A flaw in the Federal Government’s $1.6 billion package to provide free childcare services during the coronavirus pandemic could force the closure of council-run childcare services, forcing tens of thousands of families to scramble for new care arrangements, the United Services Union warns.

While for-profit centres are eligible for the $1,500 per fortnight JobKeeper payment for each staff member, in addition to the new childcare funding, local government is not eligible for that money, leaving a massive budget hole.

Without access to the JobKeeper payment, the funding package fails to cover the costs of keeping childcare centres open, forcing councils to either pump millions of dollars from ratepayers into the services or close their doors.

The USU, which represents local government employees in NSW, is urging the Federal Government to immediately address the design flaw by ensuring council’s can access the funding needed to keep childcare centres operating during the COVID-19 crisis.

“There is no point announcing a $1.6 billion childcare package that promises essential workers that childcare services will be free if a major flaw in the funding model means centres in communities across the country will still be forced to close their doors,” USU General Secretary Graeme Kelly OAM said.

“The way this funding model works is by combining with the JobKeeper subsidy, which is being paid to commercial childcare operators, to cover the full costs of keeping centres open.

“But if the Federal Government fails to provide that $1,500 a fortnight payment to cover staff wages at council-run centres, there simply won’t be enough money to keep the services open, forcing parents to scramble to move their children elsewhere.

“Local Government is the largest provider of early childhood education and childcare services in NSW, caring for tens of thousands of children, yet all these services remain at imminent threat of closure.”

Mr Kelly said that if the Federal Government failed to act then the NSW Government should intervene to provide the funding needed.

“The local government sector has been left out of much of the Federal Government’s stimulus funding, putting the viability of many community services at risk and threatening thousands of jobs,” he said.

“If the Federal Government continues to exclude the sector from key stimulus measures, in particular the $130 billion JobKeeper program, the NSW Government must act to ensure its ongoing viability.”

Further information: Tim Vollmer 0404 273 313