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Could Scott Morrison’s $1.6 billion free childcare giveaway turn into the Liberal’s very own pink batts fiasco?
Morrison seemed somewhat confused on the purpose of the Early Childhood Education and Care Relief Package — appearing to cite two very different reasons for its implementation.
First, he claimed the policy was about protecting parents: “This virus is going to take enough from Australians without putting Australian parents in that position of having to choose between the economic wellbeing of their family or the care and support and education of their children.”
This ignores that parents have always had to make that choice. We already have policies that ensure low income families (rightfully) pay very little for childcare. While there’s an argument that childcare should always be free (like government primary schools), the virus shouldn’t fundamentally change that principle.
If the problem is that essential workers aren’t able to look after their kids, then a specific subsidy of a narrow band of workers would have solved that. Instead, we’re giving money to wealthy parents (many of whom are working from home now) to encourage them to dump their kids in childcare to be looked after by a minimum wage worker.
But it gets worse.
Morrison’s other motivation for the scheme appears to prevent centres from collapsing because parents are not sending their children to childcare.
Leaving aside the problem with picking specific winners and losers when much of the economy is on its knees, childcare centres may be relatively well-placed financially compared to most sectors. While revenue has dropped, it has fallen far less than restaurants or retail (childcare provider Goodstart Early Learning claims their revenue has fallen by less than 50%).
Operators’ main expense — staff — may be covered by JobKeeper. (Education Minister Dan Tehan claimed 60% of centre costs are wages.) Variable costs, such as food and marketing, fall significantly, which leaves rent, which can be negotiated down. Well-run centres are probably still making money at the moment.
Even worse, the not-for-profit Goodstart, Australia’s largest childcare operator, doesn’t even qualify for the boondoggle because its revenue is over $1 billion. Rather, the beneficiaries are wealthy private equity operators like Bain Capital, which owns high-end centres like Little Learning School and Only About Children, or the publicly listed G8 and Evolve Education (whose majority shareholder is former rich lister Chris Scott).
Evolve’s share price rose 13% yesterday. Since when is the role of government to bail out billionaires? Oh, wait.
But the inequity of the handout to the rich isn’t even the worst part of Morrison’s latest idea.
Childcare workers have told Crikey that they are distraught with the impending influx of children to centres. Childcare workers are already fearful of having to work during the pandemic, while most parents are helping out by keeping their kids at home. Morrison’s policy effectively bribes parents to send their kids to childcare.
While opening schools is dubious (the vast majority of countries have shut theirs), childcare is far riskier.
Unlike school-age kids, babies and toddlers are simply too young to socially distance, and parents have to physically enter centres to drop off kids. For safety reasons, virtually all centres funnel people through a single entry.
Parents then spend several minutes dropping off kids, usually in confined spaces, while a childcare worker on minimum wage is exposed to literally hundreds of adults who are potentially infected. While children themselves may not be carriers, their parents certainly could be.
Not only is this policy blatant welfare to the rich (be it well-off parents or even wealthier centre owners), it places every childcare worker at serious risk.
This policy isn’t merely unfair — like Labor’s infamous home insulation program, it could be potentially deadly.
Is it a coincidence that so many LNP MPs have money in child care centres?
Yes! All the child care centre owners and managers are happy but the low paid workers are distraught. The phones started ringing off the hook after the PM’s announcement with parents working from home or not even working at all wanting to bring their kids back for free child care. Many of these child care workers have elderly parents or school kids of their own at home. It is so unfair. They were hoping the child care centres would be closed because they are just a cesspit of germs at the best of times. They get every bloody bug going around. Also a lot of them have had to put off casuals and have been working long hours. It is incredibly unfair. These people are very low paid for what they do.
And let’s not forget this affects Outside School Hours Care too. Up to 400K children per day (sans virus), with a workforce that is even less secure and more poorly paid with its own cohort of questionable corporate providers.
Good point Adam. The best solution would be to nationalise child care. That would not occur to #ScottyFromMarketing in a million years. And if, or when, nationalisation becomes unavoidable, he just bumped up the price all in the pursuit, as you say, of subsidising the rich.
PS Pink Bats was not dominantly a Labor fiasco. It was a free enterprise fiasco. Labor didn’t kill any inexperienced workers. Greedy employers getting their snouts in the trough facilitated every one of those lamentable deaths.
Glad someone pointed that out!
I wouldn’t post my opinion in a lot of forums because of the flaming that would result ….but….of all the stimulus incentives rolled out I struggle to think why this one has been so gleefully accepted. If this was a Labor policy the Murdoch press would go ballistic. As I said to my wife earlier today…If I had the good fortune of being a plumber, and you were a GP, then we could have free childcare when previously we would have been paying. Both our jobs are secure and incomes have not been affected and yet now we are getting a free kick that will need to be paid for at some time in the future…but not by us. How is that fair? On top of that child-care businesses have copped a lot of justified criticism in the past for price gouging which I guess they are now used to. My only reasoning now is that the Government thought it would be too hard to apply a needs test, but I’m 100% sure that in any other circumstances there would be a lot more criticism than there has been.