SUBJECTS: Early Childhood Education and Care Relief Package
Liz Trevaskis: So, we’ve been hearing over the last few weeks from day care centres here in the Northern Territory about the difficulty that they’ve had with adjusting to the new free child care plan. We’ve heard just yesterday from a family day care centre, who are only getting paid by the Government for half of the children they’re currently looking after. We’ve heard of one major child care centre in Darwin who has had to close their doors because they are financially unviable at the moment, meaning kids of frontline workers are without care. Mostly, what we’ve heard, though, is confusion about how the new system operates, and concern that local centres are being expected to operate as normal, with far less money. Dan Tehan is the Federal Minister for Education. I spoke to him earlier and asked him to take us back to the beginning, and to explain why they’d scrapped the original system and how this new system is supposed to work.
Dan Tehan: We turned off the old system because what was happening was that parents were withdrawing their children from child care, and it was making large parts of the sector unviable. And, what we have put in place is a system whereby we provide base level funding to providers right across the child care sector. And, it’s designed to calibrate with JobKeeper, which is the package that the Government announced to help those people who might otherwise find themselves disengaged from their employer. One of the things that we had to do was to then put in place circumstances where people not, might not be able to access JobKeeper, and, also, where they might have seen increased enrolment. So, we’ve done that by putting in place a special circumstances fund. So, for any provider who can’t access JobKeeper or who hasn’t seen their enrolment diminish – as a matter of fact, have seen them increase – they apply through this special circumstances fund, and that takes into account either the fact they’re not eligible for JobKeeper, or that they’ve had increased enrolments since the pandemic started.
Trevaskis: Both of those scenarios are the ones that Northern Territory operators seem to have been contending with over the last couple of weeks. The picture that you painted, originally, is certainly what we’re well aware of has been happening down south, and particularly throughout Sydney and Melbourne. Here in the territory, where we’ve had 28 cases and haven’t had a new case in nine days, parents haven’t been pulling their kids out of child care at the same rate. And, even if they’ve been keeping them home, they’ve still been paying. That special circumstances fund that you’re adding on now to the Government baseline funding, plus the JobKeeper, plus the special circumstances fund – is the anticipation that that will make up entirely the shortfall that some of those operators we’ve been speaking to have been experiencing?
Tehan: Well, look, each circumstance will be different. The idea is to make sure that, yes, we, that every provider remains viable through the pandemic. That’s what it’s designed to do. And, that’s why, and you have to understand, when we announced this, we also announced that there would be a special circumstances fund. So, we knew that you would always get – when you put any system in place – that you always get some exceptions to the rule, or some differences that you’ve got to take account of. And, that’s obviously what’s happening in the NT.
Trevaskis: Have you been getting much feedback from the Northern Territory? Have you got a picture of how operators here have been affected?
Tehan: Look, your senator, your hardworking senator in the NT, Senator Sam McMahon, has been in touch with me around a couple of examples where there has been increased enrolments. And, so, I’ve said to her, ‘Absolutely, get them to put in for special circumstances and we will look at those cases.’ And, those special circumstances applications have begun, and we’re starting to look at them. But, can I say this, also, for all providers, what we did last week was we paid in arrears from the old system, plus gave them their first 50 per cent payment. And, this week we paid 50 per cent plus brought forward a payment from the end of the six-month cycle. So, they’ve got 100 per cent this week, as well, to help with cash flow issues. So, no provider should, at this stage, be out of pocket. And, what we’re doing is we’re working through the special circumstances while we have brought forward that 50 per cent payment. And, as I said last week, we had an arrears payment plus the first of the 50 per cent payments. And, that was done deliberately, so we can support the sector through this change. Understandably …
Trevaskis: … Minister, it sounds like, it’s starting to sound like – and this has been what all of the operators that we’ve spoken to – it’s starting to sound like a really complicated and convoluted system to keep those child care centres operating. And, the people we’re talking to – one major child care centre here in Darwin has closed on the advice that they’re not viable, or they’re hoping that with some of these additional measures, they’ll be able to reopen. These are small businesses who are trying to navigate their own way through this COVID-19 crisis. They’ve got kids and families that they look after, that they’re concerned about. They may have partners who are out of work themselves, and trying to juggle their home life. Did you consult with the sector about how you were going to throw out the old system and implement the new ones, to make something that would work? I mean, it’s such a complicated system that we’ve landed on it.
