The federal government announced on Thursday that around one million families are set to receive free child care during the coronavirus pandemic but Warrnambool and Koroit business Honey Pot believes the plan will devastate their business.
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In a statement to The Standard, Honey Pot manager Rebecca Perry said the fine print of the package painted a different picture.
"The new package announced 'free child care for all'. So as of next week we are not allowed to charge a gap fee and families will have no out of pocket expenses. This is a wonderful relief for all of our families," she said.
"Our centre's original child care subsidy payments will be halved. We will be expected to run a centre on half of our total revenue.
"Due to our business taking this 50 per cent loss we should qualify for the JobKeeper allowance to help pay our employees but at this stage they are saying we will not see this money until May.
"In the meantime, we are expected to run a business on 50 per cent revenue."
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Under the plan, the government will pay 50 per cent of the sector's fee revenue up to the existing hourly rate cap based on a point in time before parents started withdrawing their children in large numbers, but only so long as services remain open and do not charge families for care. This, along with the JobKeeper payment, means services can offer free education and care.
Ms Perry said Honey Pot could cater for 40 children a day, but currently they were seeing about 10 as parents begin to take their children out of care for self-isolating.
"When we first heard the announcement we rejoiced; we thought finally we are being recognised, families will receive relief from their gap fees and centre's will receive funding to help pay this," she said.
"But no, we were wrong.
"This is not a care relief package for early childhood centres. This is a relief package for our government.
"Child care centres are disadvantaged. I have spoken to many service providers who are so upset and they have expressed they will be making a $5000 loss per week due to this new package.
"Now with this new package we cannot guarantee job security, we cannot guarantee we will be able to pay all of our bills.
"As of April 6 we will be running at a loss."
A Warrnambool single mother-of-two and nurse said child care services were her only option to remain at work.
"The benefit is a huge relief off my shoulders," she said.
"I was worried the child care would close and then I wouldn't be able to work or do my bit.
"Work has been very stressful; preparing for the thing to get bad. But we are prepared."
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