Federal Government picks up childcare bill for next six months

Working parents’ fears they may not be able to cover the cost of childcare during the coronavirus crisis have been allayed by the Federal Government.

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In a massive win for families, childcare will be free during the coronavirus crisis.

The latest extraordinary intervention by the federal Government should also avert an industry collapse that would have cost 200,000 people their jobs.

The price of picking up the full tab for childcare, including that provided outside school hours, will be $1.6 billion over six months.

That is a net increase of about $300 million because under normal circumstances the Commonwealth would have paid about $1.3 billion in fee subsidies during that time.

Savings will be felt by as many as 312,000 NSW families and nearly one million ­nationally, with means-testing dumped.

Stephen and Abby King send their boys Jackson, 4, and Ryan, 1, to childcare. Picture: Rohan Kelly

Prime Minister Scott Morrison said priority would be given to the children of working parents, vulnerable and disadvantaged kids and those already enrolled. But the government expects no families will miss out.

“We will be ensuring for those parents who are still in that position where they are needing that childcare, it will be free,” Mr Morrison said.

Attendances have fallen about 70 per cent in the past fortnight, Australian Childcare Alliance vice-president Nesha Hutchinson said.

These absences were quickly turning into permanent cancellations, making it financially unviable for centres to operate.

Prior to the government’s announcement, about 30 per cent of providers were not planning to open after this weekend.

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Now their revenue will be reset to what it was just before the COVID-19 hibernation began, plus they will get about $1 billion via the new JobKeeper wage subsidy.

“We were getting so close to the line,” Ms Hutchinson, who also runs her own childcare centre, said.

“Now, the majority of the sector will be saved.”  

But the nation’s largest provider, Goodstart, said its future remained uncertain because it may be ineligible for JobKeeper.

It has annual turnover of slightly more than $1 billion — the level at which the threshold for access to the wage subsidy increases from a 30 per cent decline in business to 50 per cent. No other operator is in this position.

“We are seeking an urgent commitment from the Government that Goodstart can access the JobKeeper payment at the 30 per cent benchmark for our people — only with that commitment can (we) keep our services open for 60,000 families,” Goodstart said in a statement.

Parents Stephen and Abby King, who have been sending their two boys Jackson, 4, and Ryan, 1, to childcare during the pandemic, said it was ­important help was provided to anyone working.

“We are both in roles that are customer centric and ­require us to be on the phone or on video conferences frequently and it makes it really hard for us to do our jobs when the boys are around,” Mrs King, who works part time for a HR recruitment agency, said.

Mr King, who works full-time as a technical account manager for a cyber security company, said the PM’s announcement was a “major relief”.