Wednesday, 13 May 2020
Matters of Public Importance
I have received a letter from the honourable member for Kingston proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The failure of the government to fund their promise of free child care.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
Free child care for every worker does make a great headline for the Prime Minister, and even more so when he said that all Australians still working were considered essential workers. It is not surprising that families who were watching TV around Australia all assumed, reasonably, from this announcement that they would receive free child care. And of course Labor had been calling for a rescue package, because that's something that needed to be done. When the COVID crisis hit a lot of services were looking at a difficult future, and something did need to be done to stop them going broke.
Of course Labor welcomed the rescue package that the minister announced. We thought it was a bit of a change of attitude; this was the minister who, at the last election, when Labor announced more support for early learning and care, got on radio and called it 'communism'—communism to invest in our early educators and communism to invest in our children. That is what this minister said. So I, like many people on this side of the House, was surprised to see the headline about free child care. I thought: 'Wow! He has had a conversion. He really could come onto our side now and actually join us!'
But the problem with this fancy headline is that the government didn't fund it and, as a result, has created winners, but a lot of losers. The government did turn off the childcare subsidy scheme, and told services they were now to receive 50 per cent of their revenue. They banned services from receiving any other income from families and they asked services to cobble this together with JobKeeper. They introduced complicated rules around JobKeeper and deliberately excluded many, many workers and services from receiving it—workers who had been on visas, workers in places that had been run by local government and workers in places that had been run by charities. This has been particularly devastating in Victoria and Tasmania, making many unviable.
Then, to fix this problem—because, as the minister said, the government knew there were going to be unintended consequences—the government said they would create an exceptional circumstances fund. The only exceptional thing about this fund is the number of applications being rejected. I am hearing from many services that they wait weeks and weeks for a response, desperately trying to keep their services going—desperately cutting hours, desperately cutting staff—and hoping to hear a positive result about their exceptional circumstances application. But then they finally get the answer, and it's just no. There's no explanation and no justification; just no. There is one exception to this: it seems that if a service speaks out to the media about their rejection they do get a call the next day from the department, saying that their application has been reviewed and they now have the funding.
So my office has been flooded with calls and emails from early learning services from around the country who are struggling to keep their doors open after their funding has been slashed. These services are now cutting opening hours, cutting staff or cutting places to try to balance the books. One of the examples we heard today was from First Class Learning Centre in Maroubra. They have had to turn away eight children under Scott Morrison's so-called free child care because their revenue has been halved, and only five of their eight staff are eligible for JobKeeper.
I've also heard from many families who are being denied places, including healthcare workers who have been asked to come back from maternity leave early to help with the crisis—they are needed. Quite frankly, it is pretty concerning when you hear story after story. These parents have been on waiting lists for up to a year. As soon as they find out they're pregnant they get onto that waiting list and they are actually waiting to come back to work, only to find out a week or two weeks before they're ready to go back to work that because of the government's cuts to the funding they're no longer able to have a place. I've heard countless stories where, instead of being able to get child care, parents have had to make the difficult decision to put their children with their grandparents. That's even though they know and are worried about the risk this will be for the grandparents, who are often a lot older and more vulnerable when it comes to COVID-19. This is the difficult decision they are having to make because this government announced free child care but did not fund it.
Jessica, from Queanbeyan, also hasn't been able to find a place for her child and so now has to take her son to work with her. How is this so-called free child care helping Jessica? I've spoken to family day care educators, who didn't suffer a large drop in enrolments but who are now expected by the government to work for half the pay because they can't access JobKeeper. One family day care educator said to me that they're running at a 70 per cent loss and are still waiting on an exceptional funding circumstances answer four weeks later. It's no wonder the sector is seriously struggling to deliver the Prime Minister's free child care commitment when they're expected to do this with a lot less funding.
The government is spending less on child care than they would have under business as usual. Indeed, in the December 2019 budget update, less than six months ago, the government said it was on track to spend $8.3 billion on the childcare subsidy. That works out to be about $2.1 billion a quarter of funding from the government. So when we hear the government say that they've put $1.6 billion worth of funding into a rescue package, that's actually less than they had budgeted to spend on child care. Please: when this government does their spin about the childcare subsidy we always have to look deeper.
Another example is the Tiny Tots Child Care Centre in Brisbane which was so angry and upset about this that they put up signs saying, 'ScoMo thinks we're only worth $5.99 an hour'. They certainly would not agree with the minister's comments in here that the government is valuing them. They certainly don't believe what the government say in their empty rhetoric about how early educators have done a great job when, from their perspective, they're not being paid any more than babysitters. Quite frankly, it's time the government started looking at this policy seriously.
