Malta has suspended its free childcare scheme for new childcare centres until further notice, leaving investors aggrieved and completely in the dark.
People who invested thousands into new childcare centres were shocked to find out that they were no longer eligible for the scheme, meaning parents will have to pay to send their children there.
“I spent €350,000 on three new childcare centres and it’s all money down the drain,” an aggrieved investor, who wanted to remain anonymous, told Lovin Malta. “First the Prime Minister encourages people to invest and then they do this to us, without even giving us prior notice.”
“I’ve hired 25 child-carers but I don’t know how I can keep them employed.”
The Education Ministry hasn’t issued a statement, but when Lovin Malta called up the government’s free childcare scheme office posing as an interested investor, we were told in no uncertain terms that the scheme has been suspended until further notice.
Asked by Lovin Malta why it has suspended the free childcare scheme for new childcare centres, whether the scheme will be reintroduced and whether it can assure all childcare centres that the free childcare scheme will remain in place, a spokesperson for Education Minister Justyne Caruana responded with a brief one-liner.
“The Free Childcare Scheme was, and is, one of this Government’s main achievements, and will remain a pillar.”
Finance Minister Clyde Caruana told Lovin Malta that this suspension was due to a decline in demand for childcare since the COVID-19 pandemic hit.
“After the pandemic hit last March, the government started paying childcare centres the same rate they were receiving, regardless of how many children they had,” he said. “Demand is still low and there’s space for more children in current childcare centres, so extending the free childcare scheme to new centres will just represent an extra cost.”
This response is unlikely to satisfy investors of new childcare centres.
Warning that barely any parents will be able to afford non-subsidised childcare, estimated at around €600 a month, the investor who spoke to Lovin Malta questioned how he will be able to repay his bank loan.
“I pay around €500 on rent everyday, and I’ve invested €1000 on software, €25,000 on flooring, €35,000 on electricity and plumbing, as well as training courses for managers and childcare workers. My childcare centres are ready to open their doors and I don’t know what to do with them.”
He said he’s been banging on government doors all day and at one point was told it’s a cost-cutting exercise due to COVID-19 wage supplement.
Introduced under the administration of former Prime Minister Joseph Muscat, free childcare has been widely credited as one of the Labour government’s major economic incentives.
The scheme opened up the job market to more mothers, allowing them to go to work without the burden of childcare costs.
It’s also become more and more expensive for the public purse, with costs gradually rising from €10 million in 2015 to €26.45 million in 2019.
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