Well, one of the important changes that we made is around the activity test, so that will help and support parents who have lost work or lost hours of work, being able to get access to the Child Care Subsidy.
Knight: So, they’ll get subsidy, but they’ll still, I mean, if people don’t have work, they won’t be able to pay.
Tehan: So, what we want to do is help them. And, there’s the Additional Child Care Subsidy, as well, which is there to help and support them. Out-of-pocket costs were less than $5 per hour for 72.4 per cent of children in centre based day care under the old system. And, as people, if they do have reduced hours or less work, those costs obviously come down, because that’s the way the subsidy works. So …
Knight: … But, when you brought this scheme in, that was largely to recognise the fact that that was the reality that was happening. People that could not afford to pay for child care, which is often very expensive in many of our cities. So, people were doing that, they were pulling their kids out. That was one of the first things to go.
Tehan: Also, there was, there was fears around the coronavirus pandemic, as well, so parents were pulling their children out because of fears around the virus, as well. So, for though those two reasons. And, the sector was on the brink of collapse. What we’ve been able to do is see 99 per cent of services remain open and offering that very important care during the last two months. But, the sector wants to be now able to offer more care, and that’s why, working with them, consulting with them, we’ve put this transition package in place, so that we can ensure that that increased demand that’s coming in as a result of us successfully flattening the curve, that that can be met by the sector.
Knight: Now, what about the JobKeeper part of this, too? Because, you’ve also announced that JobKeeper will end for child care workers a week later, on the 20th of July. The Prime Minister did say, though, only on Friday, that he would guarantee JobKeeper would remain in place until the end of September. Why then, only three days later, pull the pin for the child care sector?
Tehan: So, what we’ve done is consulted with the sector as to what is the best way to be able to equitably provide support for the sector as we transition. And, those consultations led to us to decide, working with the sector, to put in place, or keep, what was the old Business Continuity Payment that we’d put in place as part of our rescue package, to keep that there, and transition the sector off JobKeeper. This was seen as a much more equitable way to be able to ensure that the sector continues to be able to provide the care that we want it to, and the education that we want it to, right across the board.
Knight: All right. Well, we’ll get a response from the industry itself. Dan Tehan, Education Minister, thank you so much for joining us.
Tehan: Pleasure, Deb.