RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

The decision to pull subsidies from childcare has caused alarm in the sector - especially because it is the first place the government has cut support.

Now questions are being asked about how the government interacts with women - and where its interests lie with regards to economic recovery.

Today, Gina Rushton on work, gender and politics.

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RUBY:

Gina, last week, the government ended its subsidies to the childcare sector, making it the first sector to have pandemic support measures withdrawn. Can you tell me what the reasoning was here? Why was childcare the first?

GINA:

Yeah. So last Monday, the government ended the free childcare scheme under which parents weren't required to pay fees, existing subsidies were suspended, and childcare centers were instead paid 50 percent of the hourly rate capped by the government.

RUBY:

Gina Rushton is a freelance journalist. She wrote about childcare for The Saturday Paper.

GINA:

It's the first pandemic support measure to be withdrawn, in what Prime Minister Scott Morrison foreshadowed early on in the pandemic as the snapback. So that moment when the coronavirus crisis ends and relief spending is cut. But of course, we only have to look at Victoria to say that the pandemic hasn't ended in Australia, nor has the economic impact it's having on families.

Archival tape -- Unidentified Reporter:

“Thousand of parents are facing the prospect of removing kids from childcare when it stops being free on July 12…”

Archival tape -- Unidentified Reporter:

“Parts of the sector are utterly bewildered by today’s announcement.”

Archival tape -- Unidentified Reporter:

“Returning to lockdown is a major setback as Australians attempt to recover from the impending recession and rising unemployment…”

Archival tape -- Unidentified Reporter:

“Now it’s going back to costs, like we can’t afford it anymore…”

GINA:

I asked the Education Minister, Dan Tehan, why free childcare was the first Covid 19 measure to be withdrawn. And he didn't respond to that question, nor did he answer as to whether he was concerned about the impact that withdrawal would have on children whose parents will no longer be able to afford childcare.

RUBY:

So what else do we know then about why the government made these changes and focused on this sector?

GINA:

A lot of stakeholders think it's just ideological. I spoke to Georgie Dent, who's the campaign director at parent advocacy group The Parenthood. She basically said she wasn't surprised the government was rolling back childcare first because of all the stimulus measures the government had announced, the subsidy for childcare was probably the furthest from its comfort zone.

Archival tape -- Georgie Dent:

“Of all of the radical decisions that the federal government and state governments have had to make this year because of Covid, I think the prime minister announcing that child care would be free even for three weeks, I was not surprised that that was the first decision to be wound back because it was so fundamentally different from what this government stands for.”

GINA:

Much like raising the rate of Newstart, this support measure was one of those that attracted memes about Comrade Morrison because it was part of that rapid reorganization of priorities we saw early on in the pandemic. Making childcare more affordable and accessible hasn't been a huge priority for this government.

Archival tape -- Georgie Dent:

“Umm, and I think that, you know, there was this fear that the longer it was in place, the harder it would be to take away. And so that's why I think there was sort of an ideological rationale behind that decision.”

RUBY:

Let's talk about the practicalities of the decision then, what is the impact of removing these payments for families?

GINA:

So parents will be pushed back onto the child care subsidy, which is what was on offer before the pandemic. It's a means-tested payment, but the average Australian family, with two parents and two children, spend about 25 percent of net income on childcare.

Archival tape -- Georgie Dent:

“Out of pocket childcare fees in Australia are very, very high.”

GINA:

The average OECD is 11 percent, so costs in Australia are double what they are elsewhere.

Archival tape -- Georgie Dent:

“Now with incomes and incomes being squeezed and household budgets being contracted, it's just no longer feasible for families to pay.”

GINA:

One woman I spoke to about this is Dani Dafoulis. Her husband had all of his work at the start of the pandemic cut and she pulled her children out of childcare to save money.

Archival tape -- Dani Dafoulis:

“I’m Dani Dafoulis, I'm a teacher at a public highschool in Geelong and a mother of two preschool kids.”

GINA:

She'd tried working from home with her two young children, but said it was just impossible to teach remotely and care for them. So she took advantage of the free childcare for a few months, which allowed him to look for work and her to work in peace.

Archival tape -- Dani Dafoulis:

“It was a massive relief and not having to pay that meant that we could still continue to do our grocery shopping as normal, buying the fresh fruit and veggies as normal. One less thing to worry about it made a huge difference to not only our purse strings but also our mental health as well.”

GINA:

Now that the scheme is ended, they're trying to pay childcare bills with her husband's JobKeeper payment and her part-time income.

Archival tape -- Dani Dafoulis:

“I just, I find the government approach to the importance of childcare not only from a feminist perception but also from a productivity perspective, if you want our economy to get back on track you’ve got to allow women the ability to work. And women are generally the primary carers and their incomes are the ones that suffer because of taking care of young kids. I just can see it chipping away at certain sections of society and they’re ones that don’t seem valued.”

GINA:

It's a pretty dire scenario faced by thousands of families right now. And I guess it's one of those situations we've seen again and again during the pandemic where the virus is shining a light on the existing cracks in a system. In this case, childcare.

