The Australian Government has committed to building a high-quality Universal Early Childhood Education and Care (ECEC) system. Yet persistent problems with access, affordability, quality and safety undermine this commitment.
The Real Cost of Profit examines the market basis of Australia’s ECEC system and the role of private for-profit providers, who deliver the majority of our largely publicly funded childcare services. It finds that the for-profit dominated market is at the heart of many of the system’s ongoing problems, including unequal access to services in regional areas, lower socio-economic communities, and for First Nations children. The system fails to consistently deliver safe, high-quality care to all children.
- Over half (54%) of ECEC services are run by private for-profit businesses.
- On average, not-for-profit services outperform for-profit services, providing better quality care at generally lower prices, higher wages, more experienced staff, longer staff retention, and a greater likelihood of operating in under-served and disadvantaged areas.
- Among the large corporate for-profit providers, there are indications that shareholder returns may be prioritised over child wellbeing.
Economic modelling commissioned for the report shows that it also makes better financial sense to direct public ECEC funding to not-for-profit and government providers, rather than for-profit providers.
- Redirecting public ECEC funding to not-for-profit and government providers only would generate at least $1.2 billion more in economic activity in 2026 than the current provider mix, which includes a majority of for-profit services.
- This shift would support an estimated 18,000 additional jobs – including direct jobs in ECEC centres, indirect jobs in the ECEC supply chain, and induced jobs in downstream consumer industries from the spending power of ECEC workers.
- The resulting increase in GDP would also lift government revenue at all levels by more than $360 million in 2026.
Achieving a genuinely universal, high-quality ECEC system will take more than tighter regulation of the existing market. It will require reshaping ECEC as a public good, so public investment builds capacity and quality rather than leaking to private profit.