SUBJECTS: Return to the Child Care Subsidy, JobKeeper, Protests
Patricia Karvelas: The Federal Government has confirmed it’s ending the free child care scheme on 12 July. The scheme was introduced in April, at the height of the coronavirus crisis, and was due to run for three months. This is a pretty significant change, and the Government has put in a sort of bridging funding, over $700 million, to try and deal with some of the issues. I spoke to the Education Minister Dan Tehan a little earlier.
Dan Tehan: Pleasure to be with you, Patricia.
Karvelas: On Friday, the Prime Minister guaranteed JobKeeper would last until September. You’re now removing it from the child care sector. Why are you breaking that guarantee?
Tehan: Well, we’re putting in place an employment guarantee for workers in the child care sector, as we change the system that we had in place to deal with the coronavirus pandemic. Two months ago, when the pandemic was at its height, we put in place a rescue package for the sector, because we were seeing mass unenrolments, and demand was collapsing. And, some said that the sector was on the verge of collapse. Now, over the last two months, 99 per cent of child care service providers have remained open, providing that important care and education for young Australians. And, now we’ve seen demand hit 74 per cent, from the latest survey that we’ve done of the sector. We need to now start transitioning the sector to be able to deal with this increased demand. And, that’s what this …
Karvelas: … Sure, but the Prime Minister did say just on Friday that JobKeeper would not be phased out. You are actually getting rid of it for this sector?
Tehan: Well, we’re putting in place a legal obligation that will replace it. And, what the Prime Minister said was that JobKeeper will stay in place for six months, that it was legislated to stay in place for six months, and it will stay in place for six months. But, we’ve always said that there would be a review, and that review is being undertaken at the moment. And, what we’re doing with the child care sector is putting in place transition arrangements that we think will provide the best, sustainable footing for the sector going forward.
Karvelas: So, you’re removing JobKeeper, but there’s this $780 [sic] million in total package. How does that compare to the amount that JobKeeper was delivering?
Tehan: It’s a $708 million package. Look, we’ve got to work through that, but we think that this will be less than what was being provided for JobKeeper. But, importantly …
Karvelas: … Do you know how much less? Sorry to interrupt, but do we know?
Tehan: No, we’re working through those calculations now. But, the most important thing, Patricia, is that in the discussions that I had with the sector, they saw the 25 per cent Transition Payment as a much more equitable and fairer way to be able to support all providers through this transition. So, that’s why we’ve gone with this Transition Payment of 25 per cent, because it means that everyone across the sector will be able to access it, and access it equitably.
Karvelas: Peak child care bodies sent you a consensus document two weeks ago. They say they didn’t hear back from you. None of their recommendations were adopted. And, they had no idea they were being kicked off JobKeeper. Who did you actually consult about this policy?
Tehan: So, I had broad consultations with the sector a couple of weeks ago. And, then, I’ve been in detailed discussions with people in the sector, as we’ve honed the arrangements that we would put in place. So, consultations have been occurring every two, three days, with people in the sector, as we put in place an arrangement that we think is fair and equitable to enable the sector to transition in this period where they’re seeing increased demand.
Karvelas: Do you acknowledge that the sector is not universally on board with this proposal?
Tehan: What I’ll acknowledge is that when it comes to the sector that, because there’s a broad array of different types of services being provided, that you’ll always get differing views. And, what I’ve tried to do is put in place an arrangement which works best for the whole of the sector, remembering that over 80 per cent of the sector are small businesses. So, obviously, trying to get uniformity right across the sector is difficult. But, I’ve worked consultatively with the sector to put in place this new arrangement. Having worked so hard to carry 99 per cent of providers through the pandemic, I want to make sure that the sector will continue to thrive, and thrive on a sustainable footing into the future.
Karvelas: Their key proposal was giving all families two days free or at a really low cost. Then beyond that, you’d have to pay. Why did you decide against that proposal?
Tehan: Well, the main feedback that I received, when I had broad consultations with the sector, was around the activity test. That’s why we’ve made the activity test changes. That was the thing that was uniformly put to me, and that’s why we worked very hard to make sure that those activity test changes are part of this transition. And, that’s one of the key reasons why we extended the relief package that we put in place into July, so that we could put in place the changes to the activity test.
Karvelas: The Greens say it will mostly be women who are forced out of work now, and that ending free child care is an anti-women move. Do you concede that this will actually have an effect on women more than it will for anyone else, both in the feminised workforce and the fact that women rely on child care to re-enter the workforce?
Tehan: Well, the Child Care Subsidy that we’re going back to, that was in place, has seen female participation in the workforce increase. So, it has helped female participation increase in the workforce, and that’s why we are going back to it, because it has provided affordable care, and has seen female participation in the workforce increase since it was put in place.
Karvelas: Will some child care providers hit the wall? Have you done any modelling or research into what will happen? Do you expect that some providers will have to close?
