Ukraine's hospitals grapple with COVID-19 surge

A medical college in western Ukraine has been transformed into a temporary hospital as the coronavirus inundates the Eastern European country.

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Singapore banks grapple with digitization as disrupters beckon

SINGAPORE — The trio of banks that dominate Singapore’s financial sector are preparing their defenses against an influx of digital lenders, as the city-state puts itself at the forefront of the fintech revolution in Southeast Asia.

DBS Group Holdings, Oversea-Chinese Banking Corp. and United Overseas Bank are intimately connected to Singapore’s stellar growth following its independence in 1965 and their acronyms are familiar to generations of customers.

But the cozy relationship between the banks and their clients is about to change. By year’s end, the Monetary Authority of Singapore is expected to award licenses to new digital lenders who will challenge the status quo. The winners could even be announced next week, when Singapore holds its annual fintech festival.

The change will let nonfinancial institutions vie for a slice of the country’s banking market, worth almost $2 trillion. The central bank’s stated purpose in issuing the new permits: to create a “resilient, competitive and vibrant” industry.

A range of local and overseas fintech and internet giants, including China’s ByteDance — owner of video-sharing platform TikTok — and Alibaba Group Holding’s Ant Financial, have entered into partnerships to bid for five virtual banking licenses.

Singapore is one of the first countries in the Association of Southeast Asian Nations, or ASEAN to issue such permits. The Philippine central bank, Bangko Sentral ng Pilipinas, on Nov. 26 said it will also allow such banks to be set up.

Worldwide, the number of “neobanks” competing in the virtual space has grown at a compound annual rate of 27% to more than 200 since 2010, with a fifth based in the Asia-Pacific region, according to a report published in November by the Singapore FinTech Association.

The report noted incumbent local lenders together hold a 63% share of the market for loans — a commanding lead that could shrink if new digital players make inroads in the city-state by offering virtual services that promise a seamless experience.

“This experience of remote, convenient, easy-to-use and consume 24/7 services is now the expectation of consumers from banking,” said Mohan Veloo, vice president for global solutions engineering at F5, a cloud services provider. “This has led to digital transformation being a top priority for Singapore’s banks in recent years.”

Indeed, the incumbents have tried to “self-disrupt,” evolving into digitally focused lenders by pouring billions of dollars into technology. Singapore’s legacy lenders have come under increasing pressure to transform their operations as the current low interest rate environment and the COVID-19 pandemic dampen their earnings prospects.

The banks saw their net profits fall between 12% and 40% on the year for the three months ended September, weighed down by the health crisis and bad loan provisions as many companies had difficulty meeting payment obligations.

DBS, OCBC and UOB have pledged to make digitalization a core part of their business transformation efforts and are spending a lot of cash to do it. DBS, the biggest of the three and Southeast Asia’s largest lender, has spent 4.4 billion Singapore dollars ($3.3 billion) over the last four years on technology. It has been working to integrate tech into its business far longer, introducing internet banking in 1997.

In September, DBS, said it was tapping artificial intelligence and big data to beef up its virtual offerings. It hopes predictive technology will allow it to proactively offer suggestions to customers on how to more effectively manage their money or cut losses on investments.

DBS is not the only legacy lender in Asia using tech to boost its capabilities. HSBC in Hong Kong uses AI to plan the distribution of cash to ATMs, while Standard Chartered Bank has adopted biometrics to give customers access to its digital systems in markets such as Malaysia and India. In Thailand, Siam Commercial Bank, the country’s third-largest bank by assets, has worked to close branches and cut staff as it pivots to mobile banking.

“Big tech [companies have] the advantage of predicting how customers will act online from the massive amounts of data available,” Victor Orlovski, Managing Partner at venture capital firm Fort Ross Ventures, told Nikkei Asia. To transform effectively, incumbent players need to bring on specialists with technological know-how to build the digital products and experiences consumers have come to expect in the virtual era, Orlovski said.

DBS has approached this challenge by collaborating with cloud computing provider Amazon Web Services to help sharpen its staff’s skills in AI and machine learning. More than 3,000 DBS employees, including senior executives, will be trained in the new technologies by the end of the year.

