The Department of Defence is withdrawing funding from a Williamtown pre-school, recently relocated from the RAAF base to Raymond Terrace, despite its promise to continue support for the centre.
Child care centres on the RAAF base were closed in 2016 amid concerns of the impact of jet noise exposure on children.
Defence promised a new child care centre would be built at Medowie but has now advised families it will not be going ahead, telling them they have four months to make other arrangements.
Paterson MP Meryl Swanson says the decision will impact negatively on families who often have no other means of securing child care.
"I find the funding decision quite stunning and shocking."
The backflip will impact over 100 children and their families from both the Defence community and the wider public.
"The decision signals that the Defence are perhaps not doing all they could do in this area...They should be providing the child care that they said they would be providing.
"Given the extraordinary circumstances we find ourselves in with the Williamtown contamination from the RAAF base, it is highly disappointing that the Department of Defence has moved away from this support."
Ms Swanson also says the funding backflip has damaged the reputation of the Department in the eyes of the community.
"This is a disappointing move not just on a practical level but on the broader message this move sends to the community...We have a lot of people in our community who are in a lot of pain because of defence and it's a real shame that they have taken this measure."
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