Childcare centre places falling - and subsidy glitches are to blame, say critics

An increasing number of parents are pulling their kids out of childcare, with many saying the government’s problem-ridden subsidy system is to blame.

More parents are pulling their kids out of childcare and centres are considering laying off staff, as the sector suffers financial headwinds.

The number of children in early childhood services fell 24,280 or 2.7 per cent in the

September quarter on the previous year.

Sector advocates say the government’s problem-ridden child care subsidy that came into place in July is partly to blame.

But the government maintains it is investing $8.3 billion in early childhood this financial year.

Labor says it will overhaul the subsidy if it wins government.

Official figures show the total number of children in early childhood care services (long day care and family day care) fell from 910,060 in September 2017 to 885,780 in September 2018.

Sector advocates say many parents and centres are confused by the new system and are taking kids out of care or not attempting to navigate the system in the first place.

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The number of children in care declined 2.7 per cent in the September quarter, year on year.

A design failure of the revamped child care subsidy has also resulted in centres being left with debts and having to consider cutting staff or programs.

Under a glitch in the new system when a family transitions out of childcare into schooling or switches providers, centres are still having childcare subsidy withdrawn from their accounts by the government.

It’s leaving centres chasing debts and contemplating disbanding programs.

“I think the YMCA put it best when they said we have become the government’s debt collectors,” one provider wrote in an email.

“Just last week we had an issue backdated resulting in a $2000 debt.”

Labor’s early childhood spokeswoman Amanda Rishworth said the Coalition’s child care subsidy was “a system which is burying families in red tape and turning child care centre operators into Scott Morrison’s part time debt collectors”.

“Instead of focusing on children and providing early education, child care centres are having to worry about chasing debts. 

“It is the government’s responsibility to provider a fairer system that works for both families and child care centre operators.”

Labor’s early childhood spokeswoman Amanda Rishworth. Picture: AAP Image/Kelly Barnes

John Cherry, advocacy manager at Goodstart, said there were “glitches” involving payments to too many families particularly some of the most vulnerable.

“The Government needs to prioritise fixing the system so that families, particularly the most

vulnerable, do not face unexpected payment glitches.”

Nesha Hutchinson, Vice President of the Childcare Alliance, said it was putting centres in a tricky position.

“These are problems that weren’t foreseen by the people who set up the system and it’s putting enormous pressure on centres,” Ms Hutchinson said.

Education Minister Dan Tehan said there was no decline in the overall numbers of children in

childcare services.

“The number of children in centre-based care is up, as is the number of children in before and after school care,” Mr Tehan said.

Education Minister Dan Tehan. Picture: Gary Ramage

“The only reduction is in family day care, where our government has taken compliance action to stop rorting, including the payment of subsidies for fake children. Labor totally dropped the ball on compliance.

“Under Labor, the number of compliance checks actually fell from 763 to 523 — a paltry effort when compared to this government’s 3900 compliance checks in 2017-18.

“We’re investing $8.3 billion in early childhood in 2019-20. Our new child care package is benefiting nearly one million Australian families who are balancing work and parenting responsibilities.

“ABS data shows that out of pocket costs for families fell by more than 10 per cent in the first six months of the package.”

Originally published as Childcare centre places falling - and subsidy glitches are to blame, say critics