Gold Coast childcare giant G8 Education welcomes revised Government support package

Gold Coast-based child care giant G8 Education says it expects to be in ‘no worse a position’ under the revised Federal Government support package.

GOLD Coast-based child care giant G8 Education says it expects to be in ‘no worse a position’ under the revised Federal Government support package.

The Government yesterday announced that payments under its relief package for the sector would cease from July 12 and that pre-pandemic arrangements, such as the child care subsidy, would resume from that date. Parents, who have been receiving ‘free childcare’, will need to start making co-payments from that date.

The Government has also announced that JobKeeper payments for employees in the early education sector would also stop from July 20.

G8 Education, which owns 475 centres across Australia under brands including Jellybeans and Pelicans, like other providers has been receiving JobKeeper payments for staff as well as payments funding 50 per cent of fees prior to COVID19 under the relief package.

G8 Education managing director Gary Carroll. Photo: Scott Powick

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Under the Government’s revised support package, G8 centres will be receiving a “transition payment” equal to 25 per cent of each centre’s fee levels prior to the coronavirus pandemic.

This is half the amount received under the previous package.

In a trading update to the ASX this morning the company said this would leave it financially in “no worse a position relative to the prior support measures even at more subdued occupancy levels”.

Occupancy is currently at about 65 per cent for its centres, however physical attendance is just 52 per cent.

G8 said some parents are choosing to keep their children at home despite having booked them at a G8 centre.

G8 Education said a number of parents are keeping their children at home despite having them booked in at centres. Photo: iStock

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Attendance spiked from a low of 30 per cent in April to 50 per cent by May.

G8 said it expects the gap between occupancy and attendance to narrow as students returned to school and parents returned to the office.

The company expects to receive revenue from transitional payments, child care subsidy payments, and parent co-payments from July 13.

It said cost savings are in line with what was announced to the market on April 9.

G8 managing director Gary Carroll welcomed the transitional funding arrangements.

“The transitional arrangements announced today are welcome as they provide operators with increased flexibility to support families as the economy recovers,” he said.

“We look forward to continuing to engage with government and other stakeholders to ensure the right settings are in place to support our families and team members.”

Transitional payments run through to September 27.

G8 is due to hold its AGM on June 17.