Archival tape -- Dani Dafoulis:

“I think they’ve forgotten we exist. I feel completely invisible as a woman. The value that like - the value is placed on every profession that does not involve women as a majority. You know: jobs for the boys, jobs for the tradies. It's all about, you know, keeping the economy open. Construction work can continue. It just feels like the value of women's work is completely diminished and not even considered.”

RUBY:

We'll be back in a moment.

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RUBY:

Gina, the pandemic subsidy for the childcare sector was discontinued a week ago, and then a few days ago, the industry became the first to have the JobKeeper payment for staff cut off, too. Can you tell me about that?

GINA:

Yes. So on July 20, childcare workers, at least 90 percent of whom are women in Australia, became the first and only employees to be cut off from the JobKeeper scheme, which is funded until the end of September for the rest of the workforce.

Archival tape -- Dan Tehan:

“To ensure Government support is appropriately targeted, JobKeeper will also cease for the sector.”

GINA:

The government is instead going to pay operators a transition payment of 25 percent of their fee revenue until September 27.

Archival tape -- Dan Tehan:

“I’m confident that these transition arrangements will still enable families to get the care that they need…”

GINA:

And this is a workforce that's one of the lowest paid in the country. And Georgie Dent pointed out that when this decision was made, the expenditure review committee didn't have a single woman on it. So that's probably not insignificant.

Archival tape -- Dan Tehan:

“Until very recently that was comprised of five men. There is now a woman on it, but that is, you know, one of the most powerful groups making decisions in Canberra. And there is not a single female on that panel. And I think the decisions that we're getting certainly reflect that.”

RUBY:

So how will the end of JobKeeper affect both these workers and also the viability of childcare centers?

GINA:

Well, the sustainability of some services will be under question. There is this transition payment, but it doesn't equate to what many services were getting through JobKeeper. The Education Minister told me that the package had succeeded in its objective of keeping services open and operational as of July 1. But operational is not synonymous with sustainable. A May education department report noted that a quarter of childcare centers found the scheme had not helped them actually remain financially viable. And some childcare centers in Victoria are dealing with positive coronavirus tests from children or staff, and they've waited days for advice from the health department on exactly what they need to do.

RUBY:

And so is anyone proposing a different solution here? Is there something else that the government should be doing?

GINA:

Well, Danielle Wood, who is the chief executive of the Grattan Institute, pointed out that free childcare would cost the government 20 billion dollars a year.

Archival tape -- Danielle Wood:

“You know that's the ultimate level of support you can provide. But even if they don't think free childcare is sustainable in the longer term, we certainly would argue that a higher level of subsidy…”

GINA:

The institute's modeling showed a cheaper solution is a subsidy of 95 per cent for low income families, which tapered down to zero as the family's income increases. That would only cost the government about five billion dollars more than the current subsidy, but it would boost GDP by about 11 billion a year as more women entered the workforce.

Archival tape -- Danielle Wood:

“So this is a significant economic reform because it allows parents who would like to work more to do so, keeps them in the workforce, and really gives us a kicker in terms of the economy during a period where we really need it.”

GINA:

Wood said that even without a pandemic, there are strong disincentives for women, particularly those in relationships with men, to work more than three days a week because of how expensive childcare is.

Archival tape -- Danielle Wood:

“We all respond to incentives and the fact the that the deck is so stacked against working women who would like to work more hours if they have young children is a really terrible outcome for the economy and I would also say I think it's a terrible outcome socially. This is a major contributor to the lifetime earnings gap between men and women. You know, doing something about this, addressing these disentives that are put there by government policy would be the way to make the most meaningful difference to that.”

RUBY:

So do you think the government might look at this - this idea that subsidised or even free childcare would actually stimulate the economy at a level greater than what it would cost?

GINA:

I think change like that really does require a lot of political will and a genuine desire to give families more options and incentivize women's participation in the workforce. I think some people would argue it's about having a greater breadth of experience in the rooms where these decisions are made. And I don't think that's just about having women in the room, but about having people in the room with an understanding or, better yet, lived experience of trying to pay childcare fees on anything other than, you know, two chunky salaries. This was a really easy opportunity to both support a very female-dominated industry that had been hard hit by this pandemic, and to also continue to support mothers, particularly working mothers, to continue to participate in the workforce. And I think that was a really lost opportunity to prove that they were committed to, I guess, mitigating some of the effects on women as a result of this pandemic.

RUBY:

Gina, thank you so much for your time today.

GINA:

Thanks so much, Ruby.

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RUBY:

Also in the news:

Australia had the largest single day of new cases of coronavirus yesterday, with 502 new positive test results.
484 of those are in Victoria, with 16 new cases in New South Wales.

The Victorian Premier Daniel Andrews said nearly 9 out of every 10 people diagnosed in Victoria recently did not isolate in the time after developing symptoms and before getting tested.

The Premier also warned the six week lockdown could be extended.

There are now 45 aged care facilities in the state with outbreaks… and face masks are mandatory in public in Victoria as of today.

I’m Ruby Jones, this is 7am.