With an increase in fees by $7.24 an hour, or $60 a day, the families have had no choice but to reduce their hours of child care or drop out all together.

Families will be hit with a further increase of $2 per day per child after the centre finalised its budget.

The centre's manager Julie McLean said it could not afford to lose families.

"In an effort to minimise the increase in our fees due to child-care wage increases and the general cost of providing care, such as food utilities, we have had to implement cost-cutting measures that won't directly impact the children," she said.

These include: cutting back on the number of staff and in-service training; trimming spending in the equipment budget; using cheaper disposable nappies and wipes; and employing fewer relief workers.

"(There's) lots of little savings that most work places wouldn't have to think about but we have been forced to get petty about because we are a committee keeping our services affordable," Ms McLean said.

Ballarat MHR Catherine King said that despite the fanfare in the budget, the government had done little to address the shortage of childcare places or the rising costs of child care.

"Far from making childcare more affordable, the Howard Government has done the complete opposite," she said.

"Families are struggling to afford childcare and the Howard Government is not lifting a finger to help them."

Ms King said the centre was a "good model" of childcare that met the needs of families in the area.

"This centre has tried really hard not to increase their fees, but they still have to fight with the government," she said.

Ms McLean said she wanted families to have access to affordable, flexible and quality care.

"The government seems happy to see small community-based services struggle and rely on the caring committed staff to cover the cost of their lack of commitment to community childcare," she said.