Impact of Tony Abbott’s Family Day Care cuts


MARK COLVIN: Family day care providers are scrambling to come up with new funding after Government budget cuts. The Prime Minister says he wants to put more money into childcare, but the details aren't clear.

The Government's changes to the Community Support Program - worth $157 million - mean that the childcare places of more than 100,000 children could be at risk. Family day care providers say the cut in funding means they'll have to pass on costs to educators - many of whom will go out of business.

They say the upshot is that families will lose precious child care places at a time when those places are already in short supply. David Mark reports.

DAVID MARK: This morning on AM, the Prime Minister, Tony Abbott, announced that he was going to rejig his paid parental leave scheme to funnel more money into childcare.    

TONY ABBOTT: And we are going to redirect the savings into childcare, because it needs to be a holistic families package and people do want better childcare - more available, more affordable childcare.

MARK: That left many people in the family day care sector scratching their heads. That's because in the May budget, the Government announced it was going to save $157 million by changing the eligibility for funding to providers of family day care.

Kate Ellis is the Opposition spokeswoman for education and early childhood.

KATE ELLIS, SHADOW MINISTER FOR EARLY CHILDHOOD: Well it's clear that the Prime Minister is just making things up day to day now. I mean we've heard him say that they're looking to provide more support for childcare, but they've now cut over a billion dollars from the childcare sector since they came to Government.

And the best example of that is family day care, which was specifically mentioned in the papers when the Prime Minister was briefing about this change of heart he's had, but they've cut $157 million. And unless they stand up and admit they've got it wrong and they're returning that money, that we know that this is all just rubbish that the Prime Minister is talking about to try and save his own skin.

AMANY MIKHAIL: It's not clear what he wants to do.

MARK: Amany Mikhail is one of the directors of All Family Day Care. It's a for-profit family day care scheme in Western Sydney that oversees 73 family day care operators.

MIKHAIL: I mean in one breath they're cutting down the – well they've really cut the funding for family day care and now he's putting money in, how's he doing that? Where is he putting that money?

MARK: The Government's changes, which will come into place in July next year, means only regional and remote areas will be funded.

The Assistant Minister for Education, Sussan Ley, wasn't available for an interview. Her spokesman said the Government would work through the final details over the summer, and she wouldn’t speculate further on the measures.

The change did not amount to a budget cut; rather it was bringing the funding back into line. Even so, Amany Mikhail has budgeted for the money. She now says she won't receive any more Government funding.

MIKHAIL: Because you have to be either the sole provider in that area, situated in a low socio-economic area, that it's just going to make it really difficult for any scheme to be eligible for that funding.

MARK: Well now your service is based in Mt Druitt, which is probably one of the lowest socio-economic areas in Sydney.

MIKHAIL: Exactly.

MARK: Will you be affected?

MIKHAIL: Yes definitely, because there are six schemes in the Mt Druitt area, and because we are in a low socio-economic area, we definitely will be affected, because we're not the sole providers in that area. And look there's a huge demand and that's why there are six schemes in this area.

MARK: It's not just for-profit providers that are affected. Around Australia local council run family day care programs are threatened, as are those run by the charity and not-for-profit sector. They're all scrambling to make up a shortfall of around $35 per child per week. Kate Ellis.

ELLIS: Well we've heard from family day care providers that they're concerned that this will mean the parents will pull their children out of their care. We've also heard from some that are reassessing their viability and potentially looking to close down.

MARK: Amany Mikhail is one of them.

MIKHAIL: We may have to close our doors, which is a you know - or we put our levies up and at the moment when we worked it out and we're looking at putting our levies up, parents can't - because of where we're situated and the low socio-economic area, if we put our levies up to cover the funding costs, parents won't be able to afford it.

MARK: So what would those families do if the service wasn't available in your area?

MIKHAIL: They would have to give up work, because there's not enough centres around that could take their children. Or the other alternative is to get people to do it privately, and that's going back now to where we were 34 years ago where you've got people doing it backyard babysitting really.

COLVIN: Amany Mikhail runs a family day care provider service in Western Sydney, David Mark was our reporter.