LDC new supply growth at just 2.7%, OSHC sees another big jump says latest NQF snapshot
The Sector > Provider > General News > LDC new supply growth at just 2.7%, OSHC sees another big jump says latest NQF snapshot

LDC new supply growth at just 2.7%, OSHC sees another big jump says latest NQF snapshot

by Jason Roberts

August 08, 2022

The growth in supply of new long day care (LDC) centres across Australia rose just 2.7 per cent year on year according to the Australian Children’s Education and Care Quality Authority’s (ACECQA) latest NQF Snapshot.


The result was the second consecutive print below 3.0 per cent and fifth quarterly decline in the number of new licenses being issued compared to the year before and likely reflects a supply dynamic constrained by the lasting impacts of the COVID-19 pandemic, skills shortages and rising prices.  



Looking at the performance of the key states and territories highlights the degree of reductions with all seeing growth rates in new services at least halving since their respective peak levels recorded before the COVID-19 pandemic. 


New South Wales supply is growing at 1.6 per cent, down from a peak of 4.0 per cent in 2019, Victoria at 4.8 per cent, down from a recent peak of 8.0 per cent in 2018, Queensland at 2.0 per cent compared to 5.0 per cent in 2019 and South Australia which saw a slight tick up to 3.5 per cent growth this quarter is still well below 2019’s 6.5 per cent.


With ongoing workforce availability constraints and higher prices it is unclear whether we have as yet seen supply reductions bottoming out for this cycle but if history is any guide the increased affordability measures proposed to come into effect next year will likely precipitate another round of development regardless of broader macro headwinds. 


OSHC new licenses issued jumps 5.5 per cent with NSW leading the way


The second quarter of 2022 saw the number of outside school hours care (OSHC) services in operation across Australia rise to 4,856, an increase of 5.5 per cent and the second 5.0 per cent increase this year. 



The scale of the recent increases has been unprecedented with both Victoria, (up 11 per cent) and New South Wales (up 5.9 per cent) being the key drivers of this recent surge as the market responds to a significant push in new school construction from both state Governments that have also been supported by extensive subsidies. 


Family day care continues its bounce back and kindergartens starting to stir


The family day care (FDC) setting, which has undergone a severe contraction since a crackdown on fraudulent providers and more rigorous regulatory requirements over the last several years, has recorded a second consecutive annual increase in new licenses. 


There are now 498 licensed schemes in operation, 2.0 per cent higher than the same period last year which according to the Department of Education’s Child Care in Australia Report care for around 90,000 children per quarter, approximately 10 per cent of those attending LDC services.  



As per last month Victoria showed the strongest growth up 12.8 per cent year on year which was more than enough to mitigate the weaker performances across the other states. 


Elsewhere the kindergarten and preschool approval increases were notable with a relatively unusual increase of 1.5 per cent driven largely by New South Wales which was up 2.5 per cent and likely reflects the early response to the state’s ambitious pre-kindergarten policy initiatives  announced at its 2022-23 Budget. 


To access ACECQA’s latest snapshot please see here

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