ACA releases detailed report on ECEC supply demand

The Australian Childcare Alliance (ACA) has today released a report, commissioned by the ACA, the Early Learning and Care Council of Australia (ELACCA) and Australian Community Children’s Services (ACCS), that examines the results of a national survey of early childhood education and care (ECEC) operators.

The survey focused on availability, enrolment and performance impacting the respondents and their views on the main issues influencing the sector generally.

A key finding of the report was that the net increase in long day care centres in 2017 was approximately 2 to 3 times more than what is estimated to be needed in 2021, and that despite quite significant increases in new centres in recent times, reductions in the price of ECEC services have not followed through.

Paul Mondo, President of the ACA, noted “If the same growth is to be continued in the coming years, there is likely to be an enormous impact on the viability of all services.”

He went on to note that “This report effectively illustrates that increased supply does not bring costs down for families,” contrary to the belief that increased supply would lead to reduced prices and that centres affected by a high supply catchment are just as likely to raise fees to offset costs regardless of occupancy levels.

Although not commenting directly on the issue of how new supply was impacting the quality of care in the ECEC sector, Mr Mondo confirmed the ACA view that “Government has a role to ensure responsible investment in the early learning sector,” and highlighted that precedents, such as the Pharmacy Location Rules, exist whereby place of business location frameworks can be effectively executed to improve access.

Other key highlights from the report include:

• Occupancy rates across the centres surveyed fell year-on-year in Victoria, Queensland, South Australia, Tasmaina and both territories, but remained stable in Western Australia and rose in New South Wales;
• Average occupancy rates for NSW and Victorian centres were around 80 per cent, and around 71 per cent for Queensland, WA and SA centres;
• 70 per cent of centres in Victoria reported wait lists for 0 to 2 year places. This fell to 61 per cent in NSW, 45 per cent in WA, and 31 per cent in QLD;
• Based on current total licensed places and ABS data on children between the age of 0 to 4 years old, SA is the state with the most oversupply of places relative to children in Australia, and Queensland the least;
• Of the centres surveyed, SA and Queensland had the highest proportion that had been open more than 10 years (at 69 per cent) with Victoria recording the lowest percentage of centres (58 per cent) that had been open for more than 10 years;
• Centre break-even occupancy rates of 60 per cent to 70 per cent were reported on average across Australia; and, 
• Regional/remote centres had the most centres with occupancy levels below 60 per cent, with Queensland and Victoria showing significant divergences in occupancy levels between metropolitan and regional centre performance.

Survey respondents were also asked to identify key areas of concern for their centres and the sector generally. Respondents highlighted concerns around new centres opening and impacting occupancy; concerns around staffing matters such as availability; cost and quality; and, concerns with regulatory and funding issues.

In addition, there was a general sense reported that the overall perceptions of the sector by the general public needed to change, with specific reference to educating the public on the importance of the role played by ECEC professionals, and to evolve thinking away from historic perceptions of ECEC provision as “babysitting” towards ECEC provision as being a fundamentally important developmental and educational component of early years education.

A total of 1,658 centres were included in the report analysis. Of these centres, 889 responded to an online survey with the balance of data being received in the form of data sets from Goodstart Early Learning, the YMCA, Foundation Early Learning, Guardian Early Learning and SDN Children’s Services. Respondents were asked to provide information regarding enrolment for the week ending 25 May 2018 and for the same period in 2017. The survey was conducted between August and October 2018. The data collection and analysis was conducted by Urban Economics, a specialist economic and market research consultancy.

A link to the full report can be found  here.