Tehan: Well, the biggest danger period and the biggest risk period that we had was, obviously, in the last two months. And, that’s why I remain confident that, if we continue to work with the sector, we’ll be able to carry the sector forward and put it on a sustainable footing. That’s why the payment, the Transition Payment, of 25 per cent has been put in place. If you have a look overseas at what’s happened to child care sectors in like countries to Australia, the pandemic, the coronavirus pandemic, has had a devastating impact on the sector. So, the fact that we’ve been able to carry 99 per cent of the sector through the worst of the coronavirus gives me great confidence. Nothing’s going to be easy over the coming months and the coming years, but it gives me great confidence that we’ll be able to work with the sector to keep them on a financially stable footing.
Karvelas: There’s been a 74 per cent, as you mentioned, participation rate in child care. Do you how much of that demand has been driven by the fact that parents haven’t had to pay for it?
Tehan: So, we’ve got various estimates. It’s very hard to gauge exactly what percentage that’s putting into demand. But, we think, how we’ve calibrated this new package, this transition package, will help deal with the fall of demand. That will result as a result of free child care ending on 12 July. As I’ve said, in particular, the changes we’ve made to the activity test, and, also, knowing that under the old system, when it comes to centre based care, 20 per cent of families approximately, paid $2 or less, and 70 per cent of families paid $5 an hour, per hour less. So, we think that what we’ve designed will enable demand to stay in the sector.
Karvelas: You’ve said you can’t guarantee demand won’t go backwards. Do you have any advice on how much demand could drop by?
Tehan: Look, what I’m confident of, is what we’ve done will keep demand in the sector. Now, whether we see a fall in numbers, obviously, that’s going to be part of the transition. It’s why we’re providing the assistance we are to the service providers. It’s why we’ve asked service providers to keep fees capped to that period for the fortnight before 2 March. All the things that we’ve put in place are designed to help us deal with what will happen to demand when free child care finishes on 12 July.
Karvelas: And, you’re changing the activity test, that you’ve been mentioning, to give families who’ve lost income 100 hours of subsidised care a fortnight. What’s the eligibility criteria, and what do they actually get?
Tehan: So, what they’re able to get is access to subsidised care, even if they’ve lost working hours, even if they’ve lost volunteering hours. And, this was one of the key things, right across the board, that the sector put to us – that this type of change to the activity test would make a huge difference when it comes to demand. That is why we’ve made this a key component of this package going forward.
Karvelas: Do you accept, though, that if the subsidised cost is still too expensive for families, that it won’t matter if they’re eligible for those extra hours?
Tehan: Well, of course, the subsidised costs comes down. That’s how the Child Care Subsidy is designed. The less income that you …
Karvelas: … Sure, but it’s not free.
Tehan: No, but as I’ve said, for families, 20 per cent pay no more than $2.50, $2 an hour. For 70 per cent of families, it’s no more than $5 an hour. Now, are the circumstances facing this nation ahead of us tough? Yes, they are. Have we worked to carry the child care sector through the pandemic? Yes, we have. Do we want to carry it now, as we transition, in a sustainable way? Yes, we do. And, that’s what this package is designed to do.
Karvelas: Minister, before I let you go, will you consider extending that change in the activity test beyond October?
Tehan: We’ve put this package in place for the next three months. That, from July 12. That’s, that’s what it’s designed do. So, what I want to do is make sure that this transition package that we’ve put in place, works, works for the sector, works for families, and that’s what I’ll be focused on over the coming weeks and months.
Karvelas: Just briefly, Minister, Mathias Cormann has criticised the protests, the Black Lives Matter protests. Self-indulgent, he has described them as, selfish. Do you share that view?
Tehan: What I would say to anyone who protest on the weekend, was, think about how far we’ve come in flattening the curve and dealing with the coronavirus. How we do not want a second wave. And, how listening to the expert medical advice has been absolutely key and central to that. What I would say, if you’re going to protest, do so in a way that isn’t going to endanger future lives, isn’t going to endanger future livelihoods, because everyone has made huge sacrifices for us to get where we are. People haven’t been able to go to the funerals of loved ones. People haven’t been able to visit elderly relatives in aged care facilities. People have had to, have lost their jobs, have seen their lives turned upside down. We can’t risk that now. Listening to the medical expert advice is absolutely essential going forward.
Karvelas: But, you understand why these people, particularly the Indigenous members of these protests, feel so upset, sad and angry at what’s happened in their own lives, in relation to incarceration rates?
Tehan: And, what they can do is stop and protest in a way that doesn’t endanger lives, that doesn’t put all the effort that’s been put into us defeating this coronavirus, put all that at risk. We saw that occur on Anzac Day, where we were able to commemorate the fallen in a way that still enabled people to be able to show their passion for remembering those who’ve fallen to keep us free. So, there are ways that you can protest, there are ways that you can demonstrate that doesn’t put livelihoods at risk, that doesn’t endanger all the hard work that’s gone into flattening the curve, and making Australia one of the global success stories when it comes to defeating this virus.
Karvelas: Minister, thanks for joining us.
Tehan: Thanks, Patricia.