IEU writes to Dan Tehan
The IEU wrote to Federal Education Minister Dan Tehan in May regarding our concerns that 'free childcare' will end abruptly at the end of June.
The IEU is concerned that enrolments will fall when we revert back to full fees because of drastic increases in unemployment and underemployment as a result of Coronavirus shutdowns.
The IEU pressed the minister to be mindful that many families have experienced a decline in household income due to workplace closures or reduced hours of work. IEU members have advised that a substantial number of families have indicated a return to full fees would cause them significant financial hardship at this time. If full fees are reinstated as early as July, some parents may need to give up their childcare places, potentially preventing them from returning to work or increasing their hours when their employer requests this.
The IEU requests that the federal government acknowledges the benefits of early childhood education and care to children, families and the broader economy (including improved productivity through enhanced workforce participation rates) by supporting the viability of the sector through a continued and increased commitment to investment in the critical early years.
Early childhood education and care is a vital support for all Australian families, and vulnerable families and children, who in particular, are in need of additional support at this stressful and uncertain time.
The activity test should continue to be suspended during the long-term economic recovery period. Reviewing the Child Care Subsidy would allow all stakeholders – providers, parents and the federal government – time to re-think the CCS to ensure all Australian children have the best start in life. To this end, the IEU believes that the Federal Government should provide at least two days of free early education and care in early learning services for every child. Additional early childhood education and care should be available to vulnerable families and children at no cost. If parents request more than two days per week the usual CCS formula based on parental income should apply to any additional days.
The IEU supports the Grattan Institute recommendation that the Federal Government subsidises 95% of childcare costs for low income and vulnerable family with the subsidy tapering as family income increases. This would assist parents wanting to increase their hours of work to do so, support post-crisis economic recovery and boost GDP through higher workforce participation.
As requests for enrolments in individual services increase, the childcare relief subsidy payment should be increased from the current 50% cap to 80% of the maximum hourly rate for the period that parents are not charged fees. This will enable providers to accept new enrolments on a financially viable basis.
The IEU welcomes an opportunity to meet with the minister to discuss the impact of the concerns raised by our members on their services.