ECEC and the COVID-19 pandemic: A chronology of events from 1 March 2020
Since the onset of the COVID-19 pandemic the early childhood education and care (ECEC) sector in Australia has experienced a series of unprecedented events in its struggle to remain viable in the face of almost overnight collapses in enrolments of a magnitude never experienced before, triggered by circumstances that were completely outside of its control.
This article aims to chart the key developments that took place over this period starting from 1 March 2020, at which point Australia had reported just 14 cases of the virus, and concerns from an ECEC perspective were still quite nascent and largely focused on specific communities.
For ease of reading the events have been organised in weekly increments with links to the entries provided to. It is not to be considered an exhaustive list but every effort has been made to capture the key moments.
Week 1 – 2nd March to 8th March
The Prime Minister updated travel restrictions to include South Korea who joined China, Iran and Italy. No social distancing measures had yet been introduced.
New South Wales became the first state to close a school due to a COVID-19 case with Epping Boys High School closed for one day.
53 new cases of COVID-19 were reported across Australia in the week bringing the national cumulative total of cases to 67.
Week 2 – 9th March to 15th March
The Prime Minister addressed the nation about the COVID 19 pandemic, launched the Government’s first support package and established the National Cabinet to help coordinate the response to the pandemic.
The Australian Health Protection Principal Committee (AHPPC) issued a recommendation to advise against public gatherings of more than 500 people.
Dan Tehan, Federal Minister of Education, provided his first direct statement referencing ECEC in the wake of early advocacy activity from the sector’s peak bodies, highlighting priorities to help protect the sector and a set of measures including the use of absences for those impacted by the COVID-19, along with assurances that additional days would be forthcoming and that the Community Child Care Special Circumstances Fund would be available to support providers in need financially.
Victorian Premier Dan Andrews becomes the first Premier to articulate that school closures were a possibility, going one step further and saying they were an “inevitability” as community transmission of the coronavirus makes containment impossible.
Evolve Education Group released a trading statement confirming that as yet trading had not been impacted by COVID-19 and reconfirming guidance for 2020, and Think Childcare released a trading statement highlighting that thus far COVID-19 had not impacted on centre demand.
The Australian Childcare Alliance released an updated COVID-19 FAQ’s, Fair Work provided a guide to employer obligations during COVID-19, the Federal Department of Education issued a COVID-19 information packs and The Sector published their Resources for ECEC decision makers.
216 new cases were reported across Australia in the week bringing the national cumulative total to 283.
Week 3 – 16th March to 22nd March
Travel restrictions were extended to include new self isolation requirements on all international arrivals and a step up in social distancing measures to include restrictions on non essential indoor gatherings of 100 people or more. Venues such as pubs, clubs, gyms and cinemas were closed, as the National Cabinet stepped up the fight against COVID-19.
State Governments started to update ECEC specific COVID-19 guidance with NSW and Victoria taking the lead.
Sparrow Early Learning reported the first ECEC sector temporary shutdown, after an educator tested positive for the virus, and Goodstart’s head office moved to a work from home model after an employee was found to have tested positive for COVID-19.
1,057 new cases were reported across Australia in the week bringing the national cumulative total to 1,340.
Week 4 – 23rd March to 29th March
Social distancing rules were tightened meaningfully with National Cabinet confirming both indoor and outdoor gatherings were to be limited to a maximum of two people. State and territory Governments then moved to implement the changes.
Schools started to wrap up Term One early with both VIC and ACT schools closing schools in the week and other states preparing to follow suit.
In response to an increase in reports that ECEC service enrollments were starting to suffer from parent withdrawals, Federal Education Minister Dan Tehan confirmed an expansion of his initial support measures with services now able to waive gap fees and that absences would be lifted beyond the current 42 days.
Soon after Early Childhood Australia issued a statement expressing their disappointment at the measures announced, and that the sector was in a “state of crisis”, with CEO Sam Page later in the week appearing on ABC’s RN Drive with a stark warning that the ECEC sector was on the verge of collapse, that up to 50 services had already closed their doors already, and urgent assistance was required.
Ms Page’s call was backed by both the Australian Childcare Alliance and the Early Learning and Care Council of Australia (ELACCA) who issued statements soon after highlighting the unprecedented challenges being faced across their member bases and the need for immediate support to avert disaster. A coalition of large Outside School Hours Care providers also moved to highlight the challenges being faced in their portion of the ECEC community.
Mayfield Childcare became the first listed operator to defer their dividend as a precautionary measure, and both Charter Hall and Arena REIT take action to preserve liquidity and update expectations on the impact of COVID-19 on trading. Evolve Education confirmed that their entire New Zealand network would close as the country moved to a Level 4 lockdown.
The Education Council met as expectations grew that the ECEC sectors calls for more assistance would be heard but failed to provide any substantive new policies to support the sector.
2,630 new cases were reported across Australia in the week bringing the national cumulative total to 3,970.