Of course, the government's response has been to blame providers. We have seen strongly worded communications to providers, threatening their funding if they don't provide enough places and hours for the community. They've set up a new hotline for informers, for families—'If the centres don't provide enough child care, then ring up and dob those centres in.' Right around the country there are families that cannot find child care. I know that members from our side of the parliament are getting inundated by families that cannot find care. When the minister was confronted by these families he said—and this was his solution—'Call my ministerial office.' I encourage those families to give him a call, because this is a systemic problem right around the country.
We on this side of the House always believe that early learning is one of the best investments a government can make. We've always been the party that believes in better quality, better access and better affordability. This will be incredibly important in the future. We are seeing families returning to work—whether that's from maternity leave or getting a job as we emerge out of this crisis. It would be a tragedy if they could not return to work not because of COVID-19 and the impact it has had on their jobs but because they couldn't find a childcare place. If the government doesn't seriously address this and fund free child care properly, we will see this acting as a handbrake on economic recovery.
It is not good enough that the government just sits on its hands and says, 'We always knew that there would be unintended consequences.' Well, address these unintended consequences. Help those families who are desperately trying to find a place. Help those centres that are doing their very best under very difficult circumstances to actually get on with the job rather than worrying week to week whether they will be able to make ends meet, whether they will be able to keep their doors open, whether they will have to cut their hours and whether they will have to lay off educators. These are the real decisions that are being made right now in centres and services around this country. They are at breaking point.
I hope the minister does not break his promise. He promised free child care to every working Australian. He promised child care to those disadvantaged children in our community. It is high time that this government delivers on that promise and funds free child care.
I would like to start by giving the departmental perspective to this claim that somehow the government is not funding the early childhood sector. I'd like to put this issue to bed. In response to a journalist's inquiry around the government not funding the sector to the level it was funded before we went into COVID-19, the department said:
The Department cannot validate the claim the Government is spending $400 million less this quarter. Under the Early Childhood Education and Care Relief Package, the sector is expected to receive $1.6 billion over the coming three months from taxpayer subsidies. This plan complements more than $1 billion the sector is expected to receive through our new JobKeeper payment. Under the pre-existing system, the sector was estimated to receive $1.3 billion if current revenues and subsidies had continued.
That is from the department. It completely puts to bed this idea that we are underfunding the sector at the moment. The $1.6 billion plus $1 billion is $2.6 billion.
Government members interjecting—
I see the shadow minister. This is from the department: 'The Department cannot validate the claim that the Government is spending $400 million less this quarter.' That's pretty straightforward. It's pretty clear what the department is saying about your claims. What did the government do? What did we have to respond to? I mentioned this earlier in question time. The Early Childhood Education and Care Relief Package was designed to support the sector as we headed into the coronavirus pandemic. We were seeing mass withdrawal of children from the sector. In some instances it was forecast that we would see 30 per cent of the sector close. That would have not only led to the sector staring into the abyss about its future and how it was going to cope with this pandemic but also meant that the sector would not have been there to support Australian families and children as we began to emerge from the pandemic.
I thank the sector and the representatives of the sector who worked with the government incredibly cooperatively, collaboratively and discreetly, given the significance of what was being undertaken. The government had to design a new package which would carry the sector through the pandemic. I think it would be fair to say that at the time most people thought we were looking at six months at a minimum to carry the sector through the pandemic. Fortunately, with the way that we have been able to flatten the curve, literally less than two months on we are seeing our economy beginning to ease restrictions, which means that families are going to be able to get back to work and the sector is now looking at a very different picture to the one a couple of months ago. As a matter of fact, rather than seeing demand diminish, as we were, we are now seeing demand begin to increase. So literally five weeks after we announced our package we are now looking at how we can help the sector deal with increased demand.
When we put the package in place we announced that we would have a review after four weeks. That review has been undertaken by the department, and it landed on my desk yesterday. We are now, as a government, looking at that review. Obviously we will consult further with the sector and see what further actions we need to take to ensure that the sector can continue to thrive as we come out of the pandemic.
But I would say this to the shadow minister: rather than criticising a response that has meant that we have a sector ready to work with the government, ready to work with our economy to ensure that parents can get the care that they need, you should be taking a much more constructive approach. What the sector has done over the last couple of months is quite extraordinary. It has meant that while we were in the depths of dealing with the pandemic essential service workers were able to get their children cared for. We saw the sector respond to the government's initiative and remain open. As we stand here today, 98 per cent of services are open—quite a remarkable achievement. By staying open, not only have they been able to care for those essential service workers but also they've been able to maintain a relationship with parents who had withdrawn their children or who, due to unemployment caused by the pandemic, had said, 'Well, I don't know whether we'll be able to continue with that care.' So, they've been able to maintain that relationship, which is incredibly important.
