More casual childcare centres to close after government denies lifeline, community body warns

A peak community body has warned added pressure will be put on the state’s childcare sector if the government doesn’t supply more funding to occasional care services.

More occasional childcare centres will close if the government doesn’t provide additional funding, Neighbourhood Houses Victoria has warned.

The state government’s decision to dismiss an occasional childcare provider’s plea for a $5 million lifeline could see dozens of families scrambling to find alternative care arrangements for their kids, a peak community body has warned.

Neighbourhood Houses Victoria says more occasional childcare centres will shut their doors if they don’t receive additional funding and support from governments, after their request for the 2024-25 state budget to include a one-off rescue package was denied.

In a submission, the organisation urged the Allan government to put $5 million aside to stop “the decline in occasional childcare services” particularly in disadvantaged areas where alternative childcare is costly and there are longer waitlists.

But instead the state government’s budget – which was announced on May 7 – focused on school-aged children and their families, while the federal budget that followed a week later didn’t take occasional childcare into account, leaving the sector “stuck in no-man’s land”.

Neighbourhood Houses Victoria urged the state government to put $5m aside to stop the decline in occasional childcare services.

The call for help follows the closure of 76 occasional childcare centres in Victoria since 2011, with an average of six services shutting their doors per year.

In 2022, six centres in Golden Plains, Hume, Melbourne, Merri-bek and Yarriambiack councils closed while last year, another six venues shut in Brimbank, Casey, Hobsons Bay and Wellington Shire local government areas.

There are concerns more closures will come, with Neighbourhood Houses Victoria chief executive Keir Paterson warning 45 per cent of neighbourhood houses weren’t breaking even.

“We asked for a $5 million rescue package to stop the decline in occasional care in the state budget, but this was rejected despite the fact the Productivity Commission recently recommended funding be provided to keep these services going,” he said.

“The state and federal governments need to realise bigger isn’t always better. Don’t destroy what’s special about the occasional care community by taking a ‘one size fits all’ approach.”

Mr Paterson said 11 occasional childcare centres in regional Victorian towns – where no other childcare services were available for tens of kilometres – were also struggling.

“History shows once they close, these services are lost to the community forever – none of the centres that have closed have later reopened,” he said.

More closures could see dozens of families scrambling to find alternative care arrangements for their children.

Chris Lombardo, who has worked in occasional care for 23 years, said funding cuts have left vulnerable Victorians, including those who have fled family violence, without affordable care arrangements for their children.

“We had an arrangement with a women’s refuge for several years where women, who had to go to court or to Centrelink because they left a violent situation at home, would leave their children in our care so they didn’t have to relive things again,” she said.

“We also provided low cost or free childcare to women who were doing adult education classes with us, but we can’t do either of these programs anymore because we have such tight student to teacher ratios and are not eligible for any of the grants that come out from a national level.”

Ms Lombardo said her occasional childcare service in Thornbury might shut at the end of the year if it continues to run at a deficit, which could impact over 40 families.

“Last quarter we were in a deficit. If we a rein in a deficit again at the half year I’ll have to talk with the board because if we can’t get it back into the black, we can’t keep going,” she said.

Increased staff wages, higher safety standards and free three-year-old kinder have driven up costs for occasional care providers.

The early childhood education and care system in Australia is a shared responsibility between the federal and state governments – which have not had a dedicated occasional care funding program since 2018.

A Victoria Department of Education spokesman said funding for childcare, including occasional care, was a Commonwealth responsibility.

“The Victorian Government will continue to advocate to the Commonwealth for improvements to childcare policy and funding arrangements that support access, affordability and quality,” he said.

“This includes relaxation of the Activity Test and better funding for services in rural areas and other locations with thin markets.”

The Federal Government could not comment on the matter as it doesn’t fund occasional care.