Childcare sector to get $5b boost in signature NSW budget policy

To increase the number of childcare places, the state government will run a competitive tender process, where the private sector will bid to receive funding, which will be dependent on operators increasing the number of affordable places on offer to families. An independent expert will be appointed to guide the funding and identify the parts of the state with the most need.

The government’s investment will be made through a new Affordable and Accessible Childcare and Economic Participation fund, part of this month’s budget.

Modelling for the government shows that a middle-income Sydney family with one child in full-time childcare could save up to $3900 a year under the reforms because of the increased availability of affordable care.

NSW Premier Dominic Perrottet said accessing affordable childcare, especially in Sydney, was increasingly difficult.

“We know that childcare places are scarce in some postcodes, making it difficult for parents to return to paid work when they want. Improving accessibility to childcare by investing in supply will provide practical assistance to families with young ones,” Perrottet said.


“My government is focused on building a brighter future for our state by helping people pursue their hopes and aspirations. That is what this transformational policy will do.”

Kean said investment in childcare was the best way to improve women’s economic opportunity, increase female workforce participation and close the gender pay gap.

“Childcare costs impede the dreams of women across NSW because many women are only able to keep about 30 cents in each dollar they earn when they return to work,” Kean said.

“Childcare shouldn’t be a postcode lottery. Improving the affordability and accessibility of childcare is a once-in-a-generation economic policy.


“This investment, delivered alongside the Commonwealth’s childcare reforms, is expected to see up to 95,000 women enter the workforce or take on more hours, driving down the gender workforce participation gap by up to 14 per cent within a decade.”

The federal Labor government committed during the election campaign to lift the maximum childcare subsidy rate to 90 per cent for families for the first child in care and increase subsidy rates for every family with one child in care earning less than $530,000 in household income.

NSW Minister for Women Bronnie Taylor said the government’s investment would boost childcare supply, with a focus on increasing affordable childcare right across the state.

“This once-in-a-generation scheme will mean women no longer need to choose between work or caring for their children,” Taylor said. “This package will help break the childcare drought by targeting areas with the least access to affordable childcare, which poses the highest disincentive to parents returning to work.”

The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.

Leave a Comment