Childcare providers suffer financial fallout of free childcare relief package as parents struggle to find carers

Photo by Jordan Rowland on Unsplash

Key points:

  • One Brisbane mother has had her 13-month-old twins on a waiting list at a childcare centre for almost a year
  • Jana Walker says the Federal Government’s childcare relief package has been financially crippling for her centre
  • She says centres will inevitably have to increase their fees when the scheme ends

Brisbane mother Melissa Martino would love to return to work after taking maternity leave but can’t find childcare spots for her children.

Ms Martino has had her 13-month-old twins on a childcare waiting list for nearly a year.

Now ready to return to work part-time at her Brisbane podiatry practice, Ms Martino was told the spots she had booked in no longer existed because her local centre has had to shed staff.

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“They’ve unfortunately had to reduce their staffing capacity, which means they’ve had to reduce how many children they can look after,” Ms Martino said.

“And they’ve got a responsibility to try and bring the children that have been staying at home back into the centre, before they can consider our children.”

Ms Martino said her family had no choice but to accept that they had been put to the back of the queue.

“It puts a bit of a strain on us because we are one person down in the business, and so obviously then my family misses out on an income because I’m not working,” she said.

Children playing at a childcare centre

Not all childcare centres reported a significant drop in enrolments during the height of the pandemic. Image by Erich Westendarp from Pixabay

‘Every day we open we go into debt’

Seven weeks ago the childcare sector was in crisis as the threat of coronavirus saw parents withdraw their kids from care in large numbers.

It prompted the Federal Government to act — introducing the Early Childhood Education and Care Relief Package.

Alongside Australia’s success in flattening the infection rate of COVID-19 and the offer of free childcare, many childcare centres have been inundated with families wanting childcare.

Under the relief package that has been in place since April 6, the Federal Government pays 50 per cent of a centre’s fee revenue, based on what they earned between February 17 and March 2.

Some centres have applauded the scheme for saving their business, but for Timber Tots owner Jana Walker, the scheme has been financially crippling.

Ms Walker runs a popular childcare centre in Brisbane’s inner east and said her business never experienced a drop in demand, so in reality, the relief package meant a government-mandated drop in income.

“Every day that we open, we go into debt,” Ms Walker said.

“We’ve had to reduce the hours by about four hours every day to make it work for the loss of income that we’ve had to deal with.”

Ms Walker said that she had been told by staff at the Department of Education, Skills and Employment, who administer the scheme, that she may have her funding removed altogether if she continued to operate with reduced hours.

Spike in childcare costs ‘inevitable’

“It’s really hard when you’re doing the best you can to be told that no, you can’t do that, either,” she said.

“Most centres look like they’re doing OK but that’s only because we have to stay open, otherwise we lose our funding.

“If you close you just lose everything, and that’s worse for you — so it’s a double-edged sword,” she said.

A group of children's shoes on a mat

Some parents who are wanting to return to work have been unable to find a childcare spot. Image by sathyatripodi from Pixabay

Ms Walker said childcare fees will inevitably be increased when the Government’s Care Relief Package expires, as centres will need to counteract the financial hit.

“I’ve already had families asking what will be the price change,” Ms Walker said.

I think that’s going to be something many families are going to have to watch now, because many centres are going to have to recover from this one way or another.

“So, yes, free childcare has been great for some, but it’s also got another impact coming later when centres are going to have to try and recover.”

Government says relief scheme has saved sector

In a statement, Minister for Education Dan Tehan said the Government’s four-week review found the relief package had been successful in its objectives.

Mr Tehan said centres were expected to remain open and provide free childcare — prioritising care to the children of essential workers, vulnerable children and children whose families have an existing relationship with the service.

Opposition spokeswoman for early childhood education Amanda Rishworth said the scheme had proven to be too inflexible and financially damaging to smaller operators.

“I’m hearing a lot, particularly from small centres and centres that don’t have a lot of cash reserves, that they just can’t take any more children on, because they’re making a loss and they’re having to stand down educators now,” Ms Rishworth said.

“They don’t get any more money as the number of children increases, it’s a set amount, and that only stretches so far, so it has caused a lot of confusion out there.”

Line chart showing Australia's current Covid-19 growth factor of 0.97 as of May 12, 2020

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