Losses at council-run childcare centres starting to mount

Council-run childcare centres are racking up big financial losses in their struggle to stay open without access to the Commonwealth Government’s JobKeeper program.

The City of Whitehorse Council has had to shut two of its four childcare centres in Melbourne’s eastern suburbs, and is forecasting a $650,000 loss for the current quarter.

Thirty-one staff at Whitehorse childcare centres were stood down after the council’s plea for urgent financial support were rejected by the Federal and Victorian state governments.

These and other accounts of council childcare operations during the Covid-19 crisis are contained in a submission ALGA is preparing for a Senate Select Committee inquiry into the Australian Government’s response to the pandemic.

The Bassendean Town Council in Perth says it is dealing with a 50 per cent income drop from its community-based childcare operation after being prohibited from charging families an out-of-pocket fee when the Morrison government suspended federal childcare subsidies on 2 April.

The Coalition Government instead offered to pay 50 per cent of childcare centres’ usual fees based on February enrollments.

Childcare centres that opted into the new system were prohibited from charging families an out-of-pocket fee, with the expectation they would recoup the rest of their costs through the JobKeeper wage subsidy.

However, council-run childcare centres remain ineligible for the JobKeeper program.

The District Council of Karoonda East Murray says its Mallee Kids Child in South Australia is “no longer running at break-even point [and] tough decisions will need to be made in the near future for the facility to remain running”.

Several accounts in the ALGA submissions raise the injustice of LGA-managed services being denied access to JobKeeper payments that private childcare providers can apply for on behalf of their employees.

The Bassendean Council said the Early Childhood and Care Relief package “has created market distortion with support being available for private service providers and to the detriment of Local Government operating in the same market”.

The Whitehorse submission said: “Council is disappointed at the inequity of support for LGA managed services.

“With uncertainty surrounding the future of the economy, government policies and support and in turn childcare demand, council is facing tough decisions for the future of the service.”