In just over a month, the federal government's free childcare scheme will end. Federal government JobKeeper payments to childcare centres will be scaled back eventually to zero.
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From July 12, parents will go back to the previous fees system with those fees depending on the parents' incomes.
Why has the government pulled the plug?
The government thinks that JobKeeper for childcare has done the job it was meant to do.
The sector was at risk of complete collapse as parents took their children home and schools closed for face-to-face learning.
Total collapse would have meant childcare centres shutting altogether and resources being lost for good. These resources included premises but also workers, many of whom are skilled. Some from abroad might have returned to their original countries.
Now that people are returning to work, childcare centres are starting to pick up again and the government reasons that they can be taken off life support.
What is the evidence?
A report commissioned by the federal government last month found that four in every five childcare providers of the 7,000 surveyed felt they had been able to continue in business because of the JobKeeper payments.
On top of that, Education Minister Dan Tehan said this week that demand for childcare places had now got back to 75 per cent of pre-crisis levels.
"What we have seen is demand grow and grow over the last few weeks so that we needed to change the system," he said.
"This system was designed for when demand was falling. Now, we are seeing demand increasing."
What replaces the current emergency scheme?
The system goes back to the previous means-tested scheme. Parents get a subsidy which depends on their incomes.
But there will be a transition period which will affect childcare centres (though not parents).
The federal government will provide $708 million from July 13 until September 27 to smooth the change.
The economic impacts of COVID-19 are going to be felt for many months and years. People are doing it tough, and a return to fee-paying childcare now will only make things worse.
- Senator Mehreen Faruqi
Under this arrangement, childcare providers will get 25 per cent of the revenue they used to get before the virus hit.
To get this money, though, they will have to keep employing the staff currently on JobKeeper and they will have to keep their fees to parents the same as they were in February.
Families will be entitled to a hundred hours of subsidised care a fortnight.
Will other emergency JobKeeper measures be ended early?
But last month, the Prime Minister, Scott Morrison, said, "I need to stress again that was a temporary lifeline put in place to help Australians through the worst of this crisis. It comes at a very significant cost."
Since then, the government has reassured business, in particular, that there will be no early cut. The danger was that businesses feared the safety net would be taken away suddenly and early so they might be better off shutting up shop now rather than later.
But the government has sought to reassure them that it will go the full promised six months. Finance Minister, Mathias Cormann, said: "We did make a commitment for a six-month period."
But doubters might note that the scheme has now been taken away from childcare centres.
And there is pressure from the right to cut public spending.
Is the move welcomed by all?
Labor and other opponents of the government say that the premature ending of the emergency childcare scheme is a broken promise.
Labor argues that the return to the old system will hit poorer families. At the moment, childcare is free but the resumption of the previous system means re-introducing charges.
The party's education spokeswoman, Amanda Rishworth, said: "An abrupt snap back to the old child care system will be a huge financial hit to families and may cause parents to un-enrol their children, which will continue to threaten the viability of providers.
"The work activity and income tests of the old system will also make it incredibly difficult for many families to access care during this time of economic downturn."
Senator Mehreen Faruqi, the Greens spokeswoman on education, said, "Free childcare has been a huge step forward for access to childcare for families. It should be made permanent.
"The economic impacts of COVID-19 are going to be felt for many months and years. People are doing it tough, and a return to fee-paying childcare now will only make things worse."
The government's opponents argue that women will be harder hit than men by the return to the old system.
As the economy slows are women being hit more than men?
They have been so far, according to Chris Richardson, the chief economist in the Australian section of Deloitte, the global accountancy firm.
He said that the sectors where jobs had gone tended to be ones with higher levels of female employment - like childcare but also cafes, restaurants and the rest of the "hospitality" industry. "It's still women on the wrong side of this," he said.
But he thought male-dominated sectors would be hit harder in future.
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"The shape of the recession will change," he said. "It will start to look like 'a usual recession'." That means that construction, in particular, will start to lose jobs and manufacturing, both of which tend to employ more men than women.
- For information on COVID-19, please go to the ACT Health website or the federal Health Department's website.
- You can also call the Coronavirus Health Information Line on 1800 020 080
- If you have serious symptoms, such as difficulty breathing, call Triple Zero (000)
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