“Everything has to be hyper-personalized,” said Sim S Lim, group head of consumer banking and wealth management at DBS. “There are a lot of things that we know about you — to help you think through, and help you … plan for retirement — to help you do many, many things. And this is where this is going to differentiate what a great bank is, versus what a good bank is.”

But the road to digitization has not always been smooth. DBS has pursued a digital banking focus in India, as well with a mobile app, and is set to grow there by taking over ailing lender Lakshmi Vilas Bank under a plan proposed by the Reserve Bank of India, the central bank.

Jefferies analyst Prakhar Sharma noted in a report that as a result, DBS will be the largest foreign bank in the country in terms of the number of branches, which showed that “DBS Bank India’s digital banking strategy may not have yielded sufficient success, hence the need to acquire branches.”

In Singapore at least, the lender’s digital efforts have gained considerable traction during the pandemic. DBS reported a surge in virtual banking engagements between January and May — transactions on its retail digital platform surged 220% on the year, with transactions on its wealth management system jumping 198%.

Local rival OCBC has seen similar growth. The lender said eight in 10 of its digitally active customers bank on their mobile phones, and more than 90% of its financial transactions by volume in Singapore are performed virtually, with such transactions rising 20% on the year.

OCBC offers virtual wealth advisory services to allow customers to do their financial planning remotely without having to come to a bank branch. 

The bank told Nikkei that not including labor costs, it commits about 12% of its total expenses to technology. Based on the lender’s financial reports, that potentially came to more than SG$200 million in the six months to September.

Still, the bank maintains some traditional practices. And it has had virtual assistants, such as an AI-powered “chatbot” to tend to customers for a while. “We believe that the human touch, digitally aided, is critical for certain financial interactions, and we are progressively enabling our financial consultants to advise people remotely over phone and over video,” said Pranav Seth, head of digital and innovation at OCBC.

In 2018, the third of the three big Singapore banks, UOB, announced that it invested in and partnered Israel-based fintech Personetics to boost AI-based solutions offered to its customers.

“Given the advances in AI, machine learning and data analytics, we will use Personetics’ tools to deepen our understanding of customer behavior, and to design more innovative, responsive and responsible digital banking services,” said Dennis Khoo, head of regional digital bank and strategic initiatives at UOB at the time the initiative was revealed.

The lender told Nikkei that from 2014 to 2019, it invested SG$2 billion “to ensure the quality and robustness” of its digital infrastructure. In July, it launched a “robo-adviser” that helps customers structure investment portfolios based on their risk profile and financial goals.

In Thailand last year, UOB launched TMRW, a digital bank, which was followed by another launch this year in Indonesia in August. Within the two ASEAN markets, TMRW taps AI and data analytics to help consumers meet personal savings targets.

S&P Global Ratings’ Credit Analyst Ivan Tan noted in a report this year that while new virtual banks may have less room to dislodge incumbents, the legacy lenders also have to contend with maintaining physical infrastructure, such as branches, which the new digital players do not have to deal with.

“The big Singapore banks that began their digital journey several years ago have yet to demonstrate significant cost savings or [an] income boost,” Tan said in the report. “For now, the profitability and efficiency ratios of the Singapore banks we rate have remained flat, and they have largely retained [their] existing traditional infrastructure.”

The incumbents’ digitization has also seen them take on characteristics of the fintech upstarts. For instance, DBS, OCBC and UOB have services such as digital wallets that are akin to what nonbank players like super app developer Grab, telecom company Singtel and Chinese smartphone maker Huawei have created.

For the legacy lenders, the e-payments landscape in the region has become increasingly crowded, with tech outfits vying for attention alongside traditional banks.

In a report issued in November, Moody’s Investors Service said the outlook for traditional lenders in the Asia-Pacific was favorable, compared with that for new digital players. The COVID pandemic is helping legacy banks accelerate their transformation efforts.

Tae Jong Ok, assistant vice president at Moody’s, noted that in the region, incumbents planned to maintain or raise investment budgets for digitization, even in the face of weakening profitability, with digital platforms likely to become increasingly integrated into mainstream banking.

