Squeeze on early learning could cost parents and close centres

04 September 2020

Community and privately-owned centres being squeezed from multiple angles are asking for relief before it ends up costing parents or closing small businesses.

Early learning participation for the middle week in August was 56.1%, down 40% for the same period before the last election, and it’s having a knock-on effect.

“Whether it’s nervousness about COVID-19, or parents losing their jobs, many are keeping their children home. We applaud the Minister’s call for parents to bring them back to early learning, but it may be too late for centres under severe pressure,” said Early Childhood Council CEO Peter Reynolds.

“We don’t want teachers’ jobs or children’s education to be affected more than they are already.”

Like many small businesses, community and privately owned centres had the Wage Subsidy door slammed shut when the eligibility requirement went from 30% revenue loss to 40%.

Many were penalised because an insurance payout for some of the revenue loss meant they had to repay their entire wage subsidy rather than any wage component. One centre reported they had to repay all of their Wages Subsidy after receiving an insurance pay out of around 20% of the subsidy’s value. With centres penalised for applying for wage subsidies on behalf of casual relief teachers unlikely to do so again, that risks putting more and more teachers out of work.

Even the teacher wage increase announced in the last budget is hitting centres, with the funding increase falling short of the new wage rates for many centres.

“Something has to give. It seems centres’ only options are dipping into their own funds or raising fees for parents. The first option isn’t sustainable forever, and they’re reluctant to ask struggling parents for more. When the wage subsidy is under subscribed, surely there are better options available.”

“We support the introduction of the Urgent Response Fund, but have no information on how many centres will benefit and what they’ll use it for, and are concerned by reports of regional variations in distributing funds. We had hoped the Ministry would be more proactive and transparent in its strategy for the Fund.“

“With so many centres close to the edge, we’re asking the Minister to make some fast, common sense decisions on these issues and bring relief to early learning,” said Mr Reynolds.

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