A crisis for some, a godsend for others: The debate around stopping free childcare in July.


First the crisis. Then the Godsend. Now, another setback.

When Caitlin lost her job as a marketing executive, her household income halved, and the exorbitant cost of childcare was no longer feasible.

But when the Government announced all childcare bills would be picked up by them, it not only reduced their family’s bills, but allowed Caitlin the freedom to actively build her own business, focus on a new degree and look for a new job.

“At this point, I am not making any money. But I have time,” Caitlin, who has since started her own digital marketing and consulting business, shares with Mamamia.

She and her husband have two children, aged two and four, both of whom have stayed in childcare thanks to the subsidy scheme introduced by the federal government in early April.

free childcare ending
Caitlin with her family of four. Image: Supplied.

Now, however, the Morrison Government has announced that free childcare will cease to exist from July 13. And Caitlin is one of thousands of parents facing the very real prospect of withdrawing their children from early childhood education because they simply cannot afford to keep going – an option they fear, because it will mean giving up their coveted spot to another family.

“Not to mention how much my kids genuinely love their preschool - the social and developmental aspect is very important to us. So we are trying to find money.”

Alas, there is little option.

“At this stage we’ll likely take out our two-year-old… His fees are the highest and we will keep the four-year-old in for his development. He goes to school in 18 months, and it’s important he keeps up the social interactions.”

Caitlin isn’t alone in making this difficult decision.

According to a recent survey of about 2,200 families by advocacy group The Parenthood, around one third of families have indicated that – just like Caitlin – they will have to pull their children out of childcare or reduce the hours upon the return of fees.


The consequence of families withdrawing their children from centres could once again be disastrous for the sector.

Georgie Dent, part of advocacy group The Parenthood, says the government’s decision is “premature” and makes “the assumption that the economy is going to be back to normal in four weeks time”.

Watch: A clinical and health psychologist helps break down how you can help your children if they're experiencing anxiety during the pandemic. Post continues after video. 

Video by Mamamia

At the moment, childcare attendance has returned to 74 per cent of pre-crisis levels.

But as Dent shares, “If even 10 per cent of families take their kids out, it is no longer financially viable for services to keep their doors open. If occupancy rates fell to 64 per cent, for example, that's below break-even point and services will not be able to function.”

On top of this, those parents who do choose to take out their children will also have to reduce their own work hours as a result.


“And in the majority of cases, the person who's going to stop work will be a woman, which will further entrench inequality,” Dent says.

On the other hand, childcare centres tend to agree that free childcare needs to end.

From their side, ‘free childcare’ meant the government was paying just 50 per cent of their pre-pandemic fee revenue. Many of the centres simply can't afford to operate at this cost.

It's been particularly hard on local services, with many having to stand down staff and reduce the number of places for children, negatively impacting their reputations and relationships with families.

“I’m glad things are going back to normal. Free childcare seemed like a good idea but when centres were only receiving 50 per cent of their income, it really was never going to work,” one early childhood educator, who chose not to be named, told Mamamia.

A Centre Coordinator from Melbourne also spoke to us, saying that whilst the scheme allowed them to keep afloat, the ceasing of free childcare “has brought us hope in sustaining our service, compared to the possibility of it continuing until September.

“As a service, the reintroduction of fees may see some families end care, however, we have been overwhelmed by the amount of enquiries from prospective families looking to start care. Families that leave could be balanced out by new families entering care.”

Parents will pay childcare fees as of mid-July. Image: Getty.

Upon talking to different sides of the debate, there was one universal sentiment: the childcare industry is woefully undervalued.

On Monday, the government also announced they will stop JobKeeper payments to the sector on July 20 – the only industry so far that will stop receiving the subsidy prior to the initial September end-date.


“To cut back JobKeeper for our sector only tells us that along with poor award and pay, our politicians will only ever see us to be ‘babysitters’ even when announced as ‘essential workers’ in a pandemic,” one early childhood educator told Mamamia.

“Ending the JobKeeper package just truly shows what the government thinks of early childhood care. They are saying that they do not care if we sink or swim,” another expressed.

Georgie Dent agrees, and says this crisis should be a watershed moment to overhaul Australia's pre-pandemic childcare system, which is among the most expensive in the world.

Here, a family with two children in care spends around 25 per cent of their household income on childcare, Dent explains. In other OECD countries, the average family will spend 11 per cent of their income.

“This pandemic has exacerbated and accelerated some of the problems that we had in terms of the way we fund early childhood education and care.

“One of the fundamental objectives that needs to be achieved through any reform is ensuring that early childhood educators are paid appropriately because they are among the lowest paid workers in Australia, despite the fact they perform a service that is absolutely vital.”

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