Unpacking the NSW Budget 2022-23 – What does it mean for the sector’s key stakeholders?

Jason Roberts

Jun 21, 2022

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After a busy week of policy announcements associated with the early childhood education and care (ECEC) sector New South Wales Treasurer Matt Kean has now handed down the 2022-23 State Budget and in so doing provided a deeper insight into the broad range of new policy initiatives in play.

The overall funding commitment contained within the Budget and allocated to ECEC is a very material $15.9 billion which will be spent over a ten year period with the initiatives announced in the 2022-23 Budget categorised into two categories; those that are spread over a four year time horizon, and those that are spread over a ten year time horizon.

The longer dated initiatives are structural in nature and require more planning and capital to implement.

This article aims to break down the commitments into their various categories as well as provide some insights on the likely impact they will have on the key stakeholders in the sector namely children, families, team members and providers.

2022-23 Budget Initiatives - Short term commitments - 1 to 4 years

In 2022-23, the NSW Budget will invest $1.1 billion as part of the “Best start in life for young children” program which focuses on measures that will create a sustainable, accessible, high quality ECEC sector.

Fee relief policies for children attending preschools, including 4 year olds in long day care programs

Policy commitments - $177.9 million has been allocated for this year, and the following three years, to provide fee relief to families whose children attend preschools. 55 per cent of the funding will be available for families with children between three and five years of age attending community, mobile or Department of Education preschools with the balance for families with children in the year before school in a preschool program in long day care settings regardless of governance type.

Stakeholder impact - The funding for three to five year olds attending community, mobile or Department of Education preschools is not new. A $4,000 per child per year subsidy is in place and will continue for the next four years. The pledge to fund preschool programs in long day care (LDC) settings however is new. Eligible children will receive $2,000 per year to set against their fees. The gap between LDC preschool fees and their community, mobile and Department of Education peers will consequently be reduced.

Fee relief policies for 3 year old children attending preschool programs in long day care

Policy commitment - $15.5 million this year and $64.1 million over four years has been allocated to trial a new program to extend preschool funding to three year old children accessing a preschool program in an LDC centre.

Stakeholder impact - This is a new policy initiative and much like the commitment to offer $2,000 per child attending a preschool program in the year before school in LDC will help level the affordability gap between LDC preschool programs and their community, mobile and Department of Education peers. Further detail on the implementation of the policy has not been provided but funding trials will start in 2023.

Workforce shortage focused policies to attract and retain ECEC educators

Policy commitment - $53.1 million this year and $281.6 million over four years has been allocated to try and address existing workforce shortages and build for anticipated future demand associated with the rollout of universal year before school preschool.

Stakeholder impact - The package includes a range of policy measures that will support educators looking to qualify via scholarships of up to $25,000 for teachers and $2,000 for Diploma and Certificate III students. In addition, employer supplements for staff retention will also be offered although details on this policy thread have not yet been provided.

Policies measures to improve children’s developmental screening Policy commitment - $6.6 million and $27.3 million over four years has been allocated to fund developmental checks for children attending preschools in both metropolitan and rural areas. This is part of a combined package delivered by the Department of Education and NSW Health through the Brighter Beginnings initiative.

Stakeholder impact - This set of measures will directly impact children that are developmentally vulnerable and provide an evidence base for further action required to support the specific needs of the child.

Policy measures to improve access to outside school hours care Policy commitment - $18.0 million and $37.9 million over three years to improve access to Before and After School Care (BASC) programs, including targeted transport services and innovative solutions to support areas currently lacking a service. The commitment includes $16.2 million over two years to increase access to BASC services for students in regional and rural schools. Stakeholder impact - This set of measures is included in the Educational Foundations for Success section of the Budget and focuses on ensuring greater access to BASC services for families in areas where there is currently limited services.

2022-23 Budget Initiatives - Long term commitments - Up to 10 years

Although not specifically accounted for in this year's Budget, the NSW Government has announced a set of longer term ECEC focused policy initiatives that it intends to deliver over the course of the next 10 years.

Policies to introduce universal (free) pre-kindergarten (pre-school) in the year before school

Policy commitment - The NSW Government has committed to introduce a universal pre-kindergarten year in the year before primary school by 2030 that will provide free preschool for five days a week for every child in NSW at a cost of $5.7 billion over ten years.

Stakeholder impact - At this stage there is very little tangible information available on how this policy will be executed. The NSW Government has earmarked $53.4 million initially to consult, investigate and design a model for its delivery.

What is known however, is that the policy will impact all ECEC services that are currently offering a preschool program to children in the year before school. However, what we do not know is how the funding mechanism back to providers will work, whether funding levels will differ between providers, whether the curricula offered will need to be adjusted to be school system compliant, whether new qualifications are required for educators in these programs and more. These questions will need to be resolved as part of the consultation process.

Policies to address ECEC accessibility challenges being faced in communities across NSW

Policy commitment - The creation of a fund to target known barriers to families accessing quality early childhood education and care by providing major incentives to enable providers to extend their services to more families, more affordably at a cost of $5.0 billion over ten years.

Stakeholder impact - The Affordable and Accessible Childcare and Economic Participation Fund will provide a pool of development capital for approved providers to help fund the expansion of existing ECEC infrastructure or the establishment of new centres.

Successful projects will be those that are helping reduce extreme supply and demand mismatches in communities across NSW. $24.7 million over four years has been allocated to fund the building of data capability and to partner more closely with early learning services to deliver seeking to access the fund. No further information is available at this juncture.

The section of the 2022-23 Budget relevant to ECEC can be found here.

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