Equally as important, they've been able to maintain care for vulnerable children throughout this pandemic. We know that stresses and pressures have been put on families right across the board, and the fact that we've had a sector that has been there for those vulnerable children right through these two months is, once again, extraordinarily important for what we were seeking to do by working with the sector to get this outcome. So, once again I thank those early-childhood workers, because by remaining open you have been able to achieve the three priorities that the government wanted achieved through this. If there had been those closures, the impact on essential services workers, on vulnerable children and on those parents who had withdrawn their children would have been completely different to what we are looking at now. We have been able to meet the objectives that we set out to achieve.
What does this mean now, going forward? The fact that 98 per cent of the sector is open, operating, fulfilling their roles means that we can now work with the sector as we come out of this pandemic, and that is what we will do. I am extremely confident that, working collaboratively with the sector, we'll be able to put the right decisions in place so the sector can meet the demand that will be required going forward, and that is what we want to achieve. We want to make sure that as people go back to work their children can get the care they need, that they can get the education they need.
As we monitor demand, we will monitor the system that we have in place. And we have to understand that demand varies across the economy at the moment. In some places we're seeing demand of around 45 to 65 per cent. In other areas we're seeing demand at much higher levels. And then in other areas, sadly, where the devastation of the pandemic is at its worst, we're seeing demand below 45 per cent in some instances. So, it is quite a complex situation that we are now looking at. And I will say once again: my view is that you work collaboratively with people, you look at the complex issues, you design your policy to make sure that is takes account of that, and we will ensure that our childcare sector grows with the Australian economy, provides that education and care that parents need as we come out of this pandemic.
I look forward to staying in touch with the shadow minister as we work through this. I look forward to advising her of the steps we're taking, the policies we're putting place. In the end, we want to make sure that we are providing the care and the education that our children need, and I'm sure everyone in this House wants to ensure that that care and that education is there for Australian children.
On 20 April this year I received an email from Andrew, a local from my electorate, expressing his concern about the government's new childcare policy. It reads: 'I thought I'd let you know there is an annoying flaw in the Child Care Subsidy plan which has created a system where I cannot get any child care for my child and will probably have to quit my job to look after him. The system has been set up so no childcare centre can take new enrolments, as they cannot be sure they will be paid for that child.'
Unfortunately, Andrew's situation is not unique. Many Australian workers and their families are being locked out of our childcare system at the moment because of this government's ill-conceived COVID-19 response to childcare and the fact that they haven't properly planned for this pandemic. 'Free child care for everybody' was a great headline, but the reality in the suburbs, in the childcare centres, is very far from that headline. It was a bold initiative for the government to proclaim that there would be free child care for everyone. The problem is that the government didn't fund that promise and that commitment. Most childcare providers and family day care providers are struggling to keep staff on. They're struggling to keep children in their care and keep their centres open.
The problem is becoming more and more acute as many of the states begin to lift some of the restrictions that we've all been living under for the past few weeks and to encourage workers to return to work. I ask the government: how can someone return to work, return to their job, if they can't get their children into child care at this point in time because of the policy that you've put in place?
Many childcare providers are cutting back hours for children and not taking any new enrolments because they simply cannot afford to under this scheme that's been set up by this government. That's because the government's childcare response is based on the premise that providers will be able to access the JobKeeper program for all of their staff. The reality is that that is not the case in the suburbs and in centres throughout the country. The reality is that many workers are not able to access JobKeeper for a range of reasons, so they're forced to keep these staff on, potentially at a loss, to care for children. Is it any wonder that they're turning away new entrants and children from their childcare centres throughout the country?
Natalie, who runs the First Class Early Learning Centre in my electorate, runs two centres. She's got a total of 16 early childhood educators. Only 10 of them are eligible for the JobKeeper wage subsidy. With families returning to work and children returning to care, Natalie needs all of her staff on the job to care for and educate the children in care. How is she supposed to do that when only 10 of them are receiving the subsidy and when they can't charge fees during this period? This is placing enormous stress on those centres and is affecting the hours of care that they can provide for children. And, of course, it's prohibiting them from taking on new cases in their centres. It's not just childcare centres that are affected; it's family day care centres as well. On 6 April, I received an email from Jasmine Harrington. Jasmine operates a centre in Botany in my electorate. She wrote, 'The recent announcement of free childcare is not only misleading, it is having a significant impact on my business, my family and my wellbeing.'
The government declared early in this pandemic that child care was an essential service and that it wanted centres to remain open to ensure that healthcare workers, particularly, could continue to go to work and their children could get the care that they deserved. The trouble is that the government didn't properly fund it. As the shadow minister said, they've underfunded the program by close to half a billion dollars. and that's the reason children are being locked out of child care in this country at the moment. That's the reason centres aren't able to provide the necessary care for some of these essential workers and other workers that are returning to work during this difficult period. The government has a responsibility to fix this problem and fix it as soon as it can.
