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"As a nation we must do everything to avert a disastrous child care industry collapse.  That can’t happen unless we radically rethink some of the highly complex structures of child care subsidies and legislation at a state and federal level"

Emma Walsh, CEO Parents At Work.

Impending disaster facing child care industry

Imagine having access to no child care or after school care, indefinitely?  It’s a very real prospect facing most parents bracing themselves for weeks of inevitable home caring and schooling.

For those parents desperately trying to work and keep their jobs whilst juggling caring for their children, the thought of going it alone even for a week or two feels incredibly overwhelming. This is especially so for those with young children unable to amuse themselves or self-learn without assistance.

But as COVID-19 spreads and child care centres and after school care shut their doors, what happens if, when we emerge from the crisis, they’re not there to reopen, closed permanently because they’ve been decimated by the impact of COVID-19?

The Child Care Industry – Current State of Play

Last week the Sydney Morning Herald painted a grim outlook for the child care industry reporting that the industry is facing collapse with four out of five childcare centres on the brink. The out of school hours care industry fears it may never recover.

Elizabeth Death, Chief Executive of Early Learning and Care Council of Australia warned: ‘more than 80 per cent of Australia’s early learning and care services are facing closure in the very near future and Australia wide we are looking at the potential of 150,000 job losses across the sector’.

Child care is not a ‘nice to have’ industry, it’s an essential service. Without sufficient child care operators, it will be difficult for our economy to rebound quickly and children and their families will suffer. How can everyone return to work when someone needs to stay home to care for the children? The impact of this may be felt for decades not just months.

There’s never been a more critical time than now for both government and employers to work alongside community child care and education leaders together on this. In particular, the eligibility and thresholds for child care rebates must be re-examined so it’s fairer and fit for purpose in a Covid-19 world.

Government Support

Whilst the government’s newly announced package is welcome, it may be a case of too little too late to save many operators and child care workers jobs long term.

The Government has agreed to assist families in financial distress with childcare expenses for up to 13 weeks and increased the number allowable absences from 42 to 62 days without losing their subsidy in a bid to stem the flow of withdrawals from centres. With JobKeeper payments not expected until May, industry experts warn these measures are not enough to contain the fallout.

As a nation we must do everything to avert a disastrous child care industry collapse.

That can’t happen unless we radically rethink some of the highly complex structures of child care subsidies and legislation at a state and federal level.

As Lisa Bryant, an advocate for education and care in Australia, explained in her article to the Guardian this week: “The childcare subsidy is a dog’s breakfast of rules and legislation. One of the last days that parliament sat, it passed changes to give the government some outs to this. But until services are actually closed, no funds are available. Services can’t even remove the gap fees for parents without committing fraud. The government opened a small grant program and now has to process over 14,000 applications. This won’t happen fast. There are ways for parents to claim higher subsidies, but these all involve myGov.”

“The JobKeeper subsidies announced will help some education and care services retain their educators, regardless of how many children continue to be enrolled. However, the reality is that many will have to close before these come into play. 82% of service providers only operate one service - and do so on slim margins with high rent. Many will close in the next few weeks.”

“COVID-19 has shown up the fact that the way we organise childcare in this country does not work. Changes will have to be made, including allowing employers to assist their employees more, possibly by measures such as removing the FBT impost. But by far a better change would be to make all education and care free for parents by funding services directly and guaranteeing each child a place. This is not that radical a suggestion. It is nothing more than what each child gets via our school system from the age of 5."

Encouraging employers to step-up

Employers have a role to play too in contributing to child care costs and it’s time we made that easier for everyone involved. The positive impact of employers being able to support working parents has for many years been proven - increased productivity, retention and engagement across the workforce.

As Bryant suggests, surely now is the time to review penalising tax treatment of child care contributions made by employers who are trying to do their bit to support workers as they struggle to work from home with kids. Child care provisioning by employers should not be judged as a perk. It’s simply not, and in a crisis, it’s a necessity.

The need for more Government and Employer backed child care support is a view shared by UNICEF which released its global statement on the need for family friendly work practices to battle Covid-10.

Nicole Breeze, Director of Australian Programs UNICEF Australia shared “Children are uniquely vulnerable, and risk becoming the forgotten victims of the crisis, and it is vital that Governments, businesses, and not for profit organisations take all possible steps to protect them from the most harmful impacts.”

“In new guidance released, UNICEF and the ILO are encouraging employers – many of whom are also under enormous pressure themselves – to consider the impact of their business decisions on workers’ families and to support social protection wherever possible. They enable workers to protect and care for themselves and their children and enhance workers’ productivity and sense of security.”

Government, business and child care industry experts and advocates must urgently rally together to reform the funding of child care before the existing model implodes with long lasting consequences.

Current and future generations of families are depending on it and frankly so is our economy.

For the latest on this issue, see ABC reporter Connor Duffy’s report

Written by Emma Walsh