“In this evolving competitive landscape, we expect large banks with sizable investment budgets stand to gain, while neobanks with still-untested franchises and smaller traditional banks with limited resources face a more testing environment.”

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Medicaid cuts on the table as states grapple with impact of pandemic on program enrollment

Administrator of the Centers for Medicare and Medicaid Services Seema Verma and Vice President Mike Pence look on as President Donald Trump speaks at a coronavirus briefing in April.

jim watson/Agence France-Presse/Getty Images

State leaders are weighing possible cuts to Medicaid services and health-care benefits to offset rising costs due to a surge of enrollees who have lost jobs and need health coverage as the coronavirus pandemic has intensified.

Congress boosted federal matching funds to states for Medicaid as part of its first coronavirus relief package, but many states are still struggling to afford the increasing pace of sign-ups in the program for low income and disabled people. Enrollment for the fiscal year ending Sept. 30, 2021, is expected to jump 8.2%, with state spending accelerating by 8.4%, compared with 6.3% growth in the previous fiscal year, based on data from 42 state Medicaid directors compiled by the Kaiser Family Foundation.

Medicaid has grown to become one of the largest portions of state budgets, from about 21% in fiscal 2008 to about 30% in fiscal 2018, according to the National Association of State Budget Officers.

State leaders working on budgets that must be finalized in July are confronting budget crises. Tax revenues have tumbled since March because of restrictions on businesses, social distancing and high unemployment related to the pandemic, economists have found. Most states have constitutional or statutory requirements that they maintain balanced budgets.

Some state leaders may try to narrow the gap between the revenues they need to balance the budget and the shortfalls they face by cutting vision and dental benefits, or payments to doctors and other providers. Cuts to other programs, such as education, could also be in the mix.

An expanded version of this report appears at

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COVID-19 has pushed rural hospitals to the limit

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‘My sense is that we lost’: Trump campaign aides grapple with dwindling odds

“Barring any major cases of voter fraud or something drastic, this is over, and it’s been over for a day. Most people are aware. Some folks are taking a bit longer to accept it,” said a senior Trump campaign official. “There are a lot of people just sitting and staring at their desks.”

“My sense is that we lost,” added a former Trump aide, who on election night and the days after thought the president would win. The former aide said he shared Trump’s belief that pandemic-driven voting rule changes had negatively impacted his bid for reelection, but said the president no longer has a viable path to victory.

“It’s an uphill battle,” this person said.

Trump’s dwindling circle of believers comes at a critical moment for the president’s legacy, which his allies fear could be permanently tarnished if he presses too long with a court battle that plunges the nation into political crisis and fails to yield his desired result. Only a small number of those in the president’s inner circle — namely former New York City Mayor Rudy Giuliani and advisers Corey Lewandowski and David Bossie — have adamantly encouraged Trump not to concede.

The bleak atmosphere that has taken hold inside Trump’s campaign operation reached a new level Thursday night, after the president convened a last-minute news conference from the White House briefing room to falsely insist he won the 2020 election and further amplify unsubstantiated claims of widespread voter fraud. His appearance was followed by Democratic challenger Joe Biden taking the lead in Pennsylvania and Georgia early Friday morning, putting him on a path to the presidency, as well as calls from top allies to furnish proof of legitimate voter fraud.

“If you’re going to say those things from behind the podium at the White House, it’s his right to do it, it’s his right to pursue legal action. But show us the evidence,” former New Jersey Gov. Chris Christie said Friday on ABC News. “This kind of thing, all it does is inflame without informing and we cannot permit inflammation without information.”

Christie also accused the Trump campaign of lacking a clear legal strategy or leadership as top surrogates and Republican attorneys laid out their cases in haphazard TV appearances and disorganized press conferences.

“One of the things you’re seeing here is the absence of Don McGahn,” Christie said, referring to the former White House and campaign counsel. “This race was just as close in 2016 and you never saw any mayhem because there was a legal strategy laid out.”

On Friday afternoon, Trump campaign manager Bill Stepien and senior White House adviser Jared Kushner installed Bossie, a former Trump aide and veteran GOP operative, to spearhead the president’s legal quest to review vote counts in a handful of key battleground states where he lost by thin margins or appears poised to lose. But as Bossie and other Trump aides fanned out across Nevada, Georgia, Pennsylvania and Arizona this week to unveil their legal challenges, some of the president’s closest allies privately described a protracted legal battle as an exercise in futility.