Fix it? They already are. We just heard from the minister who pointed out that there's a four-week review. Remember that, in early education and care, this was a unique piece of crisis policy worldwide that kept 98 per cent of education open right across this great country. There are 13,000 childcare centres out there, many of which would probably have been imperilled had there not been this quick intervention. Obviously it's a complicated system in Australia given that so much of the provision of childcare services is in the private sector. It's quite easy when the government owns every sector, isn't it? But Australia and its unique quality of high-standard early education—uniquely, in the OECD, open to people of all socioeconomic backgrounds—had a unique challenge. The overwhelming majority of early education providers are private businesses that make private, mercantile decisions on something as important as early learning. But they do it so very well. It's a very complicated sector. Centres are run by church groups and state governments. Some have state governments as landlords. There's great variation. So, when you come up with a crisis response which is effectively switching off that very, very complicated system, coming up with something that could actually meet the needs of all those different kinds of centres was incredibly challenging. That's why we've got a responsive policy situation and a four-week review in front of the minister and the department right now to find solutions.
But what was often understated—and I know this from personal experience of speaking with centres that wrote to parents and pointed it out—was that, while JobKeeper played a significant supplementational role with nearly a billion dollars going into the sector, a lot of that money went into the pockets of staff. Many of those staff were only doing small shifts per fortnight. Many of them were just permanent part-time workers who actually did better with JobKeeper. So those funds, self-evidently, didn't go to running the centres themselves. That is the heart of the concern from many centres who said that 'taking 50 per cent of the hourly cap or the fee total, whichever is the lesser' has left them technically in a position of lower liquidity to run the centre. And, although it was very rarely discussed—and I can see the opposition raising their eyebrows as I point it out—that's exactly why there is a special circumstances supplementary fund. It was created explicitly for that reason.
We know that up to $10,000 is available to potentially nearly 3,000, centres that find themselves in a situation where they aren't financially in the same position as they were before the crisis. There are plenty of businesses out there that are not in the same position as they were before the crisis. Let's just start with that antecedent point. Secondly, that fund is there for that purpose. It's responsive. It's fast. It's an easy process to go through, unless you're a Labor MP. It's fairly self-evident that the special circumstances are absolutely there in smaller communities in particular and for those in the centre of cities where their rent payments are higher. And, of course, that's a solution that is ready and able to solve those uncertainties until, of course, a four-week review occurs. It's easy to chortle when you're in the opposition. But, for many of these small businesses who never see a Labor MP, it's fantastic to have some interest from the other side of the chamber in something other than signing up their damn staff to be union members. You're finally taking an interest in the quality side—
I accept that the shadow minister has vetted a few, but I tell that you're flat out getting a Labor MP to show up to a childcare centre for the damn Christmas party. For goodness sake, show up. Put some books under your wing and show up to an early education centre and talk not just to those you're trying to sign up to the unions but to those who run the business. There are many centres and they range from mom-and-pop enterprises through to Goodstart Early Learning. There are very different circumstances. But those special circumstances supplementary funds are there to give a tailored response to centres that need it. And do you know what? Even after that, there will be this four-week review and the findings from it. So let's be honest: it's not blemish free. Let's be honest: it's not an unchallenging environment. But let's be frank. This is a government that acted early and in fact swiftly and decisively in COVID in a way that many other governments refused to do. I was in the UK in early March as they sat there, anchovy like, in their House of Commons in the middle of a COVID catastrophe; whereas this government had already acted—acted for early learning and care; acted for the economy; and acted for employees who just wanted to keep a connection to their workplace. And I tell you what, when we pull all of those interventions together, this will be a nation very proud of what this government has achieved with the COVID crisis.
I want to thank the member for Kingston for moving this important motion, bringing this to the attention of the parliament, though it did make me feel somewhat sorry for the minister who's gone from being stalked in this place by Jenny Macklin to being stalked in this place by the member for Kingston. It almost made me feel sorry for him. But this moment before us is an historic moment. It's a time that many, many Australians will be feeling the weight of uncertainty—uncertainty about their healthcare situation, frail relatives, their economic situation, what their community will look like after COVID-19; and what next week will bring, what next month will bring and what next year will look like.
The stress of this uncertainty is not just a bother. It's not just troublesome. It isn't a mere irritation. This uncertainty is corrosive, and its seriousness is reflected in growing levels of mental distress that I'm sure all members of this chamber are seeing firsthand in their electorate. Government's role in the face of this anxiety, this uncertainty, now is to offer support, not spin. It's to offer certainty, not hollow headlines. It's to lessen the chaos and uncertainty that surrounds the people that we represent by delivering responsible solutions.