Week 5 – 30th March to 5th April
The Government announced its third COVID-19 stimulus package at the heart of which was the JobKeeper package extending $1,500 per fortnight per eligible employee as an incentive for business to maintain staff levels despite collapses in revenue.
The new policy would see eligibility extended to all businesses that could meet a decline in revenue test, which at that point in time was 30 per cent for businesses with revenues of less than $1 billion and 50 per cent for businesses with more than $1 billion.
On 2 April, three days after the JobKeeper announcement, the Prime Minister unexpectedly announced an ECEC dedicated relief package which would see families receive free childcare up until 28 June 2020 and ECEC services in exchange receive a direct payment, in lieu of fees, from the Government in lieu of fees for the same period.
The new ECEC Relief Package would replace the CCS system and would see services receive a lump sum payment equal to 50 per cent of the revenue (CCS plus gap) the service generated in the reference period between Monday 17 February and Sunday 1 March.
Although many questions about eligibility for the two packages remained unanswered, peak bodies acknowledged the importance of JobKeeper and the ECEC Relief Package working in tandem and applauded the Government for their actions.
In the wake of the JobKeeper announcement G8 Education provided an update on its cash position and a deferral in its dividend payment and then moved to suspend their shares from trading pending the ECEC Relief Package announcement.
The Education Council confirmed four areas of time-limited ECEC regulatory relief in the areas of A&R, qualification waiver processing, fees and charges and rapid operational adjustments required.
1,706 new cases were reported across Australia in the week bringing the national cumulative total to 5,676.
Week 6 – 6th April to 12th April
Question marks about eligibility requirements for both JobKeeper and the ECEC Relief Package started to be resolved with Goodstart formally receiving a reprieve due to its $1 billion revenue status, not for profit 15 per cent “decline in revenue” guidance being provided, and clarification of family day care and in home care participation in the programs.
An Exceptional Circumstances Supplementary Relief Payment under the Early Childhood Education and Care Relief Package to support services disadvantaged by the Relief Package or who had seen increases in occupancy since its implementation was launched with additional details on how to access the funding provided.
Reports of council run services closing began to increase as their exclusion from the JobKeeper program began to bite although the NSW Government quickly stepped up with funding to support their council services.
Multi service charities that ran extensive ECEC networks started to raise the alarm that their ECEC divisions would not be eligible for JobKeeper despite suffering the same falls in occupancy that the rest of the sector had experienced, and called for urgent support from the Government.
G8 Education confirmed that it would seek to raise $301 million in new capital by way of the sale of new shares to both institutional and retail investors.
The ECEC Relief Package weekly payments started to flow to services with the first payments being received on 9 April.
641 new cases were reported across Australia in the week bringing the national cumulative total to 6,317.
Week 7 – 13th April to 19th April
Detailed rules for the application of the JobKeeper package were released providing for the first time the precise eligibility requirements for both providers and their employees.
G8 Education completed the first stage of its capital raise with the raising of $227 million and Evolve Education confirmed it will not proceed with the purchase of 5 centres in the ACT due to COVID-19.
Wage subsidies to support apprentices and trainees were announced by the Federal Government and the ABC launched an expanded schedule for free education content to support students, educators and parents at home.
287 new cases were reported across Australia in the week bringing the national cumulative total to 6,604.
Week 8 – 20th April to 26th April
JobKeeper payment enrolment opened.
The ATO confirmed that ECEC Relief Package payments received by services would not be classified as chargeable for GST purposes creating a reprieve for many ECEC services that were uncertain around eligibility for JobKeeper in light of the decline in revenue tests.
Although guidance has not yet been released by the ATO it is understood that the new ruling will mean that services reporting revenue as part of their JobKeeper decline in revenue tests would not need to include the payments and therefore record zero revenue for April meaning they would become automatically eligible for the payment.
ECEC focussed business and real estate brokers signal first signs of sentiment shifts after an extended period of virtually no activity.
The first approvals for applications for Grants under the Community Child Care Special Circumstances Fund are received by applicants of grants under $10,000.
97 new cases were reported across Australia in the week bringing the national cumulative total to 6,701.
Week 9 – 29 April and beyond
As we look ahead there still remain a number of uncertainties for the sector to manage, in particular how the rising tide of demand from parents responding to free child care starts to impact viability, and how responsive support package delivery is in reply. What rulings the ATO will determine for their GST Revenue decisions and the consequences for JobKeeper eligibility are also in play.
That being said, the crisis in ECEC has been averted for now with a range of unprecedented actions at both federal and state level, precipitated by tireless advocacy and a single minded determination to survive at the thousand centres and operators across the country.
Editor’s note: COVID-19 case numbers have been taken from the ABS COVID-19 statistics database found here.
The Sector maintains a commitment to bringing coverage of all ECEC related developments to the forefront of the education and care community. To remain up to date with weekly highlights, please subscribe to the newsletter, here.
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