SUBJECTS: Early Childhood Education and Care Relief Package
Russell Woolf: We’ve been speaking quite a lot about some problems in the child care centre, sector, sorry, after the Federal Government made child care free for all parents who need it. It was, of course, welcome news for an industry on the brink, as people pulled their kids out of day care. But, the policy had some unintended consequences for some centres, and the parents who still need them. The changes abolished the money facilities received through the Commonwealth’s Child Care Subsidy, and replaced it with a weekly payment that’s roughly half of what they were earning before coronavirus.
Nadia Mitsopoulos: So, for centres who lost half their business, it’s been great. But, for those who didn’t lose business, a 50 per cent payment means they’re struggling to remain open, reducing staff hours, and also having to reduce places for children. And, parents are not allowed to make a co-payment to top up the gap, even though there’s quite a few parents that wanted to. And, it has left people, mums like Susie, with a very difficult choice to make.
Susie: So, in mid-March, we took her out of child care and continued to pay our regular co-payment to keep her place. We requested a return two weeks ago and have been offered only one of our three days back, because our child care centre cannot afford to take her back, both based on their smaller and reduced number of staff, and the fact that the Government is paying them $5.99 per hour per child. I said to my centre, ‘How do I pay you?’ And, they said, ‘Susie, we cannot legally take that money from you.’
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Mitsopoulos: Yeah. That’s Susie. So, you see the problem. Well, Dan Tehan is the Federal Education Minister, who has finally made some time – and we’re grateful for that – to join us on Breakfast. Minister, good morning, and thank you for your time.
Dan Tehan: Pleasure, Nadia.
Mitsopoulos: Parents like Susie are telling us that all they want to do is be allowed to make a co-payment, and get their child into a day care centre. Why will you not allow that?
Tehan: Because, the way that the system was designed – and, we put in place a new system and we put the old system on hold, because parents were withdrawing their children from day care, and what we were seeing, or from child care, and what we were seeing was a potential collapse in the system – so, what we designed, the new system, was that we would provide 50 per cent flat payment to child care centres, based on a fortnightly figure that we calculated before COVID-19 impacted this country. Plus, we calibrated it with JobKeeper. Now, you have to understand that 60 per cent of a child care’s costs is its labour. So, combined, between the 50 per cent payment plus JobKeeper, we were confident that that would put a very good ballast into the child care system, and enable the system to be able to get through that six months, or three to six months, of COVID-19. Now, when we put this new system in place, it did what we were expecting it to do. We now have 96 per cent of all providers still open and still operating, which was the outcome that we wanted to see. But, we always knew that there would be some instances, for instance, because JobKeeper, as you know, is just being finalised now, and just, the payments are just starting to roll out for the first time, there would be some unintended consequences. That’s why we put a one-month review process in place, and that one-month review process is being undertaken right now. And, it’s these types of examples that we will be looking at, as part of this review process, to see what else we need to do.
Woolf: So, as you say, Minister, there, then, more than 70 per cent of early childhood workers, they don’t qualify for the JobKeeper, because they’re casual or part-time. So, they’re ineligible. Is that now part of the review? So, within the month, you will relook at that and, hopefully, have a response that satisfies them?
Tehan: That’s right, Russell. So, one of the things that we will be looking at as part of this review is that, because it was calibrated with JobKeeper, if we’ve got certain centres where, for instance, 70 per cent of their staff aren’t eligible for JobKeeper, then this is something that we want to look at. And, what I would say to all those providers out there who are listening this morning, if you’ve got examples that you can feed into this review process, that would be very helpful. Because, in calibrating with the JobKeeper, obviously, we wanted to ensure that there was a balance, knowing that 60 per cent of the costs come from employing people. And, given that, we knew by, that putting this system in place, on the whole, everyone across the sector would be eligible for JobKeeper. So, there’s no question about eligibility. It’s just a question about whether those workers meet the eligibility requirements for JobKeeper itself, and that’s something that we now want to look at as part of this one-month review.