One way of doing this is to properly fund Australia's childcare providers. Child care is fundamental to Australian families. It's the foundation of so much of our modern economy. But right now the sector is suffering and the social bonds that it offers are stretched very thin. 'Free child care for working parents' read the headlines early last month, which sounded like great news for Australian families. But apparently those headlines should have had an asterisk next to them, because they came with a catch. They came with a bit of fine print. 'It will be a system which means parents will get their children cared for for free,' the education minister said. 'You do not have to worry about trying to look for new child care for your children.' Except almost six weeks later that's exactly what many parents are worrying about as childcare centres struggle to maintain regular hours or even to keep the doors open.
In my electorate, I know of childcare centres that have been forced to reduce their staff because of loss of revenue. They've been forced to make other agonising decisions. They've had to tell some parents to reduce the number of days their children receive care. And, if the parents don't, then they'll have to enforce rationing of days themselves. I know we've heard a lot of wartime metaphors and analogies in this place, but that is taking things too far. It's unnecessary. There's one parent in my electorate even who has told me that they want to be able to pay more so that their child can receive child care but have been told that it's just not possible.
This reality for Australian parents is a world away from the headlines. In April the government announced $1.6 billion in funding to support free child care. This figure was misleading. Without context, it might seem generous, but $1.6 billion is less than the government was budgeting to spend on the childcare subsidy before the pandemic struck. The devil is always in the detail with this government.
The government's funding for childcare providers restricts them to just half of their pre-pandemic revenues, which has had the unsurprising consequence of reducing services and putting great strain on these centres. Whilst some childcare providers can theoretically access JobKeeper and an additional top-up fund, there have been delays and difficulties in doing so. It's hard to overstate the importance of the childcare centre in any moment, but especially now as some of these coronavirus restrictions are being lifted and people are trying to return to going about something of a modicum of what they were doing before the pandemic.
The Prime Minister has emphasised the urgent importance of reopening our society. He's emphasised the snapback. The Prime Minister said:
You can stay under the doona forever and you'll never face any danger, but we've got to get out from under the doona at some time. And if not now then when?
But the government doesn't seem to understand parents can't go back to work if they don't get child care, and they won't get child care unless childcare providers are supported and properly funded. It doesn't matter how many good headlines are generated, if childcare centres are forced to turn children away. It doesn't matter how much rhetoric is deployed about the importance of workers and employment if those with jobs are prevented from acquitting them because they must stay home to look after their children.
This Prime Minister has spoken about the economy snapping back, as if everything was fine before the pandemic. He seems to have forgotten that there can be no snapping back for businesses that fold during this crisis. It was an extraordinary performance from the Prime Minister in question time today when we asked him about his snapback policy. Indeed, it went past snapback and started to sound a lot like 'fight back', complete with the ranting ideology that we saw from the opposition leader in 1993. Ideology is back.
The Prime Minister told anxious Australians, 'Don't look to government to cure your anxiety. Business will save you.' The Morrison government needs to understand that this crisis isn't even close to done, and that Australians expect their government to be there for them in these times of uncertainty. (Time expired)
The government is providing $1.6 billion this quarter through the new Early Childhood Education and Care Relief Package, supporting close to one million families doing it tough during the COVID-19 pandemic by providing free child care. The government is also providing approximately $1 billion in JobKeeper payments this quarter to the childcare sector. This adds to $2.6 billion, which is more than $1.9 billion budgeted, to spend in business in usual times. This package is providing hip-pocket relief to families across the country, including in my electorate of Mallee, while also ensuring 98 per cent of the 13,000 early learning and childcare services can keep their doors open and make it through the other side of this crisis.
This plan was designed to provide certainty to our early childhood educators and childcare services at a time when enrolments and attendance are highly unpredictable. It also gives parents certainty that, through all of the recent disruptions, they will have access to the childcare services they need. Having said that, the review is very welcome. I am very aware in Mallee of particular childcare centres that have struggled to make this work. The plan was designed to provide certainty.
The relief package provides consistent payments, even if attendance decreases. This has provided financial stability for service providers who are facing uncertain attendances. This relief package complements other government initiatives, including JobKeeper. Eligible employers are receiving a further $1,500 per fortnight per employee to subsidise wages and reduce costs. This subsidy is extremely important because approximately 60 per cent of costs for childcare services relate to staff wages. The JobKeeper payment goes a long way towards retaining staff. The Australian tax office is working with providers to ensure that as many eligible services as possible can receive these payments. It's true that some services do not qualify for the JobKeeper payment, but the government is supporting these services with exceptional circumstances supplementary payments that are built into the relief package. This supplementary payment supports services that are part of non-government schools, large charities and not-for-profits, as well as those operated by local councils. It is also provided in instances where there has been an increase in the level of care provided compared to the reference period. This means that if services have more children attending now than during the reference period they can apply to receive a higher payment. Providers of family day care and in-home care services can also apply for supplementary payments on behalf of contracted sole trader educators, provided these educators apply for an ABN by 1 June 2020.
