Free childcare plan backfires
Prime Minister Scott Morrison unveiled his groundbreaking free childcare plan just days ago - but major cracks are already starting to appear.
Mr Morrison revealed his plan to help working parents during the coronavirus pandemic at a press conference last week, explaining that around one million families would be eligible for free childcare.
At the time, he said anyone who still had a job was considered "essential" and that childcare was also an essential service as it allowed parents to continue working and helping the economy.
Under the plan, the Government will pay 50 per cent of the sector's fee revenue up to the existing hourly rate cap based on a point in time before parents started withdrawing their children in large numbers as a result of COVID-19, but only so long as services remain open and do not charge families for care.
The funding will apply from April 6 based on the number of children who were in care during the fortnight leading into March 2, whether or not they are attending services.
The means and activity-testing of fee subsidies will be dropped while the new system is in place.
Centres must also seek to re-enrol children who have been withdrawn, to make sure parents can keep places if they need them once the crisis is passed.
"If you have a job in this economy then that is an essential job, in my view, in terms of running of the economy and it is important that all of those parents who have children, that they get access to child care and those facilities will be there for them in the many months ahead," Mr Morrison said.
"What we will be doing is we will be ensuring for those parents who are still in that position where they are needing that child care, it will be free.
"We will be putting in place support arrangements to childcare facilities, some 13,000 of them, to ensure they remain open and be there for their parents to ensure they can do what they need to do each day."
But this week, Sydney childcare centres announced plans to close as the government scheme was not financially viable.
That's because local councils do not qualify for the JobKeeper wage subsidy - which guarantees $1500 a fortnight for eligible workers - meaning council-run centres were feeling the pinch.
Cumberland City Council in Sydney's west announced it would temporarily close 17 of its early education and child care centres in two weeks, "unless additional financial support is provided to supplement payments under the Early Childhood Education and Care Relief Package".
"As part of the package announced last week, the Federal Government will pay 50 per cent of the sector's fee revenue up to the existing hourly rate cap but under the condition that services remain open and do not charge families for care," a notice on the council's website explained.
"Council is not eligible to participate in the JobKeeper program and will continue to pay staff salaries and all operating costs while faced with a 50 per cent decline in revenue."
Mayor Steve Christou said the council supported government efforts to support families, but described the childcare plan as a "devastating blow" to its early education centres and their 150-strong team.
"As Councils are not eligible to participate in the JobKeeper program, we are facing a situation where families will not pay fees and Council-run centres will not receive the previous Child Care Subsidy," he said.
He said the council had written to the Federal Treasurer, Federal Education Minister and NSW State Education Minister to explain its concerns, but had been met with "radio silence".
As a result, the council had "no choice" but to close centres.
Sydney's Georges River Council has also confirmed it would close two centres and reduce the open days of another, and was also reviewing the continuation of all centres.
"While for-profit centres are eligible for the $1500 per fortnight JobKeeper payment for each staff member, in addition to the new childcare funding, local government is not eligible for that money," Mayor Kevin Greene said.
"Without access to the JobKeeper payment, the funding package fails to cover the costs of keeping childcare centres open.
"We have also been experiencing a steep decline in attendance as more parents remove their children from childcare centres because of this pandemic. We are devastated that we can no longer continue to provide care at all our centres."
Education Minister Dan Tehan said he was aware of concerns raised by councils and was looking into the issue.
"Australia's childcare centres were experiencing mass withdrawals which threatened their ability to provide care and continuity of education, particularly to the children of essential workers," Mr Tehan said.
"In response, our Government introduced a new system to ensure families could still access childcare while also ensuring the viability of services.
"We have heard the concerns raised about services run by local councils, and we continue to work on this issue. We will provide more advice as soon as possible."
News.com.au contacted the NSW State Government for comment.
Originally published as Free childcare plan backfires