Australia’s childcare workers will no longer be eligible for JobKeeper support payments from Monday as they become the first group to be cut from the $70 billion scheme.
It comes after the childcare sector last week ended the free childcare scheme, now replaced by the Child Care Subsidy (CCS).
Announcing the changes in June, Education Minister Dan Tehan said the CCS should cover only a “bit less” than the JobKeeper subsidy but would cover a greater portion of the childcare sector.
"What we have seen is demand grow and grow over the last few weeks so that we needed to change the system," Tehan said.
"This system was designed for when demand was falling. Now, we are seeing demand increasing."
The CCS funding will cover the sector until 27 September, when the broader JobKeeper scheme is also set to end and will pay for 25 per cent of the fee revenue child care centres received before Covid-19.
Services will need to guarantee employment levels to protect staff as JobKeeper is pulled and tests for families will also be eased.
Shadow early education minister Amanda Rishworth warned there was “great concern” across the sector about the financial implications of future outbreaks.
“My question is will we see more early educators lining up at Centrelink as a result of this? It is the wrong sector I think to be trialling the early wind back, because the government’s done no research into what will happen once fees comes back and what will happen to demand. There could well be a reduction in demand, leaving early educators very vulnerable to losing their jobs,” Rishworth said on Sky News.
“We saw this as one of the services that had to keep going to ensure that essential workers could go to work. They’re still operating in Victoria because without them the doctors, the nurses, the shop assistants, the aged care carers, they can’t go to work. So this is actually an essential economic pillar in our society if we want to keep functioning.”
“The removal of free childcare will be a big first test of the political reaction to the government winding back Covid-19 emergency help,” said University of Canberra fellow Michelle Grattan.
“The government’s announcement will also test the fallout when JobKeeper assistance, which was set to run until late September, is taken away in certain circumstances or replaced by industry-specific assistance.”
Treasurer Josh Frydenberg has confirmed further income support measures will be delivered, with the government set to announce its mid-year economic update on 23 July.
It’s expected the government will unveil the next phase of JobKeeper in that update, but Frydenberg and Finance Minister Mathias Cormann have already confirmed the next phase will see targeted support for struggling industries.
“It is clear the economy will need further economic support and we will continue to do what it takes to keep businesses in business and Australians in jobs,” Frydenberg told The Australian.
He said further support is required as the Victorian spike presents major health, economic and confidence challenges.
Cormann has also said businesses that have recovered can expect to lose JobKeeper support.
“Businesses that have recovered or are recovering clearly won’t need the sort of support that has been in place over the last few months on an ongoing basis, but other businesses will,” Cormann said.
“It will come down to making sure that we properly assess the need, and identify and target support into those areas where support is indeed needed.”
The tourism sector, aviation, hospitality and the arts are among the top industries expected to receive extra assistance.