Eligible employers are being further supported through the cashflow boost payment, with up to $100,000 helping these businesses to stay open and provide continuity of service to families. The relief package is assisting over 98 per cent of the 13,000 childcare services to keep their doors open across Australia, including more than 1,000 services located in regional and remote communities.
The Australian Childcare Alliance has backed the relief package, describing it as, 'an extraordinary measure that will help struggling providers keep their doors open to vulnerable children and those parents who need to keep working.' The alliance said that 30 per cent of childcare providers faced closure in the weeks leading up to the announcement of the package due to massive withdrawals of enrolments. Dramatic falls in attendance due to COVID-19 threatened the viability of the sector and provided the impetus to develop a solution. The childcare sector told the government in no uncertain terms that operators would go out of business, workers would lose their jobs and families would lose their childcare service altogether without government action.
Childcare services are vital in my electorate of Mallee. I've spoken to families, local councils and childcare providers from my electorate, including Montessori Beginnings in Mildura and Little Swans Early Learning in Swan Hill. I've listened to their feedback on this package. And I've been working closely with Minister Tehan to make sure he is informed. I know that Minister Tehan, and the entire Morrison-McCormack government, is working towards positive outcomes for millions of Australian children and families, while ensuring that the 13,000 childcare services across the country are supported through these unprecedented times.
In answer to those opposite, the government has funded free childcare services. With over $2.6 billion in funding we are assisting 13,000 early learning and childcare providers and we are supporting around one million families with free services during this pandemic.
There's no doubt that at the end of this we'll look back at all the lessons that have been learned and we'll go through all the woulda, coulda, shouldas of all of this. I think one lesson that we're going to learn from all of this is that a single one-size-fits-all approach inevitably, and most of the time unintentionally, creates inequality and leaves some people out. I think that's been one of the biggest lessons and we've particularly seen that with JobKeeper.
To my mind, I think this should be a caveat that pre-empts any kind of policy development. You start off developing policy with an understanding that a one-size-fits-all approach inevitably leads to inequality and leaves people out, and, dare I say, even more so during times of crisis when the necessity to act quickly can often lead us into a temptation to implement measures without extensive consultation or without comprehensive consideration. I think that this is the case that we have here with the government's 'free childcare' that was announced with much fanfare and within the electorate of Cowan it was very much welcomed. But, unfortunately, it has not resulted in free childcare and has left many parents without an option for childcare at all.
The government's changes here in the childcare space restrict providers to 50 per cent of their revenue as of the beginning of March, which means that providers now have no incentive, or even capacity, to take new enrolments or allow parents to increase their hours. So parents who took their children out and now want to go back to work have no means of doing that if they cannot find childcare. But more than that, to keep their doors open with a 50 per cent reduction in revenue early learning providers are left with no choice but to reduce staff, cut their hours and deny new families or cancel existing enrolments. This has been a huge issue throughout the entire electorate of Cowan.
I'd like to read some excerpts from the emails and the contacts that I've had from childcare providers throughout Cowan about their experiences with 'free childcare'. The first piece of correspondence comes from a parent who said that they, 'would like to take their three-year-old child out of day care' but they had to give two weeks notice. They have 'lost their place and are now unable to find another place in child care'. I had quite a few of these.
Let me go to the childcare providers themselves. One said, 'I had a very successful business before all this happened. I had full enrolments and my business sustained itself. Since this has happened my service is no longer viable to be run for the hours and days it previously was. All my parents want to pay me. I have a doctor, police officer, psychologist and parents who are other essential workers on my books. They have lost no income and feel it is so unfair that I have to transfer the fees back, as the government has said it is illegal for me to accept their fees.' Another childcare provider wrote to me and said, 'With enrolments decreasing daily the childcare subsidy will offer very little to business sustainability during a closure. We are being bled dry.' These are the words I have here in black and white from a childcare provider, 'We are being bled dry.' Yet another one says, 'As a result of mass withdrawals this week from my centre due to the coronavirus crisis, I've immediately lost family fee revenue as well as the childcare subsidy, which together allow my business to remain viable.' And yet another one, 'With a business that has been operating for less than 12 months we're not entitled to JobKeeper. It's most likely the child care will close', and it goes on and on.
The fact is that the inequality that's been created has been created not just for the childcare providers but also for the parents who now either have no child care or no childcare options all.
I'd like to finish by saying we need to really take this opportunity to value our childcare sector and value our childcare workers. I hope this is a wake-up call to really value them.
