Charity-run childcare services fear they may have to close their doors as they “fall through the cracks” of government funding to get them through the coronavirus crisis.
The warning comes amid broader concerns about the Morrison government’s “free childcare” package, with some families reporting that they have struggled to increase their hours or have even been asked to keep their children away from their existing centres where possible.
The education department is rushing to assess 859 applications from childcare services seeking exceptional circumstances funding – including from charity groups that are missing out on the jobkeeper wages subsidy.
One of the groups seeking the special funding is Uniting NSW.ACT, which provides community services on behalf of the Uniting church.
Rod Nadwie-Smith, the group’s head of early learning, said the organisation was projecting to lose nearly $3m over the next three months without additional funding.
It employs 850 people at 56 early learning services across New South Wales and the Australian Capital Territory, serving a total of 4,500 children.
So far, the organisation has “held on” and sought to keep its centres open without standing down staff or closing services, but that was becoming increasingly difficult.
“It’s looking likely we’ll have to start moving to do something different and we won’t be able to sustain our $3m loss,” he said.
“It’s a really tough position to be in.”
Uniting NSW.ACT is not eligible for the government’s jobkeeper payments of $1,500 per fortnight per worker because, even though its childcare revenue has plummeted, it provides many other services including youth and aged care, and the group’s overall income decline doesn’t meet the test.
But that other funding is tied to the other services so the organisation “does not have the ability to move money from A to B”.
Nadwie-Smith said while the reduced funding under the childcare relief package was supposed to go hand in hand with the jobkeeper scheme, “We fall through the cracks.”
“We’re still on a knife edge on what does our future look like,” he said. “How do we support our teams and families and balance the books?”
Melbourne City Mission, which runs early learning centres in the suburbs of Brunswick and Doreen for about 350 families, has also estimated it is facing losses of $1.5m over the next six months.
The chief executive officer, Vicki Sutton, said the group was “anxiously awaiting fulfilment of the federal government’s welcome promise of additional assistance for non-government organisations which, due to their size and breadth of services, cannot meet the 15% revenue benchmark” to access jobkeeper.
“Without that, we cannot maintain our services as funding has been cut by 50%,” she said.
Under the funding overhaul announced early this month, the Department of Education, Skills and Employment is providing weekly payments to childcare services equal to half of their pre-crisis fee revenue or half of the existing hourly childcare subsidy rate cap – “whichever is lower”. They are now prohibited from charging families any fees.
Labor’s spokesperson on early childhood education, Amanda Rishworth, said it would be unfair for the government to expect charities to continue to provide high-quality care without access to either jobkeeper or exceptional circumstances grants.
“I am really fearful that we will see the doors of those centres closed and that would be bad for the families that rely on those childcare centres,” she said.
The department told Guardian Australia it would assess the 859 applications for extra support it had received so far “as quickly as possible”.
Raising broader concerns about the impact of the package, Rishworth said she had heard from families “that there is not access to more hours at the moment of childcare and in fact some families are having their hours cut back”.
“That’s a really big issue now … but going forward as the economy starts to recover it would be a tragedy if people would not take jobs or go back to work due to the lack of ability to access childcare,” she said.
The department’s spokesperson said providers receiving the relief package were expected to remain open and offer free childcare, prioritising care to the children of essential workers, vulnerable children and children whose families have an existing relationship with the service.
The spokesperson confirmed, however, that the number of children a childcare provider cared for was “a business decision for that service”. So far two services had applied to opt out of the overall relief package altogether.
The education minister, Dan Tehan, told the ABC the government had stepped in to help childcare operators and “now we’re asking for them to play their part as parents seek to re-engage with the sector”.
