Education Minister Dan Tehan said any services concerned by the change should contact the Department of Education. “Exceptional circumstances funding is available,” he said.
Samantha Page, chief executive of advocacy group Early Childhood Australia, said it appeared the vast majority of services would be okay.
“I hope that for any centres whose finances are jeopardised to the point of possible closure, there will be a workaround or bailout or top-up to keep them going,” she said.
She also predicted the full impact of the economic downturn may not have been felt yet at centres that had been doing better and enrolments may have gone down further as unemployment deepened.
The new funding complements the previously announced economy-wide JobKeeper wage subsidies worth $1500 a fortnight per employee. The government expects $1 billion in wage subsidies will flow to the childcare sector, where labour accounts for 60 per cent of costs.
To be eligible for the wage subsidies, a service’s turnover must have plunged 30 per cent. Any centres that previously did not qualify are much more likely to now because the government’s policy has slashed their revenue.
Kim Russell, owner of Pooh Bear’s House childcare centre in Melbourne, fears the changes will be “dismal” for her centre, which will lose $40,000 in fortnightly parental payments.
“I don’t want to compromise anything with the standard of care and education in my service,” she said. “I don’t want to tighten purse strings but it’s hard to see how this will play out.”
Ms Russell said the JobKeeper allowance was “nowhere near” enough to pay for the wages of qualified staff and early childhood teachers.
Nesha Atkinson, vice-president of the Australian Childcare Alliance, said a survey the body had conducted before the package was unveiled found 27 per cent of services across the country had not been sure they would open their doors on Monday.
“The package is not entirely what we asked for and it’s not going to save every single centre but combined with JobKeeper and other business assistance packages, we feel that this will keep most centres financially viable during this time,” Ms Atkinson said.
The Early Learning and Care Council of Australia said the government wanted all services to remain open and advised concerned providers to analyse all the support measures available to them.
“Our experience is that the government is eager to work with providers to ensure the viability of the early learning and care sector and protect our qualified and skilled workforce,” chief executive Elizabeth Death said.
Providers will be able to apply for additional funding assistance if they can demonstrate it is needed to remain viable. The government has also encouraged them to look at other relief measures made available for businesses in response to the pandemic.
But there are concerns hundreds of centres across the country run by local councils will not survive without the JobKeeper payment. The country’s largest provider, Goodstart, has also not secured access yet because it has a turnover of more than $1 billion and faces a higher eligibility threshold.
Local Government Association of NSW president Linda Scott said council-run centres were the largest provider in the state and faced closure without the JobKeeper support.
“We need access to the same job support packages the private sector has access to if we are going to be able to do our bit,” she said.
Prime Minister Scott Morrison said on Friday that councils would not be eligible for JobKeeper payments and any extra support for them would be provided by state and territory governments.
Mr Tehan said the government had heard the concerns of council childcare services and would provide further advice soon. Negotiations with Goodstart are also ongoing.
For-profit providers who had maintained their surpluses also face a major financial blow from the new funding system.
With Angus Thompson
Fergus Hunter is an education and communications reporter for The Sydney Morning Herald and The Age.
Anna is a breaking and general news reporter at The Age.