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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.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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