Dan Tehan: More research confirms families cannot afford childcare fees

Dan Tehan: Please note more research showing families cannot afford pre-COVID19 childcare fees

Dan Tehan

On Tuesday and Wednesday this week two pieces of new research were released, from two separate organisations, confirming, in different ways, the unaffordability of early childhood education and care in Australia. And, the mounting crisis facing parents and the early learning sector as a result.

On Tuesday The West Australian‘s political editor Lanai Scarr reported findings from The Front Project that indicate the financial pressure that families experience in trying to pay for early learning.

More than half of the 1038 parents surveyed said the cost of ECEC impacts their weekly grocery budget and how much they can work, while a third said it affects where they live. Two-thirds said fees influence their social spending.

Of the group surveyed 97 per cent said they believe early childhood education is important and 63 per cent said they value the learning and development component above the facilitation of them being able to work.

“I think there is more to understand but clearly this is a signal that we need a system that makes services more affordable for families, while ensuring quality and sustainability,” the CEO of the Front Project, Jane Hunt, told The West Australian.

On Wednesday ABC investigative reporter Michael Atkin revealed new research from The Mitchell Institute on ABC’s 730 that showed a return of fees in July will not be affordable for many families.

“Parents will be facing a decision about whether they can even afford to keep their child in early learning,” Research Fellow Kate Noble told 7.30. “Families are probably sitting around the dinner table having some really difficult conversations about what they can and can’t afford. Already before COVID-19 hit, childcare fees were bordering on unaffordable for a lot of families.”

In response the Education Minister Dan Tehan said that easing the activity test would help families. ‘Any family affected by COVDI19 who seen reduced working hours or sadly lost employment can get access to the activity test up to 100 hours of subsidised care.

Kate Noble’s response was that if income has been reduced – having extra hours of subsidised care available won’t offer any financial relief.

Because while relaxing the activity test for families that have experienced a reduction in their working hours or income due to COVID19 means they won’t be penalised in the form of additional fees – but they won’t see a reduction in their fees either.

The Education Minister also acknowledged, for the first time since announcing the snap back on the 8th of June, that he couldn’t guarantee there won’t be a fall in demand when fees return.

Upon announcing the premature return to the old subsidy model Tehan emphasised, repeatedly, that it was increase in demand – to the tune of 74% pre-COVID19 attendance rates – that necessitated a return.

“As we’ve seen restrictions eased, as we’ve seen people getting back to work, as schools have reopened, is that demand for places in the sector has increased. As I’ve said, over 74 per cent now is where the demand is at right across every part of the sector. So, what we need to be able to do is offer more places. Now, we put in place a temporary measure which was designed to help the sector that was, when it was on the brink of collapse, when demand was collapsing. What we now have to do is design a package which deals with increased demand, and that’s what this package does.”

Dan Tehan, 8 June 2020 Press Conference

Given the Minister was aware at the time of three national surveys of a combined 25,000 parents that indicated at least a third of families would have to reduce the hours or days their children attend care when fees returned, it was a curious argument.

Now, there are two more independent pieces of research that confirm a reduction in demand is practically guaranteed when families are required to pay fees they cannot afford.

The viability of services will be threatened by such a fall in demand – as the Education Minister well knows. After all it was a dramatic drop in demand that required the minister to introduce the fee-relief in the first place.

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