Childcare Sector Critical to Recovery

Those who know me well know that I am a passionate advocate for early childhood education and quality childcare.

It is critical that everyone has access to these services and that they are affordable. During the pandemic the childcare sector has provided certainty to essential workers who rely on childcare, as well as continuity and safety for vulnerable children. It was necessary for the Federal Government to ensure this sector remained financially viable via COVID-19 funding, however, the funding package was severely flawed and hindered, rather than helped, many centres.

Despite this, I was dismayed to see the Federal Government’s announcement that they were winding back funding for this sector. Free childcare ended on July 12 and the JobKeeper wage subsidy ended for employees in the childcare sector on Monday July 20. With a sharp rise in unemployment expected, the impact will be particularly harsh on women, many of whom will see a decrease in paid work and some forced out of the labour market altogether. This will translate to many more families being unable to afford childcare.

While some transitional relief has been provided for people who are unemployed because of COVID, the 'snap-back' to the old system hasn't solved the problems of the old system of gap fees. Only in 2018 we were told the Government had introduced once in a generation reforms that would drive down the cost of childcare with a new subsidy system. Then last year there was a 6% increase nationally in child care fees, taking the cumulative national increase under the coalition to around 28% to 34% over the last seven years (depending on your region).

Despite a 140% increase in funding, families spend a whopping 27% of their income on childcare and early education. Furthermore, thousands of families are still waiting for payments owed to them under the childcare subsidy scheme introduced in 2018.

Minister Tehan no longer boasts about cheaper early childhood care and education. The snap-back system is broken and needs to be radically reshaped.

The Coalition government has no real commitment to the sector. Currently the Commonwealth helps fund 4 -year- old kinder but have only extended that funding on a year by year basis. The word is that in the delayed October budget they will not renew the funding for 2021, leaving it to the Victorian government which not only funds 15 hours of 4 -year- old kinder, but is rolling out funded 3- year- old kinder across the state (to be completed by 2022). The Coalition argues that there is no role for the federal government in pre-school education. I think that is a nonsense. International research tells us that every year of pre-school means a much better adjusted and successful primary student.

It is more important than ever to provide accessible and affordable childcare to all families. We know family violence and mental health issues are on the rise during this pandemic. All children need a safe place to continue playing, socializing, learning and developing. It’s in children’s best interests, especially vulnerable children, to remain engaged in an early childhood service. With the Federal government cancelling free child care for families and JobKeeper for childcare workers, there is a real danger that thousands of children will be locked out of childcare services.

The early childhood sector is a diverse and complex group, with a range of service types, geographic locations, business models and community networks. There are differing views within the sector about the government’s COVID-19 funding package. Some benefited from it, however, I have spoken to many centres that were adversely affected. It forced some to reduce staff, cut their opening hours, deny care to new families or cancel existing enrolments to remain financially viable. The funding package restricted providers to 50 per cent of their revenue and for those that were eligible, JobKeeper wage subsidies for their staff. What the Federal Government called “free childcare” was actually not free, as there was a gap between the subsidy and the fees parents usually pay to keep centres viable.

Now the funding is being turned off and JobKeeper will no longer be available, leaving the childcare sector even more vulnerable. It is clear that the Morrison government does not value the childcare sector, despite calling workers in this profession “essential workers”. The chaotic, dysfunctional COVID-19 policy of the Morrison government put thousands of childcare providers in a precarious position and created barriers for parents trying to access quality childcare for their children. Now the COVID-19 funding that was provided to help families access free childcare is being switched off suddenly, when it requires a slow transition to reduce further shock to the sector.

The Front Project, an advocacy group for the sector says that early childhood and care centres play a key role in driving our economy, with research showing that investments in early learning deliver in two important ways:

• by driving prosperity in enabling workforce participation, and;
• by educating the workforce of the future.

"Investing in quality early childhood education is one of the smartest investments a government can make. Not only is early learning critical for children’s development, it has been shown to deliver two dollars back to the Australian economy for every dollar invested." The current crisis is highlighting just how important this sector is to our economy. As thousands of people transition to working from home, employers are realizing how critical childcare services are to ensure their employees’ productivity.

The COVID-19 package announced by the government as a lifeline to the sector was ill-conceived and damaging to many childcare providers. The sector has been undervalued and underfunded for too long. We need to do better: the welfare of our children depends on high-quality, accessible and affordable childcare for all. I firmly believe that every child deserves the benefit of high- quality childcare regardless of where they live, their family origin or their family’s capacity to pay. I will continue to work hard to advocate that the government provides long- term, stable funding to early childhood education into the future: it is a sector that requires significant reform and the future of Australia depends on it.

To read more about the work of the Front Project, please click here. You can find out more about Early Childhood Australia on their website.

This story was originally published in Libby's July Newsletter. Please click here to subscribe to the email newsletter.