Doorstop – child care snap-back

Monday, 13 July 2020

AMANDA RISHWORTH, SHADOW MINISTER FOR EARLY CHILDHOOD EDUCATION AND DEVELOPMENT: Well we are now on the eve of the Morrison Government’s snap-back to their old child care system, and of course what we know is many parents are really doing it tough and are going to have to make the difficult decision tomorrow of whether they pay the exorbitant child care fees or look at pulling their children out of care all together. This is bad news for families, and at the worst time when families need support.

I’ve been inundated by concerned parents. Parents that are on JobKeeper for example, hoping that their jobs will come back in September, October, November, December, and are not able to pay child care fees, but are not wanting to withdraw their children from care in case they get the opportunity to go back to work.

We know that centres are worried about their viability. The pandemic is far from over. In Victoria, we have many families now withdrawing their children from child care and many providers very worried about their future. Cancelling JobKeeper from this sector is a big blow and charging full fees back onto families will also have a big impact.

It’s time the government realises that we are not back into a pre-pandemic economy, that our economy is struggling and parents out there are struggling as well. It’s time they gave serious consideration to ensuring that the child care sector is viable, that children get access to early education and care, and importantly that parents have access to affordable child care. If they don’t, this will be a real handbrake on the economy with parents having to make the difficult choice: do they take the extra hours, do they take work when it comes available, or is it just too costly because child care costs are just too great?

The Morrison government needs to act. This is the wrong time to be ripping support from families and from the child care sector.

REPORTER: The government has made concessions to Victoria. Why should the other states get the same support if they’re not getting the same outbreaks?

RISHWORTH: What the government has done in Victoria is say that parents don’t have to get charged the gap fee if their children don’t go to care. That is far from supporting parents at a time when they might have lost their jobs or not be getting any income at all. It’s not the right time when people, parents in particular, are relying on JobKeeper, because it still involves costs for families if they do turn up to work or if they do turn up to child care. And for the centres it’s unclear if a large number of children un-enrol or do not turn up, whether that’s enough to keep the centres going. Of course the government has also decided to rip JobKeeper away from early educators, which puts the centres in a very precarious position.

REPORTER: Is it really sustainable to continue government support?

RISHWORTH: Well look, the government has to make a choice here. They are choosing to support many other industries, they are choosing to do industry packages to support many different groups within our community, but the one group they’ve ripped JobKeeper off is early educators. And of course what they’ve done is snap-back to the full pre-pandemic child care system with the high fees that go along with it.

There were many families struggling to pay fees before this pandemic hit, but with so many families either out of work or relying on JobKeeper or JobSeeker, it’s simply unrealistic that parents are going to fork out this amount of money for child care or indeed kindy. So it is a big problem and the government should be looking at how best they can provide extra support for the sector.

REPORTER: The support is being taken off in a transition period, isn’t that reasonable?

RISHWORTH: There is extra support for providers, but there’s no extra support for families. The fee structure that the government has snapped back to is the exact same fee structure before the pandemic.

We know that fees had been increasing significantly – 7 percent in the last recorded year. So we know that fees were far outstripping the rebates parents were getting, so the government really needs to look seriously at this. Because this isn’t just about support for families – that is a big part of it – but it is also about enabling people to take work as this pandemic eases in some places in the country. This is about supporting women in particular,  and also families, to be able to take the hours of work they need.

In Victoria it’s become very clear that the pandemic has not subsided, we still have a crisis on our hands, and therefore we need to make sure that for those families that need early education and care they can get it, but in other parts of the country where those families are looking at how they can return to work, that child care is affordable for them.

REPORTER: Are you wanting the government to continue the so-called free child care for another three months? What exactly is Labor calling for?

RISHWORTH: There were problems with the government’s so-called free child care, because of course what they were doing is they weren’t paying for it – they were actually relying on services and providers to subsidise it. So what we’d like the government to do is to have a serious look at how they can support families in a better way. There’s a range of options on the table and it’s up to the government with all the ability of their modelling to be able to look at that.

