Child Care: Tipping Point of Supply V Demand

While there has been a lot of focus on where there are enough child care workers to meet demand, a more important question to ask is: are there enough child care centres to meet demand?

We are at the tipping point. According to a survey from Australia Talks, 57% of rural families struggle to access child care. This compared to just 41% of families in inner-metro areas. Child care is a vital step in a child’s development. It’s their opportunity to socialise, start their education journey, and it allows parents to get back to work and time to practice self-care. In rural communities, parents may have to travel over 100 kilometres to find their nearest child care centre, with many closing down despite hundreds of nearby families.

There are few barriers to opening a new child care centre, which is why certain areas are over-supplied. This has led to many centres being squeezed out of business. There are simply not enough families to cater to. However, there is also a vast under-supply in other geographical areas.

With over 7,000 child care centres across Australia, we have swung from shortage to oversupply overall. However, in terms of investment, a well-located child care centre will meet the needs of the community. While in areas of oversupply, families don’t see the benefit. For example, the cost of running a licensed centre doesn’t change when there are more centres in the area. So, it’s impossible to reduce fees even if occupancy targets are met. Many child care centres cannot keep up with demand in inner-metro areas. It has resulted in many parents seeking to sign up for child care services before their children are even born. With the government providing additional subsidies, experts predict that the child care sector will need almost 40,000 new staff by 2023. However, with so many rural communities in need of child care, that number could be even greater as investors look to open in those areas.


This Article is for general information only and should not be relied on as advice. You should consider your personal situation and seek advice that is specific to your circumstances before making any decisions based on this information. Liability limited by a scheme approved under Professional Standards Legislation.

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