Bianca Hall
Dozens of childcare centres are on the brink of closure due to an ‘‘unintended consequence’’ of federal government changes designed to prop up the sector, which would lead to hundreds of staff being out of work and families left without care.
Two non-profit organisations that run 60 childcare centres as part of their diverse operations say their sites are at imminent risk of having to close because their structure puts them out of reach of the $130 billion JobKeeper package, designed to keep millions of workers afloat.
Federal Parliament yesterday passed the JobKeeper package, which will involve payments flowing to businesses and not-for-profits that suffer substantial losses in the coronavirus crisis.
For the childcare sector, payments are designed to offset revenue shortfalls caused by the government slashing Commonwealth subsidies and suspending family gap payments, as part of its effort to secure free childcare for families.
Melbourne City Mission, which employs 90 staff who care for 450 children across two sites, wrote to families on Tuesday warning its centres faced imminent closure. Chief executive Vicki Sutton said cutting the subsidy payments amounted to a 50 per cent reduction in revenue.
Uniting Vic and Tas – which operates 58 early learning services across two states and employs 550 people who care for more than 2300 children – is under strain because it does not meet the criteria for JobKeeper subsidies.
To qualify for JobKeeper, not-forprofits must suffer a 15 per cent drop in revenue. But those drops are calculated at an organisational level, rather than at a childcare centre level.
Childcare accounts for a fraction of Uniting Vic and Tas’ operations. The organisation says that to qualify for government assistance it would have to show it had suffered a 15 per cent hit to its entire revenue base.
‘‘Early learning only makes up 14 per cent of the turnover of Uniting Vic Tas,’’ chief executive Bronwyn Pike said. ‘‘We’re being disadvantaged because we’re a multi-service provider. Even if we lose 100 per cent of our early learning revenue, we still won’t qualify.’’
Ms Pike said that without access to JobKeeper, the organisation would have no option but to close some centres. It could not afford to divert money from other charitable endeavours to prop up childcare centres, she said.
Paediatrician Ruth Lim, who works at a Melbourne hospital and is undergoing extra training in preparation for the worst of the COVID-19 pandemic, said she was deeply concerned about the possible closure of Hartnett House in Brunswick, run by Melbourne City Mission. ‘‘I’m expecting that my workload is going to increase in coming months, particularly coming into winter ... it’s going to be a horrible winter,’’ she said.
‘‘I have absolutely no capacity to do any work from home or have any flexibility. At this stage we’re not able to enrol our toddler into any other childcare.’’
Melbourne City Mission’s centres in Brunswick and Doreen account for less than 10 per cent of the group’s overall operation, which includes palliative care and homelessness services.
Ms Sutton said the mission was suffering from ‘‘unintended consequences’’ of the help package.
‘‘The intention of JobKeeper is you can continue to keep people in work,’’ she said. ‘‘But all of our employees and families are in an uncertain position.’’
Ms Pike said her organisation and others had lobbied the government for changes, to no avail. ‘‘It doesn’t make sense to use a blunt instrument when the whole purpose of what you’re trying to do is to keep childcare centres open,’’ she said.
Ms Sutton said Melbourne City Mission was bleeding $250,000 a month from its childcare centres, and could not afford to prop them up from other charitable services.
Allie Levine, whose four-year-old son, Patrick, attends Hartnett House while she maintains her legal practice from home, said it would be ‘‘absolutely horrible’’ for her family if the centre closed, and she predicted the effect would be dire for more vulnerable families.
More than 30 per cent of children attending Melbourne City Mission’s centres have a parent who is a healthcare worker.
An Education Department spokeswoman said the government had listened to concerns of the peak industry bodies for the childcare sector and received detailed information about the sector’s operations. She said childcare centres that did not qualify for JobKeeper might be eligible for small-business grants or supplementary payment assistance.
She did not address specific questions about Uniting Vic and Tas or Melbourne City Mission.