Education Minister Dan Tehan said the government would provide extra government funding through the shift back to the old model.Credit:AAP
He said the relief package was always going to be temporary and the government had consulted widely about the shift away from fee-free childcare.
Asked about the possibility demand would drop when fees were reintroduced,Mr Tehan acknowledged there might be an impact.
"We can't guarantee that demand won't go backwards,"he said.
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"But what we can guarantee through this package is that we have done everything we can to support the sector transition,that we have consulted with the sector,listened to what they have said will be needed to make sure that demand will continue to grow and we think that we have a package that will work for families going forward."
The relief package was introduced at the start of April after enrolments plummeted,threatening the viability of thousands of childcare services. The package locked in half the centres'usual level of government funding in combination with an expected $1 billion of JobKeeper wage subsidies. Centres have not been allowed to charge fees under the arrangements.
While the measures helped save thousands of centres,many services that had successfully maintained high enrolments in March and those that were receiving limited support from JobKeeper felt the package actually hurt them and some have been operating at a loss.
While some services have pushed for a return to the old model,the government has also faced a campaign to make free childcare permanent. Advocates have argued that making care more affordable would yield significant economic benefits by boosting workforce participation.
Labor early childhood education spokeswoman Amanda Rishworth criticised the government's shift,calling it a"snap-back"that risked putting childcare out of reach for many families.
She said under the old subsidy model,Australia had one of the highest fee-charging childcare systems in the world.
"This could well act as a handbrake on the economy. If women and families are not able to access affordable childcare,how are they going to get back to work? How are they going to actually participate in the economy? How are they going to actually be able to make ends meet?"she said.
Ms Rishworth said there needed to be a plan for affordable and accessible childcare,especially in the harsh economic environment caused by the pandemic.