Ultimately, I'm pleased that my friend the member for Kingston has brought forward this MPI on child care today, because it allows us in this House the opportunity to interrogate a little bit further a claim that she made during question time, which, now that we have heard from the minister in detail, has been proven to be completely false. The figures that the member for Kingston is using are wrong. The minister spoke about the fact that our independent public servants have looked at the claim and simply can't substantiate it. So, what's the answer to that? She's fudged the figures. She's stuffed them up. She's made them up. Take your pick, because we've got independent public servants who are saying that they don't know how she could possibly have reached that conclusion, not after the Morrison government put $1.6 billion as part of this childcare package on top of the $1 billion the childcare sector is accessing as part of the JobKeeper payment. The claims that the member for Kingston is making about the figures are just wrong. They're simply wrong. The minister said it, the independent public servants verify it, and still—
If the member for Kingston still stands by her figures, she might like to go into more detail about how she came to them, because there is an entire department of experts who do this for a living who can't do the same maths as her and who can't get the same figures that she does. I would put it to the House that the reason for that is that she's got her maths wrong. Labor are not allowing facts to get in the way of the story they want to tell. It's important to judge this program by its results, as you should judge all programs and all of the funding that we have put in place to help people through COVID-19. Let's judge it on its results.
At a time when restrictions were being put in place, as people were working from home or not working at all and therefore pulling their kids out of child care because it was a cost that they could no longer afford, the childcare sector was in crisis and facing imminent collapse. Instead of that scenario, what have we got? We've got 98 per cent of centres open. Ninety-eight per cent of centres are open and operating for the assistance of their community and to help us as we undertake the economic recovery. Before the package, the sector acknowledged that they were in deep, deep trouble and facing crisis and collapse; on the other side of the package, 98 per cent of centres are still open. It seems like it's hit the mark—very much so. The centres are still operating and underway.
What's even more hypocritical about the member for Kingston's claims—and Labor's claims—on this issue is that she stands in this place and says, 'I speak on behalf of parents who would like to put their kids into care so that they can return to work.' Well, I wish she would give that message to her Labor Premier friends around the country, who have been slow and lethargic to reopen schools, as opposed to childcare centres, which have been operating this entire time—these wonderful frontline workers who have been supporting and helping our kids, educating our kids, and looking after our kids throughout the COVID-19 crisis, despite concerns about their own health. In contrast, we've had Labor premiers, despite clear health advice saying that schools are able to open and operate so that parents can get back to work and don't have to homeschool, saying, 'We choose not to take the health advice.' Explain that hypocrisy to me. If she's so concerned about working parents, maybe the member for Kingston would like to stand up and explain why she hasn't fronted up to her Labor premiers and said, 'The health advice is that these schools can be open. Let's get them open.'
What you saw with this package is the Morrison government and Minister Tehan acting decisively to support the childcare sector and working families in our electorates around Australia during a time of crisis. They acted decisively. They injected extra funding into the system—$1.6 billion on top of the billion dollars they are accessing via the JobKeeper payment—in order to keep those jobs in place, in order to keep our kids looked after during this global pandemic. (Time expired)
The coalition's childcare system was a failure even before we got to COVID-19. Their so-called once-in-a-generation system left one in four families worse off and reduced access to early education and care for 279,000 families. The government boasted that they were driving down the cost of child care, but childcare fees are already out of control in the new system. At the start of 2020, fees had gone up by 7.2 per cent in the previous 12 months and 34 per cent in seven years under the coalition. That's the starting point, and it's a mess. The government have absolutely no idea and no plan on how to bring childcare fees under control.
Last year, the Minister for Education labelled Labor's plans for taxpayer funded early education as 'communism', and then COVID-19 hit. Suddenly, free child care sounded like a good idea—simple, easy. But, in true coalition style, free child care isn't all it's cracked up to be. Under the COVID package, and despite free child care, this government will actually save $300 million this year compared to what they would have spent in the same period in normal circumstances. Here's why. If you were a provider who had maintained enrolments and income as at the first week of March this year, all of a sudden you are only getting 50 per cent of that amount. To get that 50 per cent, you have to cover free child care for existing clients and you can't charge a gap fee—even to those who maintain their jobs—to cover any deficit between the government subsidy and your actual cost. We now know that not all of a provider's staff are likely to be eligible for the JobKeeper payment if, indeed, the provider qualifies at all. If your staff are international students or other temporary visa holders, or casuals of less than 12 months, they don't qualify, and many centres run by charities, local government or independent schools don't qualify for the JobKeeper payment at all. My office has heard numerous stories of providers having to cut staff and hours to keep afloat.
In a panic, the government set up an exceptional circumstances fund to assist those struggling with the new regime. Well, we aren't hearing of many—or any—providers getting funding through this exceptional circumstances fund. For example, the Bannockburn childcare centre in my electorate applied for funding because, as a service run by the Golden Plains Shire Council, they don't qualify for JobKeeper. Last Saturday they got a rejection letter for their application for supplementary funding. This Monday they are reluctantly cutting the hours of all staff to 20 per cent. And they're not alone. Why should some parents, who simply by accident of location sent their children to a government-run service, suffer a huge disadvantage compared to those parents who send their kids to eligible services?
