Childcare subsidy has little upside for early learning providers

The Labour Party’s childcare subsidy will have limited benefit for ECE providers says the Early Childhood Council.

“More funding for early childhood is always welcome, but a healthy ECE sector needs healthy providers too. A new approach to solving ECE cost pressures is urgently needed,” said ECC CEO Simon Laube.

“70% of providers we surveyed aren’t confident they can recruit teachers now – services are down-sizing and closing, we expect the impact for parents will be longer waiting lists for places in centres come April 2023 when the Childcare Subsidy changes take effect.”

While the subsidy should mean more children attending ECE as the cost goes down for parents, relief for providers will come only indirectly, if at all.

Unlike schools, ECE providers are only funded for children that attend, and with attendance at record lows in many areas and many families still disengaged from early learning following COVID, there’s only slim hope that this childcare subsidy change will be a circuit breaker.

“For providers struggling with inflation, Pay Parity underfunding, blown budgets for relief teachers and low attendance, this will be too little too late – 56% of our surveyed members are pessimistic about their financial viability over the next year,” said Simon Laube.

“We called for government action to address Pay Parity underfunding by Christmas or risk more centre closing, which has been ignored. Help for struggling parents is a good start, but more needs to be done for cost pressures facing centres so parents can be confident they will be able to get the subsidy, not just a really long wait or no place at all before their children turn five years old.”