“Obviously with Georgia and Pennsylvania there is a lot of headwind against us, but at this point it’s a legal operation and we’re exhausting every available thing to us,” said one adviser to the Trump campaign.

A second adviser to the campaign suggested a court battle is unlikely “to swing things” in Trump’s favor but could form the basis of the president’s eventual concession, which Trump aides universally agree will flout tradition.

“He’s going to say, ‘They stole it from me,’ and then he’s going to go to Florida and continue to be the most influential Republican in the country,” said the second campaign adviser.

Trump’s reluctance to admit defeat, which would amount to a sign of weakness in the president’s playbook, left some of his aides concerned about the transition of power that must happen before the presidential inauguration in January and the possibility of a fruitless lame-duck session if he remains fixated on the election outcome and the fate of his campaign’s lawsuits. One of the advisers to the Trump campaign suggested that the president might refuse to meet with Biden and avoid his inauguration but was unlikely to interfere with the government transition.

“I do hope the president can abandon his focus on legal stuff long enough to engage in stimulus negotiations,” said a senior administration official. “We have an opportunity to get stuff done and it should not be drowned out by the noise Trump and his lawyers have been making.”

But the campaign’s focus on recounts and legal challenges isn’t the only distraction that could overshadow or derail a bipartisan Covid-19 relief package in a lame-duck session. With the election outcome still hanging in the balance, public frustrations and finger-pointing among Trump aides began to surface on Friday.

In a tweet, former Trump campaign manager Brad Parscale gave a backhanded compliment to Hannah Castillo, who ran the campaign’s Latino outreach program and oversaw coalition operations earlier this year. “She should get credit for an amazing job!” tweeted Parscale, who was fired in July. “Too bad she wasn’t there the last couple months.”

Shortly after, news broke that Parscale, who spoke to the president daily as chief of his campaign and has been a trusted friend of the first family, planned to join the ranks of ex-Trump aides who have cashed in with tell-all books.

Meanwhile, Donald Trump Jr. lashed out at Republicans — including rumored 2024 GOP hopefuls — who had not yet come to his father’s defense on Trump’s evidence-free claims of illegal vote counting and a rigged election. Just minutes after the younger Trump issued a scathing call for backup, former United Nations Ambassador Nikki Haley, Sen. Tom Cotton (R-Ark.) and others chimed in. In a Fox News appearance Thursday, Sen. Lindsey Graham (R-S.C.) said he would contribute $500,000 to the president’s legal defense fund to pursue challenges to vote tabulations.

There were also lingering frustrations over Fox News calling the race for Arizona on Tuesday night, as other election forecasters and media outlets held off on declaring Biden the clear winner of the traditionally red state. The president’s supporters have unleashed a torrent of criticism against the conservative news outfit since Tuesday night, when the network’s decision desk declined to reverse its early call on Arizona.

“In the court of public opinion, it looks bad and it sways a lot of the commentary,” said one adviser to the campaign. “Then you’re fighting two battles — the vote count and the court of public opinion.”

The Trump campaign has repeatedly signaled that it is preparing for a lengthy battle in the courts, even if Biden remains in the lead or crosses the 270-vote threshold, giving him the presidency. On a call with top donors — which the campaign said was its largest ever — officials said they need to raise “tens of millions” of dollars to pay for upcoming legal fees.

Anita Kumar contributed to this report.

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Trump’s doctors grapple with competing demands – from the public and an image-conscious patient, experts said

“When you’re in a complicated situation like this, you can only go so far,” said Dr. Benjamin Aaron, the chest surgeon who in 1981 removed the bullet from President Ronald Reagan, and said he and his colleagues “felt a sense of duty to level with the American people.

“It’s appropriate to be open, but there has to be a certain amount of implied trust” with his VIP patient,” he said.

The man standing at the crossroads of these competing interest now is Dr. Sean Conley, an Afghan War veteran and military physician who has addressed reporters twice over the weekend about the president’s battle with the novel coronavirus, a diagnosis he received late last week.

