According to a recent inquiry in New South Wales, there is a troubling connection between property developers and safety and quality issues in childcare facilities. The investigation revealed that less profitable centres, particularly in remote and economically disadvantaged areas, have become known as “childcare deserts.”
Early Learning Minister Prue Car stated that the state government is reviewing the inquiry’s recommendations and will provide a response in the near future.
The report, which emerged following a Four Corners investigation into abuse and neglect within the childcare sector, criticized the role of real estate developers and investors in contributing to the scarcity of services in less affluent suburbs. Abigail Boyd, chair of the committee and a member of the Greens, accused for-profit childcare providers of prioritizing expansion and profits over the quality of care.
In her remarks, Boyd emphasized that profits taken by corporate childcare companies or real estate investors detract from essential investments in safety and care quality. The report highlighted testimony from Cheyanne Carter, head of the consultancy Divergent Education, who pointed out that childcare centres are being designed to maximize profit by accommodating as many children as possible per square meter.
Carter stressed the negative implications of this approach, noting instances where 50 preschoolers were placed in a single room, demonstrating a lack of concern from developers about design, supervision, or the welfare of children and staff.
The inquiry referenced findings from the Australian Competition and Consumer Commission, which indicated that the childcare real estate market is appealing due to long-term leases and stable tenants, often supported by government backing. The committee expressed concern that this market-driven approach has resulted in a concentration of services in more affluent areas, leaving poorer and remote regions underserved.
The report also pointed out that Australia has some of the highest childcare costs globally, with families spending approximately 16 percent of their income on services, in stark contrast to just four percent in Sweden and three percent in South Korea.
In a related context, childcare provider G8 recently announced the closure of 40 centres nationwide due to allegations of child abuse at some of its facilities in Victoria, reporting a challenging outlook for the sector in 2025.
The inquiry concluded that equity-backed services are unsuitable for the childcare sector, finding that for-profit providers generally offer less safe environments than their non-profit counterparts. Furthermore, it criticized the previous regulatory authority, the NSW Early Childhood Education and Care Regulatory Authority, for its inadequate response to repeated safety violations and poor ratings. This authority has since been replaced by the more robust NSW Early Learning Commission.
In October, the state government enacted a series of reforms aimed at tightening regulations and increasing penalties within the sector. David Towson, the acting secretary of the Independent Education Union NSW/ACT, remarked that the report underscores significant safety challenges stemming from serious staffing shortages and highlighted the urgent need for increased funding to improve educators’ pay. He noted the alarming gender pay disparity in a workforce predominantly composed of women.
The report included 35 recommendations, including a proposal that requires two staff members to always maintain visual contact with each other while interacting with children. It also suggested that government funding should support the expansion of non-profit services and called for transparency regarding how much of childcare fees and subsidies are allocated to rent, recommending potential regulation of rent in the sector.
Minister Prue Car reaffirmed the necessity of the government’s ongoing reforms, stating that the report emphasizes the significance of Labor’s leading initiatives in this area. She confirmed that the government would consider the committee’s recommendations and respond at a later date, emphasizing that their reform efforts are far from complete.
