‘Disastrous’: new lockdown means some Melbourne childcare centres could shut in weeks | Coronavirus


Some Melbourne childcare centres say they may have to close within weeks without more government support, thanks to a combination of the Covid-19 lockdown and changes to federal subsidies.

Mandy Kelly, who runs the Melbourne University Family Club Co-operative, says she could lose about $12,000 a fortnight as families unenrol or choose not to send their children during the lockdown.

“It looks like we will be dipping into any reserve we have got left,” she says.

“It looks like six weeks is the maximum we could go for and following that will have to think about closing. It makes me feel terrible. We have been here for 55 years.”

‘Week-by-week decision’

The sector is extremely diverse, with a complex funding system. A series of federal government policy choices throughout the pandemic have added an extra layer of difficulty, as it has tried to keep centres open and viable amid evolving work patterns enforced by constantly changing Covid-19 restrictions.

Before the pandemic, the cost of childcare was split between fees paid by families and a federal subsidy for those eligible. When the first wave of lockdowns began, the government withdrew fees for parents and paid each childcare service a weekly amount equal to 50% of its total earnings before the pandemic. Providers could also access jobkeeper for their staff, which helped mitigate the reduction in income.

This program ended on 12 July, with parental fees and government subsidies resuming. In most states childcare attendance is returning to something like normal, but Melbourne has been hit with another wave of lockdowns, causing many parents to again withdraw their children.

Kelly says 15% of her families have unenrolled, and about 40% don’t wish to send their children during lockdowns.

“Financially it’s disastrous for us … the whole childcare sector was like ‘Why are we not getting the same support that the rest of the country is getting for their businesses?’,” Kelly says.

The federal Department of Education says it has been in regular communication with the sector, including holding fortnightly stakeholder meetings and consultations.

“The minister has announced support arrangements for families and childcare services during the resumption of the Child Care Subsidy [co-fee paying childcare], and additional support for families and services impacted by the stage three restrictions in Victoria,” it said in a statement.

But some providers say the structure of that support has left them in a difficult position.

In locked-down areas the government moved to give Melbourne providers a choice of whether to charge gap fees for children who do not attend during the lockdown. This is the proportion of costs not covered by the federal childcare subsidy.

The sector had argued for the right to waive the fee, to prevent parents simply unenrolling their children to avoid spending hundreds of dollars a week on services they were not using.

But centres that have lost large numbers of children face an unenviable choice: either waive fees and lose thousands of dollar a week, or charge parents and risk them unenrolling, thereby losing the gap fee along with any subsidy funding the government would have provided.

Daniela Kavoukas, the manager of the Flemington Childcare Co-operative, says: “It’s just that double-edged sword, do you risk it or do you let the fees go and lose the 40% [subsidy]? I think it’ll be a week-by-week decision.”

Several providers told Guardian Australia they had been holding off making the decision to waive fees, hoping the government would announce a support package. But so far it hasn’t come.

The other piece of federal government support was the “transitional payment”, which equates to about 25% of a centre’s weekly income, using February as a reference period. However, as a condition of receiving this funding, operators had to sign an agreement stating they would maintain staff numbers.

This means providers cannot lay off staff to cut costs. Nor do they now receive jobkeeper to pay staff, the first industry to lose access ahead of the September cut-off date.

The education minister, Dan Tehan, conceded providers might receive “a tiny bit less” in the new system. For Kavoukas it’s much more.

“For jobkeeper I was getting $51,000 a month, and for the transition payments I’ll get $16,000 a month,” she says.

‘No one got a phone call’

Some childcare operators have also reported receiving little to no support from the Victorian health department.

When a staff member at the Flemington Childcare Co-operative tested positive to Covid-19 on 6 July, Kavoukas says it fell to her to decided to close the centre. She also had to tell all families and staff to isolate as they were close contacts, since the department did not return her call for two days.

“I had to start problem-solving on my own as to whether we would be operating Tuesday morning. In my heart, the answer was no because I knew that that staff member had come in contact with those children,” she says.

On 8 July she says she received a call from a department official who said she was correct to close and ask families to isolate. She was told information on deep cleaning and contact tracing would be emailed to her.

This email took another three days to arrive, by which time she had reached out to others in the industry to learn what to do, booked a department-approved deep cleaning company and compiled and submitted her own contact tracing list.

“If I wasn’t the person notifying people … then my families would still be out in the community now, because no one got a phone call or a text message.

“It’s been a nightmare … even if they were busy [when I first called] they could just say, yes, start contact tracing, yes, you have to close’.”

Kavoukas says she has not heard of any families testing positive so far.

The Victorian Department of Health and Human Services did not respond to a request for comment.

‘The sector really needs support again’

However, the private sector says the new system will work well for many.

“Many providers are comfortable and confident to return back to the childcare subsidy system at this point,” says Paul Mondo, president of the Australian Childcare Alliance, the association representing private childcare providers.

“Through the period from April to June with the [free childcare system] and jobkeeper, the sector was actually at a significantly lower income than previously … Of course in Victoria, we have our own challenges here, but it doesn’t mean the current funding methods aren’t working.”

While the loss of jobkeeper has been extremely difficult for some, Mondo says replacing it with the traditional funding is more equitable.

“Forty per cent of all the childcare workers weren’t able to access jobkeeper. Many providers weren’t eligible, like local government area groups and some church groups … we have 200,000 workers and 80,000 of them didn’t have jobkeeper,” he says.

Some larger childcare operations have centres outside the Melbourne lockdown areas or interstate, which provide a buffer. But for small operators, two weeks of lockdowns and the cost of deep cleaning if there is a positive test associated with the centre can have a devastating effect.

The chief executive the Community Child Care Association, Julie Price, is now lobbying the government for “sustainability payments” for any service in a lockdown area or that is ordered to close for infection control.

“The sector really needs support again … these payments would make sure that they are financially viable and not losing a huge amount of money through that time,” she says.

Kelly, from the Melbourne University Family Co-Operative says it is hard not to feel alone.

“It’s just another example of the complete lack of respect for early childhood educators. It just shows this whole belief that ‘Oh, you have a commitment and a passion to children so you will do it under any conditions’… and they can use and abuse that” she says.

“They know that the people that work in these jobs are doing it because they care.”

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