Conley offered conflicting statements about the president’s health status and treatment timeline, prompting a crisis of credibility emanating from the esteemed hospital’s medical staff. On Saturday, Conley said he and his staff were “extremely happy with the progress the president has made,” and described his symptoms as mild. But after the briefing concluded, White House chief of staff Mark Meadows offered a vastly more dire prognosis, calling the president’s vitals on Friday “concerning.”

Conley attempted to clean up the diverging takes on Sunday, telling reporters that Meadows’ comments had been “misconstrued,” but acknowledged he was “trying to reflect the upbeat attitude of the team and the president, over the course of the illness, has had,” in describing the president’s status.

“I didn’t want to give any information that might steer the course of illness in another direction,” Conley said, “and in doing so, it came off that we were trying to hide something, which wasn’t necessarily true.”

The president’s critics have accused the White House of deliberately misleading the American people. Senate Minority Leader Chuck Schumer, of New York, issued a call on Sunday for the full details of Trump’s health status to be released, along with the names and health status of everyone who has tested positive at recent related events.

“When you don’t have full transparency, when there’s cover-up’s, contradictory statements, even lying about something as vital to the nation’s security as the president’s health, the nation is severely endangered,” Schumer said.

White House Communications Director Alyssa Farah sought to defend Conley’s apparent reversal Sunday on Fox News, claiming that it is a “very common medical practice” to “convey confidence and you want to raise the spirits of the person you’re treating.”

The challenges Conley faces now not new – but may be heightened given Trump’s past proclivity to shroud his health assessments in secrecy. After his 2016 presidential bid, for example, a New York-based doctor who penned a glowing letter proclaiming that Trump would “be the healthiest individual ever elected to the presidency,” said the president had dictated the letter to him for publication under the doctor’s name. In 2019, the president made an unannounced visit to Walter Reed Medical Center for what Conley later described as “a routine checkup.”

But in this current medical crisis, experts not involved in the president’s treatment described to ABC News the difficult balance Conley must try to strike. Dr. Mark Siegel, a Yale University critical care physician and medical ethicist, said scrutiny of the Walter Reed physicians underscores the unique tension of transparency in treating a president.

“The physicians who are sharing information with the public have to wrestle with these competing interests,” Siegel said. “One is to protect the privacy of their patient, but I think an overriding concern is that the public has a right to know how their president is doing.”

A challenge for past presidents

Balancing the competing interests described by Siegel is hardly a new challenge for those who treat presidents of the United States. In fact, obscuring the sometimes dire medical conditions of a sitting president has significant precedent in American history.

In 1893, Grover Cleveland went so far as to undergo surgery on a yacht to avoid media attention. When William McKinley nearly died of pneumonia in 1901, his spokesperson slammed reporters’ inquiries as “foolish stories.” Perhaps most famously, aides to Franklin Delano Roosevelt long sought to hide their boss’ paralysis.

After Reagan was shot outside the Washington Hilton, Aaron said the medical team made a pointed effort to present a clear message to the public.

“We didn’t want to put out a hodgepodge,” he told ABC News in an interview on Saturday. “We wanted to report accurately on what’s going on, not create missed information, misdirection and misinterpretation.”

Aaron watched the Saturday briefing at Walter Reed and commended Conley’s professionalism. But he marveled at how the pressure of transparency has evolved in an era of social media and polarized politicization.

After Reagan was shot, Aaron said he and his medical team “let the dust settle” before divulging details of his condition. The president’s medical staff waited multiple days before offering a “full accounting of the facts” – but even then made strategic omissions.

“In a situation like this, the doctors have to be as professional, and as truthful, as they can be,” Aaron said. “Honesty is the best policy in all regards, but honesty does not necessarily mean lay it all out, lay all the blood on the table for the public to try to digest.”

As for the historical precedence, Aaron said examples of past presidents hiding ailments for political purposes further illustrates the evolution of transparency and what is expected of leaders who fall ill.

