How reintroducing childcare fees will put a ‘handbrake’ on women’s participation in the workforce

Parents will pay for childcare once again from July 13, bringing an end to the “free” childcare the Morrison Government announced to support parents and the sector throughout the pandemic.

The changes come as women have already lost more jobs than men during the economic fallout of COVID-19.

And as women’s workforce participation has already gone backwards, dropping 2.9 percentage points according to May figures, compared with a male participation fall of 1.9 points.

The changes come again following a $60 billion accounting error discovered on the JobKeeper scheme, which many are suggesting could be used to further support the childcare sector, enabling children to gain access to vital early childhood education and parents to keep working, studying or looking for work.

And, this announcement comes just a few days after the construction sector received a $688 million stimulus package, in order to promote a “tradie-led recovery”. The construction sector is heavily male-dominated, and it’s already well paid.

While this switch may be welcomed by some childcare services, particularly those that have maintained their numbers and were unable to access JobKeeper for their staff (with family day care centres in many cases worse off under the changes announced in April), it’s a shift that looks set to hurt families, particularly women.

Under the changes announced by Minister Dan Tehan, the free childcare period will end on July 12, while JobKeeper assistance to the childcare sector will come to an end a week later on July 20. A $708 million package has been created to assist the sector in transitioning back. While the childcare subsidiary will be reintroduced, the criteria will be loosened for parents hit by the economic downturn, until October.

The transition payment is set to run from July to September. It will be split between childcare services and offer 25 per cent of their fee revenue from late February, in order to replace JobKeeper — and fill in gaps where centres were unable to access JobKeeper.

Tehan said the shift will provide a more equitable distribution of support across centres, which is certainly welcome, but he conceded the transition funding would “probably be a tiny bit less than what Jobkeeper would be”. The additional support for parents during these past few months was only ever meant to be temporary, said Tehan. It was to prevent the system from collapsing as the COVID-19 pandemic took hold in Australia and kids were pulled from care.

Childcare will be unaffordable

But the problem, as many parents know all too well, is that the economic fallout from the pandemic — jobs lost, hours cut back, a shift to a $1500 a fortnight Jobkeeper payment in place of a previous salary — means the cost of childcare may simply be unaffordable. While some relaxing on the activity test for the childcare subsidiary will be welcome, limiting the relaxation period until October is problematic, given we’re being told the economy is likely to struggle for a long time to come yet.

And receiving special consideration for the relaxation requires both parents in two-parent households to be employed or engaged in recognised activities, meaning they’ll need to be working, studying or volunteering in order to receive 100 hours of subsidised care a fortnight. So what if one parent has lost a job? What if 2020 is possibly not the year to kickstart that new course or program?

Those parents on JobSeeker payments will be able to access 72 hours of subsidised care a fortnight. Finding a job without solid care arrangements in place is difficult in the best of times. What about during a recession?

Last week, research from The Parenthood revealed that for one third of parents, a return to pre-pandemic fees would see them needing to reduce the number of days their children were in childcare, or to remove their kids altogether.

If that happens, then there will be significant pressure placed on the sector, given they’ll be unable to operate at current levels with fewer children enrolled.

But it also means that parents will be scaling back on the days they are working, the hours they can dedicate to their businesses, and or their ability to search for work at all. We know that women will take on the brunt of these scale backs, thanks to the gender pay gap, career breaks, overrepresentation in the part-time workforce and longstanding social stereotypes regarding who does what at home.

My colleague Georgie Dent has been acting as the campaign director at The Parenthood during this period, advocating against any “snap back” to the previous childcare system.

As she told me this morning, the latest decision looks set to have a disastrous impact on children, women and the sector:

“In global terms, before the pandemic, Australia’s childcare was prohibitively expensive for families and particularly punishing in effect to secondary earners, who in Australia are more often than not women. Given we know women are bearing the brunt of job and income losses post COVID, we know the return of childcare fees will make paid work even more difficult for women to maintain.”

And the situation is dire for the childcare sector itself:

“While the interim funding package is a welcome reprieve for services that have been pushed to the brink financially, the government’s decision fails to address the issue of affordability for families. Attendance rates are still only at 74% of pre-pandemic levels which isn’t sustainable, and that is without fees being charged.

“The return of fees will almost certainly lead to a drop in demand. Because of the widespread job and income losses among families, this will threaten the viability of services because if up to a third of children are taken out of care or have the number of days they attend reduced, centres won’t be able to stay open.”

According to Early Childhood Education CEO Samantha Page, the transition package will create “additional complexities and uncertainties for both services and families”.

She said it will be difficult for centres to determine their future revenue, and that the changes fail to address the fact that many families have entered a period of lower income and uncertainty about their financial futures.

“‘We are very concerned that the Minister’s decision will entrench the negative impact of COVID-19 on women and young children. It will also add to the chaos and uncertainty among early childhood education and care services,” she said.

With the early childhood sector being female-dominated and underpaid, Page also raised concerns about the incomes of educators.

“Some ECEC [early childhood education and care] services have only just navigated the complexities of receiving JobKeeper status and all eligible services will have budgeted on having JobKeeper available until the end of September 2020 — a position that was reaffirmed by the government as recently as last Friday during the Prime Minister’s media conference’.”

Since 2012, we’ve been hearing from the Grattan Institute that if we could increase female workforce participation by around 6 per cent, we could increase the size of Australia’s GDP by a staggering $25 billion a year.

We’ve made some progress, but it’s been slow — and seemingly precarious, given how quickly COVID-19 was able to wipe out some of the gains made.

What can we expect to see now for women’s workforce participation, as childcare becomes unaffordable for so many families who need it?

Labor’s Amanda Rishworth described this “snap back” on childcare by the government as potentially creating a “handbrake on the economy”.

For many working mothers, it will be a handbrake on their careers, and consequently their businesses, their pay, their superannuation and their financial freedom.

This article was first published by Women’s Agenda.

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