Tehan: So, we did consult, and it’s actually a very straightforward system. And, it was put in place because the sector asked for it, because their viability across the nation was starting to look in real and imminent danger. And, yes, we did consult with the sector, and we continue to have discussions with the family day care sector on this. One of the little bits of where we’re just trying to make them understand is the importance of JobKeeper and, as there seems to be a greater understanding of eligibility for JobKeeper, then it’s becoming clearer what this new system means for providers.
Trevaskis: Don’t operators have to have lost 30 per cent on their annual revenue or turnover from twelve months ago, to be eligible for the JobKeeper Payment? Has that been reviewed? How is that being managed?
Tehan: So, there’s been a decision which has been made, because of the change we made in the child care sector by going into this new model, that immediately qualifies all child care providers for JobKeeper.
Trevaskis: Regardless of their revenue 12 months ago?
Tehan: Regardless of their revenue 12 months ago. And, these are the things that we’re out explaining to the sector. For the vast majority of people …
Trevaskis: … Did you review that for …
Tehan: This is really important that I’m able to finish here …
Trevaskis: Of course, sorry. Go ahead.
Tehan: … because I need to be able to explain it so that people in the NT can understand. But, one of the things that it was designed to do was, because of the change of the system, there was that automatic qualification for JobKeeper, and that’s one of the things that we’ve been out explaining to the sector.
Trevaskis: Okay. I’ll let you repeat that too, so that we’re all clear. All child care centres are eligible for the JobKeeper Payment. Is that the message?
Tehan: Basically, as a result of the change that we made, that’s made them, the clear majority of the providers, eligible for JobKeeper. Now, there might be some circumstances where a provider is part of a broader business model, so, which might have an overall profit, might be overall profitable. So, we have to look at those ones individually. And, that’s why we’ve got the special circumstances. But, it pretty much, for every stand-alone child care provider, the change to the system triggers eligibility for JobKeeper.
Trevaskis: Will there be some instances where the baseline funding that the Government’s looking at, plus the JobKeeper Payment, like, are you still imagining that there will be some centres who experience a shortfall, and that the special circumstances fund will bring them back up to their previous funding arrangement? Or, are you expecting there might be some instances where child care centres are still left with a deficit?
Tehan: Well, we’ll look at all the individual circumstances through the special circumstances fund, and, obviously, there’ll be different ways we’ll approach it. If there has been, you know, people might have had 100 children enrolled in their day care, and then what we’ve seen is that’s gone to 120. Obviously, that’s a different circumstance for those that might have had 100, who might now be operating at 90. All these things will be taken into consideration, as we work through it. And, we’re looking already at the applications we’ve had for special circumstances – going back, where necessary, asking for additional information, clarifying that centres are eligible for JobKeeper when they might not have thought that they might have been. All this we’re working through with the system. And, the way the sector has been engaging with us, I’d like to thank all of them. Because, obviously, when you put a new system in place in the space of weeks, there is always some challenges. But, everyone has been very good in the way they’re working through it. Now, I’m going to have to go because I had the PM call at the start of this interview, and I better not keep him waiting too much longer. So, it’s been wonderful to talk to you, and …
Trevaskis: Dan Tehan, thank you for making the Prime Minister wait so that you could explain some of those details to Territorians. I’m sure they’ll appreciate it.
Tehan: Not a problem. And, can I thank all those people who work in the early childhood, early education space in the NT, for the wonderful job that they’re doing on behalf of the nation, caring and educating our children during this pandemic.
Trevaskis: Federal Education Minister Dan Tehan there. It’s complicated stuff, isn’t it? It’s really complicated, and I know the child care workers we’ve been talking to and the centre operators have had a really difficult time getting their heads around what this new system is. Dan Tehan, the Minister, he reckons this should be covering the costs of child care centres, even though those centres can no longer accept fees from parents. He’s expecting that this should work via three different buckets of funding – the Government baseline funding, plus the JobKeeper funding, plus special circumstances funding. He said it is not complicated, but I don’t know if you agree with that. I don’t agree with that. I think it sounds incredibly complicated, and for those child care sector workers that I’ve been talking to, that’s certainly what they’ve been expressing about making their way through this.