There’s a headline from satirical newspaper The Betoota Advocate that’s been doing the rounds: “Family Glad Youngest Kid Finally Out Of Daycare And Into Elite Private School So They Can Start Saving.”
It says a lot about the state of childcare in Australia.
If you’ve spent any time around young families, you already know this conversation. In capital cities, a single day can cost upwards of $190. Even with subsidies, families are spending the equivalent of rent or a second mortgage repayment just to go to work. In regional, rural and remote Australia, the problem isn’t just cost, it’s access. For many families, it’s near impossible to find a place at all.
Broke if you do, broke if you don’t is the unfortunate catchphrase for many households with children under five. Until recently, however, that didn’t apply to everyone in the sector.
While families were haemorrhaging money and educators were leaving the profession they loved because they couldn’t pay their rent, many large for-profit providers were doing very well.
The ACCC found large corporate providers were generating higher profit margins than their not-for-profit counterparts – funded substantially by taxpayers and exhausted families alike, to the tune of $20 billion a year between subsidies and fees. The trick, in too many instances? Keep fees high, wages low and let the public money do the rest.
Then, the market turned. A slowing birth rate, safety concerns and financial pressure mean demand in urban areas isn’t what it was and in many places, there are simply too many services chasing too few children.
When G8 announced the closure of forty childcare centres last week, the headlines focused on the corporate story: a big player retreating from a squeezed market. Behind every one of those closures is a family scrambling for care, a child losing familiar educators, educators looking for new jobs and a community losing an essential service.
How did we get here? We built an essential service around market logic instead of children’s needs.
The G8 closures are the latest, not the first and far from final, evidence of a system built to incentivise growth rather than guarantee quality and access. Between 2021 and 2024, 5,000 new places were created in for-profit services in gentrifying urban areas, while 1,000 places were simultaneously lost from not-for-profit services. The market responded – rationally, from its own perspective – by flooding areas where providers could charge the highest fees. Those same services are now overextended and financially exposed.
The cruelest part of oversupply isn’t the centres that close – it’s the ones that don’t. The services white-knuckling through financial stress, cutting staffing, asking educators to clean on their lunch breaks, running thin on ratios. That is a quality crisis.
We’ve been here before. The collapse of ABC Learning in 2008 cost taxpayers $22 million in bailout funds. The Genius Childcare chain’s unravelling – which followed G8 paying them to take on underperforming services – resulted in staff going unpaid and quality crashing before regulators caught up. We keep learning the same lesson and declining to act on it.
The ACCC, the Productivity Commission, the Economic Inclusion Advisory Committee, the Women’s Economic Equality Taskforce, have all put recommendations on the table. We’ve had Senate Inquiries. What we haven’t had is a government willing to take responsibility for the whole system, end to end. Right now, no single body oversees early childhood education and care as a unified national endeavour. That is not an oversight. It is the problem.
This is why the most important reform on the table right now is the establishment of an Early Childhood Commission: a dedicated, jointly governed national body with a genuine mandate to plan supply, drive quality and be accountable for outcomes across the system. Funding reform is critical. Right now, public funding follows children through a subsidy model that has handed enormous power and profit to large commercial operators. A system built for children looks different: funding tied to quality, cost transparency and genuine accountability for outcomes
The Government has already taken meaningful steps towards building an early childhood education and care system. A 15 per cent wage increase for educators. Three days of subsidised care guaranteed. The abolition of the punitive Activity Test that was hammering single mothers and First Nations families. A suite of measures to improve safety and standards. These were hard-won and important. They are not enough.
G8’s forty closures are a market correction. What we need is a policy correction. These are not the same thing and only one of them is designed to put children first.