Australian government to end free childcare on 12 July in move Labor says 'will snap families'
Families will have to pay childcare fees again from 13 July as the Australian government moves to end the emergency relief package introduced at the height of the coronavirus crisis.
It has prompted warnings from Labor and the Greens that the reintroduction of fees may push childcare out of the reach of struggling families at a time when economic conditions remain tough.
The government has also revealed it will stop paying the economy-wide jobkeeper wage subsidy to childcare services from 20 July, replacing this with a total of $708m in transition payments that it concedes may be less than the amount the sector would have received under jobkeeper.
This shift has sparked opposition claims of a broken promise, because Scott Morrison told reporters last week the jobkeeper scheme had been legislated to apply for six months “and people can count on that”.
Asked in general terms to guarantee jobkeeper would be there until the end of September, the prime minister said on Friday: “Yes.” In response to an earlier question, though, he kept the door open to amendments to the scheme as a result of a coming review – in line with longstanding signals that it could be adjusted to provide more targeted support.
Announcing the childcare changes on Monday, the education minister, Dan Tehan, said the temporary relief package introduced in early April had “done its job and would be turned off on 12 July”, with the old childcare subsidy system returning the following day.
This mean centres will be able to charge parents fees again from 13 July and the government will resume paying the childcare subsidy – with the latter funding estimated to be worth about $2bn this quarter.
But in return for new transition payments between July and late September, childcare services will be temporarily banned from increasing their fees above the level they were in late February. Services will also “need to guarantee employment levels to protect staff who will move off the jobkeeper payment”.
The previous activity test will also be eased until 4 October, supporting eligible families whose employment has been affected by Covid-19. “These families will receive up to 100 hours per fortnight of subsidised care during this period,” the government said in a statement.
At a media conference in Canberra on Monday, Tehan was pressed repeatedly on whether parents would be able to afford a return to childcare fees given the broader economic challenges, amid fears unemployment would peak at around 10%.
Tehan could not guarantee demand would hold up after the reintroduction of fees, but said the government had “done everything we can to support the sector transition” and pointed to the activity test changes as an important way to help parents who had lost work.
Tehan said that with attendance levels now at 75%, it was no longer appropriate to keep in place a temporary relief package designed for earlier in the pandemic when demand was “collapsing”.
But Labor’s early childhood education and development spokeswoman, Amanda Rishworth, said the snap back to the old childcare arrangements “will snap families” and “could well act as a hand brake on the economy”.
“I have great concerns that parents will be sitting around their kitchen tables doing the maths and working out that childcare will just be too expensive for them,” she said.
The Greens senator Mehreen Faruqi said ending free childcare was a “betrayal of Australian families” and “an anti-women move” because it would mostly be women who were forced out of work.
The $708m earmarked for transition payments will be split among all childcare services between July and September, at the rate of 25% of their fee revenue from late February.
This “replaces jobkeeper” – the $1,500 per worker fortnightly subsidy – for the childcare sector, following longstanding concerns about gaps in eligibility, including centres run by big charities or councils, or those that employ short-term casuals and visa holders.
Tehan conceded the total transition funding would “probably be a tiny bit less than what jobkeeper would be”, but said the sector had argued the change “spreads more equitably the support right across the sector”.