Closing childcare centres was on the cards for Greater Hume Council before the NSW state government announced funding for council operators in the sector.
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But the flaw in the system, as outlined by Greater Hume's corporate and community services director David Smith, was that local government is not eligible to receive the JobKeeper allowance.
"We've always had to rely pretty heavily on funding from the Commonwealth to make centres viable; the numbers of children attending are just not there in small towns," Mr Smith said.
"Under the old scheme, if you didn't send your child to care, you still had to pay the gap between the childcare subsidy and the daily fee.
"In regions where there's a shortfall of childcare spots, parents are willing to pay the gap to keep their spot, but for us we have more spots than children ... our parents pulled their children out permanently.
"We were down in the tune of $30,000 a fortnight.
"And this new funding meant our revenue halved overnight; we weren't getting the childcare subsidy, the family fee, nothing.
"Without being able to get the Jobkeeper payment, we were in dire straits."
Mr Smith was preparing to discuss closures with the council and the mayor on Thursday, when the NSW government announced $82 million for 260 council childcare centres.
"I haven't seen detail of how that's going to relate to our particular circumstance, but it's some good news, we're in a better position that we were," he said.
"For a private sector, if they could have accessed the JobKeeper payment, it was probably fine, but the flaw in the whole thing was that we couldn't get that payment."
Local councils are not eligible for the federal government's new wage supplement for any operations.
"The Rural City of Wangaratta, Alpine and Murrindindi shires have all contacted me alarmed at the change," she said.
Greater Hume Children Services, which is usually cost-neutral to council, has saved childcare in Henty, Walla and Holbrook by taking over from previous operators.
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The number of children in family day care or long day care managed by GHCS is down between 60 and 80 per cent, Mr Smith estimates, though all educators have been retained.
"It's been really stressful for us as a council, dealing with the centres we run plus our family day care service, we have 60-odd educators who are effectively running their own business and they didn't know what was happening.
"I haven't seen any detail yet of how that's [the NSW funding] going to relate to our particular circumstance, but it is some good news."
