g'day antonina,

no your not doing anything wrong i often mulch up to 10 or 12"s deep.

just pull the mulch well away before planting seedlings and leave that space clear or cutr the bottoms out of 6 or 8" pots and put these around the seedlings and pull the mulch back up to the pot barrier.

len

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When plants are very small you need to clear a space of about 25-30 cm all round, then apply a very thin layer of mulch, leaving a few cm clear. This can be easier said than done as most native type mulches are quite chunky. I surround all my natives with finely cut lucerne straw. Lucerne keeps the soil moist for up to 2 weeks after watering, encourages worms and generally gets baby plants off to a good start. Good lucerne mulch can be expensive, but you've said you have a small garden so you won't need much. You can gradually bring the native mulch back over the lucerne for a more uniform look.

Thanks so much for your help guys!!!
Hei is pea-straw good instead of lucerne?
I've this at the moment and no money 4 new expenses...

Pea-straw will be fine, so long as it is finely cut.