Those with an existing childcare place were supposed to be the real winners under the government's COVID-19 package. They would receive free child care. But even these parents have been reporting that their places have been cut to minimal hours in order for providers to survive. I'll give you two examples that have come to my office. Both mums were seeking places in centres run by national company G8 Education. One of the mums was a doctor on the Bellarine Peninsula. She was distraught because she needed to return to work as a GP in May. After the package was announced, she was rung immediately by the Great Beginnings centre in Curlewis and told she no longer had a place, despite the fact they had capacity and her other child was already attending the same centre.
Another parent in the same situation is Tamara Sorensen, who was scheduled to return to her work in a bank office in Bellarine this week. She wrote to me saying: 'For some time prior to COVID-19 I have had my 11-month-old enrolled at Leopold World of Learning. When contacting them to organise orientation last week, I was advised that Grace has a place but can't attend. When speaking with the Leopold centre it was made clear this is not a health related issue, but a company decision due to the government funding package.'
Thankfully, after we got some publicity for both cases, these parents were offered casual places for their children by the G8 centres, but their good fortune doesn't change the impact of this package on thousands of other parents. I'm not blaming the providers. I'm blaming the chaotic, dysfunctional policy of the Morrison government that has put them in this position. What sort of policy creates such a disincentive for providers to take on new children or create such barriers to parents trying to re-enter the workforce or increase their hours of work? (Time expired.)
I'm proud of the proactive support that the Morrison government has shown to the important early childcare sector during the past few months of the COVID crisis. Of course now that the acute emergency is past, it is time to review the situation, and I am pleased that the Minister for Education has already completed this review and it about to announce the next steps.
But of course the opposition are not content with the lengths taken and the swift action shown by the Morrison government during this unprecedented time. It is easy to complain when you have the benefit of hindsight. But in so doing, we risk missing the fact that the coronavirus has resulted in a pandemic of unprecedented proportions globally. It is extraordinary that so much has been delivered by the Morrison government with an eye firmly on the principles of saving both lives and livelihoods.
More than that, we've shown that we value our littlest Australians and the special care they need in those critical early years. We knew that we had to support the sector to support our children in those crucial developmental years. We knew that if we did not step in, the childcare sector would have been decimated. And by keeping childcare centres open and providing fee-free child care, we've helped Australian families as we face this global pandemic together—just like we said we would. We knew going into this pandemic that our response was going to hinge on the availability of our essential workers to do their jobs to the best of their abilities. We were going to have to ask them to put themselves on the line to keep Australians healthy during this time.
Let's just wind back two months. Across the country the childcare sector was facing a decrease in activity that was simply not sustainable. Parents were pulling their children out of child care at speed. The childcare sector was in freefall. A survey in the first week of April 2020 conducted by the Australian Childcare Alliance showed 30 per cent of providers faced closure due to a massive shock withdrawal of families, either from fear or unemployment, and another 25 per cent were not sure they would ever recover once the virus crisis had passed. The government recognised it was vital we kept the childcare sector afloat and invested heavily by providing the $1.6 billion Early Childhood Education and Care Relief Package. This provides for one million Australian families to receive fee-free child care. Just as importantly, it has meant that 98 per cent of current services have stayed open. Free child care for parents and a sector that has survived an unprecedented crisis.
To make up for any gap between what the centres were receiving and their outgoing costs, we delivered almost $1 billion in JobKeeper payments to the childcare sector workers to keep them supported during this time. We wanted to make sure that parents stayed engaged with the same childcare centre so that children, parents and centre operators could return to normal as soon as possible. As parents, we all know how important it is that our children have continuity of care.
Our four-week process is a mechanism to ensure that the system is being reviewed and that we can then deliver what we need to deliver. This review is so important, and these measures were decided as the curve was moving up. We had to act quickly. Now, due to the leadership of the Morrison government, the curve is moving downwards. We've started to ease restrictions and start our economy again, and people are returning to work faster than anticipated. That is a good problem to have. We need to ensure that we have the parameters right as we move forward, and I look forward to hearing from the Minister for Education about what those parameters will be.
The childcare sector was in the brink of collapse, and the success of our program has kept this sector alive. In fact, we know from our industry experts that our response is the envy of the world. It is the fact that we've cared for the most critical sector and for our most critical citizens: our children. It was vitally important for the health and welfare of our youngest Australians that we acted swiftly, and we did, and I'm incredibly proud of it.
I had services within Higgins who rang me up, desperate and crying that they were going to lose their businesses because they didn't think they were going to survive this crisis. As Australians, we should be proud that we've all worked together to deliver in a swift and appropriate way.