Source: The Conversation (Au and NZ)
Reports of shocking abuse and neglect in our early childhood system mean many Australians are questioning whether they can trust childcare centres.
In our new report, we look at some of the broader factors that can increase risks in the childcare system.
We show how it is common for daycare centres to change owners or providers. The sector also has high staff turnover and relatively low pay. The result means Australia’s early childhood sector is very different to other parts of our education system.
Churn and low pay
The most recent data from the Australian Taxation Office shows in 2022–23, more than half of jobs in child care services (52.4%) lasted less than one year. This was more than double the rate in primary and secondary education, at 24.5%.
This churn is exactly the opposite of what children need to thrive – stable environments and warm and consistent interactions with trusted educators.
Early childhood educators and child carers earn a median of about A$34.30 an hour, compared with $42.40 across all occupations and $62 for school teachers.
The organisations that run centres also tend to have considerable turnover. Of the long day care services operating at the end of 2025, about 32% had changed approved provider (the legal entity responsible for a centre) at least once since 2013.
The rate increased to more than 40% among for-profit centres, compared with 11% of not-for-profit centres.
Daycare places have grown rapidly
Overall, the Australian government does not directly fund daycare centres. Instead, it takes a market-based, demand-driven approach.
This sees a means-tested subsidy (the “child care subsidy”) paid to the service provider, who then pass it on to families as a fee reduction. It operates like a voucher and can cover up to 95% of fees, depending on a families’ income and number of children in care.
The subsidy creates demand (families asking for care), which providers respond to by creating supply (in the form of childcare places).
This approach has been enormously successful in increasing daycare places.
Over the past 25 years, long daycare places grew from 190,900 to about 720,000. Almost all growth since a national register began in 2013 has come from private for-profit providers. They now account for 74% of places.
What about quality?
But the subsidy system does not necessarily encourage high-quality childcare.
The subsidy treats one hour of care as the basic unit of funding. For daycare services, the hourly cap (the maximum government subsidy) was based on average market fees, plus a 17.5% loading when the subsidy was introduced in 2018. It has since been indexed to inflation.
The subsidy rate therefore carries forward the pricing structure already embedded in the market, rather than starting with the actual cost of high-quality care.
We know much of the cost of childcare delivery are fixed staffing and infrastructure costs. So it means there is very little room for providers to improve conditions without increasing out-of-pocket fees to parents. It is an approach that supports a minimum service and cements in existing deficiencies, including low wages.
Where are the problems?
The federal government now publishes data on “enforcement actions” recorded against large providers over the past two years. Enforcement actions cover a broad range of instances where providers do not comply with health and safety regulations.
Large providers are those that operate, or intend to operate, 25 or more services. While regulators have noted serious concerns with many community and not-for-profit providers, we found daycare services run by large, private for-profit providers were more than three times more likely to have an enforcement action recorded compared to all other management types.
Next steps
There is a lot to like about Australia’s early childhood education and care system. Many early childhood educators are highly dedicated to their work, despite relatively poor conditions.
But there are several risk factors. High staff turnover, tight margins and low wages create instability, and a lack of accountability for quality and safety.
Governments should investigate the possibility of funding based more on the cost of high-quality childcare provision. This means calculating the true cost of inputs like wages and infrastructure to deliver high-quality early learning rather than basing funding on what the market has charged before.
Governments should also play a greater role where there are fewer services and in disadvantaged areas, where stable, high-quality services are needed most. It can do this through a proposed Early Education and Care Commission, which would have more oversight of service quality and location.
Australia can rebalance the push to grow places and keep costs down with a stronger focus on the needs of children. Stability should be recognised as a core feature of a high-quality early childhood system.
Peter Hurley has previously received funding from Minderoo to undertake research into early chlidhood education and care.
Melissa Tham has previously received funding from Minderoo to undertake research into early chlidhood education and care.
Sarah Pilcher does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Original source: https://analysis1.mil-osi.com/2026/08/03/australias-childcare-system-is-full-of-churn-this-isnt-good-for-quality-or-safety/