“Look at Roosevelt — there was nothing transparent about his care at all. There are an awful lot of people in this country never even knew he was paralyzed,” Aaron said. “Same thing with a number of other presidents along the way and, admittedly, a lot of this stuff was done for devious goals — and so the whole issue of what transparency amounts to, and responsibility of transparency, has been evolving over the years.”

Honesty is Conley’s ‘ethical duty’

Critics have latched onto Conley’s opaque descriptions of Trump’s vital biometrics. Dr. Seema Yasmin, a former CDC investigator and science communications professor at Stanford University, called the press briefing “a master class in all the things not to do.”

“This was a physician who was prevaricating, who was speaking half-truths, and just not being transparent and giving us clear answers to very basic questions,” Yasmin said Saturday on CNN.

David Gergen, an aide to Reagan who briefed reporters in 1981 the day the president was shot, said Sunday on CNN that “the most important lesson is to tell the public the hard truths – the unvarnished truths – and do it in a competent way.”

Under normal circumstances, doctors are limited in what they can divulge publicly about their patients under stringent rules dictated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). But with a president, there is no clear roadmap for what information Americans deserve to know in the context of patient privacy.

Regardless of how much information the president’s medical staff is willing to share, doctors “have an ethical duty to be honest and not to share information that’s misleading,” added Siegel, the Yale ethicist.

Aaron said that same sense of duty guided his team’s decisions back in 1981.

“Our purpose was just to put the facts out as they were,” Aaron said. “History sort of demanded that – that there be a true, and well-documented historical record of a major event in American history.”

ABC News’ Elizabeth Thomas contributed reporting.

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Cross-border communities grapple with tightening restrictions amid escalating coronavirus threat

Residents of South Australia’s South East may not be granted essential traveller status to attend medical specialist appointments in Western Victoria unless their condition is life-threatening or otherwise deemed necessary.

This comes as the State Government has moved to significantly tighten the state’s border restrictions with Victoria.

Mount Gambier’s medical fraternity has expressed concerns over widespread confusion as to whether patients can attend specialist appointments in Warrnambool, Hamilton and Portland.

These services include cancer-related treatment such as radiotherapy.

‘It’s going to be a difficult time’

Member for MacKillop Nick McBride warned residents from cross-border communities would not have an easy process amid concerns “people were escaping Melbourne”.

“For those who are suffering from the Victorian border controls now, it is going to get harder not easier,” Mr McBride said.

“There is great concern about the disease spread coming here from Melbourne.”

The politician conceded the issue was fuelling confusion and concern.

“It was certainly a grey area, but it is becoming more and more black and white,” Mr McBride said.

He said it was situation many people were not prepared for.

“It is very, very serious what is going on in Melbourne. There is no doubt COVID-19 is beyond the Melbourne lockdown areas,” Mr McBride said.

Mr McBride said people travelling into Western Victoria for medical appointments could be directed to self-quarantine on return for 14 days.

“It is going to be a difficult time for those who have that cross-border linkage, everything from work, education and health issues,” he said.

“There are 14,000 applications for these passes. My understanding is they will work through the most essential.”

Mr McBride said people determined to be low priority were likely to be refused a travel exemption.

“If it were for something like a dental appointment or a check-up, there would not be chance of it,” Mr McBride said.

“If it was something life-threatening, such as cancer and chemotherapy, they will have a higher level of essential travel. We have confidence in the system.”

Patients confused by border restriction process

Mount Gambier GP Mike Bruorton has raised concerns some residents may choose not to travel into Western Victoria for life-saving treatment amid tighter border controls.(ABC South East SA: Sandra Morello)

Mount Gambier general practitioner Mike Bruorton said there was widespread confusion among patients.

“I have seen a patient who has to see a specialist at Warrnambool, a haematologist, because she has cancer,” Dr Bruorton said.

“She brought in a form and was absolutely confused about what she was supposed to do next.”

Dr Bruorton said she was told to go online to access the forms and email them to police.

“Does she have to come back and self-isolate for two weeks? Apparently the advice is conflicting across the border as well,” he said.

Dr Bruorton said these appointments were essential for patients undergoing radiotherapy or who had recently had a scan for cancer.

Labor MLC Clare Scriven, who lives in the South East, said there needed to be greater clarity.