Mitsopoulos: Our guest is the Federal Education Minister Dan Tehan, just talking about some of the issues that have arisen in the child care sector as a result of a change in the way that’s been funded, to get the industry through the coronavirus pandemic. So, with that review, though, would you then, I mean, now that JobKeeper Payments will start to come through, are you expecting that some of those child care centres will now be able to open up more places, because that’s the other thing. You’ve got centres who could, say, normally take 80 or 90 kids, who are saying, ‘I can only take 40 or 50 because I can’t afford.’ We’ve heard from some saying they’d be making a $10,000 or $20,000 loss a month. Are you expecting that JobKeeper would alleviate that problem?
Tehan: Yes, it was always calibrated with JobKeeper. So, what we want to be able to look at and see is, okay, what impact has JobKeeper had to alleviate some of these concerns? And, then, if there are particular centres where eligibility for JobKeeper, for one reason or another – it might be because they’ve been using staff who aren’t permanent residents, or are here on temporary visas – then, we’ve got to then have a look and see, okay, well, what mechanisms do we need to put in place in that regard? So, that is all very much part of the one-month review process.
Mitsopoulos: And, would you consider allowing a co-payment? That’s what parents want to know today.
Tehan: Well, look, we want to do the review first. We have to look and see, okay, what is happening? What are the impacts? What I would love to hear from, as I said, is for those providers, to make sure they feed in their examples as part of this review, and therefore make decisions. Obviously, the old system, the way that, under the previous subsidy, there was a co-payment under that system. So, this will be something that will be looked at, as part of this review. All along, what we’ve wanted to do is make sure that we kept as much of the sector operational through COVID-19. And, we’ve been able to achieve that, with 96 per cent as our, is the figure that we have, of centres right across the nation, still open and operating. Now, through this one-month review, we want to see, okay, what are the unintended consequences? And, remembering that we set up a special circumstances fund, to enable us to be able to deal with these types of examples.
Woolf: We’re talking to Federal Education Minister Dan Tehan on ABC Radio Perth and WA. Nadia Mitsopoulos and Russell Woolf with you. Minister, until, then, the review process is completed, the Education Department is processing almost 860 applications for exceptional circumstances payments. Who qualifies for that top-up?
Tehan: Well, there’s certain criteria for that top-up that we’ve put in place, and that’s been detailed. So, it might be, for instance, we’ve got some centres who haven’t at all been able to qualify for JobKeeper. So, we’ve obviously made an exception for them, because they couldn’t qualify for JobKeeper at all. And, then, there have been a certain other, some centres, for instance, have seen extra enrolment since the fortnight that we calculated our payment on, which was the fortnight before 2 March. So, some centres, even though the majority of centres were received, were seeing children being pulled out of centres, there were some centres who have seen extra demands. So, obviously, we’ve moved to provide additional funding for them. So, and we will still work through how special, these special circumstances fund is going to work, over the coming weeks, as we do this review.
Woolf: Minister, families who are experiencing free child care for the very first time are probably wondering how long it’s going to last. Can you answer that?
Tehan: Well, we obviously said that we would do this one-month review. We’ve put it in place for three months, and, then, we will look and see whether we would extend for another three months. So, all these things are very much balancing acts. Obviously, the reason why we provided it free, and wanted to provide it free, was we wanted to ensure that those essential workers, in particular, and vulnerable children, would still be able to get access to the care and education they needed during the pandemic. Now, obviously, we’ve flattened the curve, you know, quite successfully, and, we hope we’ll be able to continue to do that. And, we’ve seen demand, as a result, increase again. And, I’m sure that we’re going to continue to see that, as we see restrictions eased, and we continue to flatten the curve. So, these are all things that we will weigh up over the coming weeks and the coming months.
Mitsopoulos: Dan Tehan, I really appreciate your time this morning.
Tehan: It’s been a pleasure. Thanks for having me on.
Mitsopoulos: That’s the Federal Education Minister.