But for example, could there be more support for those on JobSeeker and JobKeeper rather than the snap-back that we’re seeing? Are we able to have a look at a better percentages for families? Or is there a period that we can provide free child care while properly remunerating services for providing that free childcare? So there’s a number of options on the table and a number of ways we can better support families, but what the government’s done is just snap-back to the old system which was designed for an environment where there was high employment and high wages, not an economy now where we have people struggling to try and find jobs, and of course many people who have had to take a cut in wages and a cut in income.

REPORTER: Do you have any estimate as to how many families will actually pull their children out of child care with the resumption of the child care subsidy system?

RISHWORTH: There’s been varying estimates, there’s been different organisations doing surveys. There’s been reports of up to 33 to 40 percent of families either withdrawing all together or reducing their hours of early education and care,. There’s been a range of different reports saying that up to 50 percent of families will adjust their early education and care because it’s simply not affordable. So what we’re looking at is potentially a significant change in demand.

It’s unfortunate that before the government brought the new child care system back into place, they themselves have not done any modelling. We know that the services were only up to 75 percent in occupancy, that’s the government’s own release of figures, and this was before ‘free child care’ was taken away. So there has been no modelling by the government on the impact on demand, but certainly services are very, very worried, not just in Victoria, but around the country about children pulling out altogether or indeed reducing their hours significantly.

REPORTER: We’re seeing today, we know that the JobSeeker payment is due to be halved and JobKeeper due to end in September, the government working on finalising the details ahead of July 23. What will six million Australians standing in unemployment queues receiving unemployment benefits, what do you think the government should be doing for those people after September?

RISHWORTH: The first thing I think the government should be doing is to not demonise these people.

We know that the government has tried to infer that there’s work out there if only they put their minds to it. Of course what we know is that for every one job there’s 12 or 13 people looking for a job or are unemployed, so the government really shouldn’t first of all be somehow suggesting that these people are not looking for work. There’s not work out there, anyone can see it.

But I think the real concern for me and for Labor is that if we snap-back, like we have in child care, snap-back to the old rate of Newstart, snap-back and withdraw JobKeeper, what’s going to happen is not only are there going to be a lot of people struggling, but there’s going to be a big hit to the economy. We know that people on JobSeeker at the moment are spending the full amount, whether that’s on their mortgage, on groceries, on all those life essentials, and if the government withdraws this support in a snap-back way our economy itself is going to flounder.

So we call on the government to be extremely cautious and not to have a set time frame of snapping back to the old Newstart, which we know was inadequate before, and also of ripping away JobKeeper at a prescribed date. We know that this will have a disastrous impact on the economy, but also on the individuals that are relying on it.

The jobs just aren’t out there and if the government thinks that, as they’ve done with child care, that we’re all back to normal, that things are rosy, then they’re misguided.

REPORTER: What should the rate be then?  Its just over $1100, taking it back to the original would be $550. There’s been calls for somewhere in the middle round about $750/$800 mark, whats enough to live on then?

RISHWORTH: Well that’s a matter for the government, they’ve got all the benefits of Treasury to actually crunch the numbers. We know many organisations, not just social service organisations but business organisations, have regularly called for the old Newstart rate to be lifted. We know it was inadequate, and that is a matter for the government to carefully look at this.
But there’s a lot of confusion coming from the government. At first they said they were going to increase it, then Scott Morrison said there’s work for people if they want it – which is clearly not the case . So there’s a lot of confusion out there at the moment about what the government’s plan is. We’re happy to work with the government on what a sustainable amount might be, but it’s clear that the current amount is not enough and if you rip that away prematurely, as with the JobKeeper payment, it’s not only going to have a disastrous impact on those individuals relying on it, that can’t get a job and that desperately want to work, but it’s also going to have a big impact on the economy.


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