Will child care ‘snap back’ from COVID-19?

In partnership with the National Foundation for Australian Women (@NFAWomen), we are running a series of pieces that analyse how the Covid-19 pandemic is differentially impacting on women. In today’s piece, Marie Coleman[1] (@MarieCo92176893) examines the situation surrounding early childhood education and child care, and considerations for families, governments, providers/services coming out of the pandemic.

 ‘…There is a snap back there, a snap back to the previous existing arrangements on the other side of this. And so there is an intensity of expenditure during this period. And then we have to get back to what it was like before. And then we have to deal with the burden that will be carried out of this period of time. And on the last matter, well we put the freezes in place…’ – Prime Minister Scott Morrison, 2 April 2020

The Prime Minister’s comments at his 2 April 2020 press conference about ‘snapping back’ to pre COVID‑19 pandemic arrangements should give us pause for thought when it comes to child care.

Many families will be considering their child care arrangements as they go back to work, or start the difficult process of looking for work again.

Some families have continued to use child care during the pandemic and are grateful for the free child care that the Australian Government’s Early Childhood Education and Care Relief Package has provided. Others have kept their children at home out of concern for the spread of the virus, but are counting on having a place when they return to work.

It has been a very worrying time for families, including financially and socially, and they are keen for things to get back to normal. But will things ‘snap back’ to normal for their early childhood education and care arrangements?

How the pandemic has impacted child care providers

There’s no doubt the COVID-19 situation has also been very difficult for child care providers and services.

Even though child care was deemed an ‘essential service’ by the Australian Government, the sector has been operating under significant financial constraints owing to reductions in attendance and child care payments under the Australian Government’s Relief Package. Weekly payments under the Package are approximately 50 per cent of services' fee revenue, or 50 per cent of the existing hourly rate cap, whichever is lower, for sessions of care in the fortnight preceding 2 March 2020.

Some services are struggling to stay in operation. Many services have experienced a significant loss of income through the 50 per cent payments. In some cases, services have been able to apply for the JobKeeper initiative to support their workforce or apply for an Australian Government Exceptional Circumstance Supplementary payment, while others have not been eligible for these payments. Changes announced on 5 April 2020 to the JobKeeper rules for charities meant that Goodstart Early Learning, Australia’s largest not-for-profit child care provider, and others registered with the national regulator, are now eligible to apply for JobKeeper payments.

What will child care look like in the near future? Photo by Tanaphong Toochinda on Unsplash

The situation for providers and services is being monitored by the Australian Government through a review of the Relief Package, one month into its operation, and by peak organisations such as Early Childhood Australia. The Relief Package is due to operate for three months in the first instance until the end of June 2020, but what happens after that is not so clear. Federal Minister Dan Tehan has indicated the Government is unlikely to extend its free child care beyond the end of June as demand for child care places is rising faster than anticipated with the return of parents to work. Yet nationwide, demand for child care is currently only 60 per cent of normal capacity and services are navigating challenging circumstances.

The importance of child care viability for women’s workforce participation

One thing that is clear is that the viability of the sector and affordability of early education and care in Australia are of paramount importance as the economy opens up.

More government support may be required for child care providers and services to deal with the unintended consequences of disrupted supply and demand and the attendant income shortages. Ongoing assistance for services in exceptional circumstances and business continuity payments are likely to be needed.

For families, too, there are a number of possible scenarios. Hopefully they will be able to resume their previous child care arrangements and afford any gap fees payable when the Government’s Child Care Subsidy (CCS) system resumes. But it’s possible that families who kept their children home, or may be seeking a place in child care for the first time, may find it difficult to get back to work, since services need to prioritise places for children of essential workers, vulnerable and disadvantaged children and families previously enrolled. This is likely to affect women more than men, delaying their return to the workforce.

Families may also be left without care if their service ceases operation and they cannot readily find a place with a new provider. Even if their service remains open, families may not be able to afford child care if a larger proportion do not meet the CCS activity test owing to changed working circumstances. This will likely disproportionately affect women, who are often in part-time or casual jobs as the ‘second earner’ in the family – it is their level of activity that determines how many hours of subsidised child care a family can receive. Even if the CCS system resumes, a pause on the activity test for at least six months while families re-establish working arrangements would be helpful.

Above all the needs of vulnerable and disadvantaged families, who previously received the Additional Child Care Subsidy or were not accessing care, must be considered. They may not re-enroll their child unless efforts are made by the Government and child care services to re-engage them. In some areas, such as remote communities, more measures may need to be put in place to encourage families to access early education and child care.

The viability, accessibility and affordability of quality early education and care are key issues that all levels of government around Australia will need to address going forward. Business decisions by large and small child care providers (the latter comprising more than 80 per cent of providers) may determine whether or not families have access to care, but it cannot be ‘left to the market’.

Women who work in the sector will also be affected if there are job losses, reduction in hours of work or, if they continue, to have low pay. Likely future wage cases for child care educators will also highlight the importance of the sector to families and the economy, as well as educators’ right to wage increases. Now, more than ever, children will need supportive services, educators and quality early learning and care settings.

Above all, we will need to consider what sort of system we as taxpayers want, how to support this and what priority governments should give this in their post-COVID-19 spending decisions.

This post is part of the Women's Policy Action Tank initiative to analyse government policy using a gendered lens. View our other policy analysis pieces here.

Posted by @SusanMaury @GoodAdvocacy

Read more analysis from NFAW on the impacts of COVID-19 on women:

Pay equity: Valuing our essential services

COVID-19 responses have ushered in changes to worker’s rights. Women should be worried.

JobKeeepr: Who gets it, who doesn’t, and what that means for women

Superannuation and COVID-19: What does early access mean for women?

The COVID-19 payment stimulus measures: How will they affect women?

Notes

[1] Marie Coleman is a former Director of the Office of Child Care, 1976-81. She was responsible for the Children, Families, Communities 1974 report to the Whitlam Government.