Childcare centres face being made insolvent if the federal government does not issue subsidies to the sector, according to one Canberra provider.
YWCA Canberra chief executive Frances Crimmins said the organisation's early learning childcare centres across Canberra had experienced a 70 per cent decline in attendance.
School-aged care has fallen even further, at 95 per cent.
"The challenge for us is the current position of the federal government is that childcare subsidy will only be paid to an early learning centre when a child, employee, educator or parent contracts COVID-19," Ms Crimmins said.
"That is an appalling position - we need to have access to the same level of childcare support now."
Ms Crimmins said if the subsidies were not extended centres would be closed within weeks, and when life returned to normal it would be very hard for centres to reopen.
"Without the income of the childcare subsidy most of the early learning sector will be closed within a few weeks - what I mean by closed is they will be insolvent," she said.
It comes as federal Education Minister Dan Tehan increased the number of absent days from 42 to 62. On absent days, childcares receive a subsidy from the government to cover costs.
But Ms Crimmins said many parents had chosen not to use the policy and instead withdraw their children.
"The notion that a parent can continue to pay the early learning fees, their portion through absenteeism for months is actually not a good policy position to take because it doesn't see the income flowing through to us," she said.
Mr Tehan said he would have "more to say" on the issue.
"One of the key ways all governments can support the sector is through regulatory relief and this is on the agenda for Education Council [on Friday]," he said.
"We continue to assess the issues facing the sector and we will continue to work with them to manage the impact of the coronavirus."
YWCA Canberra would have to stand down childcare staff on Friday, Ms Crimmins said.
"If we were able to retain 50 per cent of our funding during this time we could be providing professional development for our staff," she said.
"People in their traineeships could continue to do their learning and we could provide them with some paid employment during this time - they can do that from home so we can still reduce the number of people coming into work."
Member for Canberra Alicia Payne said she and other federal Labor colleagues had written to Mr Tehan on the issue but were yet to receive a response.
Ms Crimmins also called for childcare workers to have greater access to testing.
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