“It needs to be made clear what they can and cannot do and whether people with medical appointments can be granted exemptions,” Ms Scriven said.

She said it appeared the Government was focused on people travelling into South Australia for medical appointments, but not those travelling into Victoria.

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Parents and childcare workers back to ‘square one’ as they grapple with Government changes

Free childcare has been a godsend for Dee Behan, who balances running two businesses with bringing up a two-year-old son — but she fears yesterday’s announcement it is coming to an end will send her “back to square one”.

Her businesses were hit so hard by the coronavirus crisis, she could no longer afford child care fees, so she pulled her son Max out of care.

But the Government’s free child care scheme meant she was able to re-enrol her son and work hard to make her businesses viable again — something that would have been impossible with a toddler at home.

The Sydney entrepreneur started a co-working space for women earlier this year, before many offices were closed, and she has an established graphic design company.

“We lost two of our [design company’s] tourism clients, so that meant that income overnight went to zero,” she said. “We simply couldn’t afford to keep going as it was.”

A return to the co-payment would mean withdrawing Max from care again, she said.

“We will be financially impacted and both businesses will be impacted.

“The thought of going back to square one again when we’re on a trajectory of getting back [on track] right now … is just like going back in time again.”

Dee Behan sits next to son Max on the loungeroom floor. Max has a colourful plastic castle in front of him.
Two-year-old Max loves going to child care, mother Dee Behan said.(ABC News: Billy Cooper)

Ms Behan said Max would also suffer.

“He loves day care,” she said. “He’s got his group of friends that he gets really excited to see.”

Parents’ group alarmed by decision

According to a recent survey of 2,280 parents by advocacy group The Parenthood, an end to free child care would mean 60 per cent of households will have a parent forced to reduce work when full fees return.

A third of parents said they would need to reduce the number of days their children were in child care, or remove them altogether, if they were charged pre-pandemic fees.

Today’s announcement meant the Government either didn’t understand or was willingly ignoring the financial hardships facing Australian parents, The Parenthood’s Georgie Dent said.

“We know that the decision to return to pre-COVID fees will put an enormous amount of pressure on the sector because services will not be able to function viably if up to a third of families have to take their children out,” Ms Dent said.

“We also know that is going to be really devastating for the children themselves, because they will miss out on all the proven, long-term, quantifiable benefits that kids who access early education and care derive.”

Sam Page, from national peak body Early Childhood Australia, said what would happen when parents had to pay fees again was a “great unknown”.

“My first reaction is surprise,” she said.

“There are a number of complexities to this announcement today we did not expect.

“I am concerned about taking so many early childhood educators off the JobKeeper payment — I don’t know any other sector being taken off JobKeeper in July and I’m perplexed about the rationale for that stop.”

But for Brisbane childcare centre owner and operator Letitia Harvey, the return of the subsidy could not come soon enough.

She said her centre, Penola Casa, had not experienced a significant drop off in attendance, and had struggled to keep operating after the Government stopped requiring families to pay fees.

“The model of the JobKeeper package didn’t work in our favour, as we typically seek to provide a continuous care of a core staff working four and five days a week,” she said.

Ms Harvey said staff at the centre had to reduce the number of days they worked, in order for the JobKeeper payments to cover their wages.

“[It] was a real juggling act,” she said.

Ms Harvey said if the Government hadn’t ended the scheme, the childcare centre would not have lasted past September.

“I would have just closed because I just I couldn’t fight it any longer really,” she said.

New measure will help parents, says Minister

The Federal Government says the free child care scheme has achieved its aim of helping the sector as parents withdrew their children from care.

Now, it says, demand is returning to the system and the scheme is no longer required, but a $700 million support package will help the sector transition back to normal.

The scheme was originally due to end in late June, with the possibility of extension.

“What we now have to do is design a package which deals with increased demand, and that is what this package does.”

The Child Care Subsidy will be reintroduced, but the Government will loosen the criteria for subsidised care for families hit by the economic downturn until early October.

Mr Tehan said those families would receive up to 100 hours of subsidised care per fortnight.

Centres will be asked to cap their fees at February levels.

Labor fears many families will now be unable to afford care, which could put “a handbrake on the economy”.

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