Childcare providers are warning parents who have lost work because of the coronavirus pandemic won’t be able to afford fees once they start again in a month.
The government is ending its emergency free childcare package on July 13.
It will also pull JobKeeper out of the sector, replacing it with a $708 million transition package worth about a quarter of its pre-crisis revenue.
The wage subsidy was worth about a third of fees to those services that could access it but not all were eligible.
Education Minister Dan Tehan has pointed to attendance rates rising to 74 per cent of pre-crisis levels as driving the need for the change.
“We had discussions with the sector, and it was seen that it was much more equitable to have a transition payment that went right across the sector,” he told ABC TV.
The nation’s largest childcare operator, Goodstart, says half of its nearly 60,000 families have had their income slashed since February.
Money coming into those households had dropped by a third on average.
Goodstart and other operators had asked for the government to address the activity test that determines how much subsidised child care a family can access and affordability for those whose income had dropped.
It’s done the first – easing the activity test until October – but not the second.
“(The minister) heard our message that we needed a relaxation of the activity test families still need to pay out-of-pocket costs – child care will no longer be free – and they’ll still be means-tested on that,” Goodstart chief executive John Cherry told ABC Radio National on Tuesday.
“There have been a lot of two-income families become one-income families or one-and-a-half income families and that really has knocked around where they will stand in terms of being able to afford child care.”
He said losing JobKeeper was a surprise.
The Australian Childcare Alliance said it would be very difficult to predict what attendance would be like.
“We will monitor the pressure of operator costs to ensure the new policy settings regarding fees being maintained at February levels do not cause undue harm to families, educators or the providers,” president Paul Mondo said.
Advocacy group Early Childhood Australia is also worried about the impact of families no longer being able to afford care.
“We should not be experimenting with women’s capacity to work and children’s early education – both should be given priority,” chief executive Sam Page said.