The Early Childhood Council is calling on the Government for more support as attendance at centres plummets.
In the middle week of August, only 56 percent of children attended their early childhood education centre (ECE), compared to 96 percent in the same period before the last election.
"The latest statistics from the Ministry of Education show there's about a 40 percent drop in attendances mainly due to the growth in unemployment and also apprehensive parents nervous about returning their children, particularly in Auckland under alert level 3 as it has been," CEO Peter Reynolds says.
Reynolds told Newshub ECE centres are struggling "on a number of fronts".
"One of them is the inadequate funding to support them to stay open when so many children are not attending...
"I will certainly applaud the minister for his efforts to encourage parents to get their children back into childcare centres, but we do feel that more needs to be done."
Reynolds wants the Government to bring relief to the centres.
"So we don't want to see a growth of issues getting in the way, these barriers, we need to start thinking pragmatically about how we reduce these barriers and make it easier for services to remain open, easy for parents to get their children back into childcare because it is a safe place to be and easier to get back to some degree of normality."
Reynolds says the wage subsidy has not helped many of them, as some centres had to repay their entire subsidy after receiving an insurance payout for some of the revenue lost in lockdown.
The Early Childhood Council is questioning why the Government has wage subsidy money leftover when its members are struggling.
Ministry of Education sector enablement and support deputy secretary Katrina Casey said they were aware COVID-19 had impacted the viability of some learning services.
"To date the Government has cushioned some of the financial impacts by providing certainty of ECE [Early Childhood Education] subsidy funding over the past two funding periods.
"We are working on how we can provide some assistance to services who have been hardest hit and who may no longer be viable. We will be providing information to the early learning sector about the nature of this assistance and the criteria for accessing it in the next fortnight."