LDC attendance growth continues to underwhelm despite record CCS disbursed latest DoE data shows

The year on year growth rates of children’s attendance at long day care (LDC) centres across Australia has continued to moderate despite record levels of Child Care Subsidy (CCS) entitlements being disbursed over the same period new data from the Department of Education has shown.

The number of children attending an LDC during the three months ended June 2024 was 811,090, an increase of just 0.9 per cent on the same period last year, and markedly lower than the 2.1 per cent year on year growth rate recorded in June 2023. 

It’s important to note that the June quarter historically does exhibit lower attendance levels than at other points in the year as families entitlement availability can be impacted by “end of financial year” considerations and they incidence of public holidays in the period but regardless of the factors growth rates were undeniably below historic norms in the period. 

Across the larger states New South Wales and Victoria saw attendance rates grow by 0.6 per cent and 1.5 per cent respectively but Queensland actually saw a rare contraction in attendance year on year of 0.6 per cent. 

What is apparent about the ongoing moderation in attendance growth is that it is happening against the backdrop of record subsidy injections into the sector via CCS entitlements. 

A total of $3.65 billion of CCS was disbursed in the three months to June 2024, an increase of 25.8 per cent on the same period last year, with around 85 per cent of that total finding its way to families using LDC which also touched record levels.

To put the increases in perspective, total subsidy entitlements are now 86 per cent higher than they were five years ago and 124 per cent higher than they were 10 years ago with the most recent quarter clearly pushing to new records. 

Yet, as noted, despite the step change higher in CCS disbursements after Cheaper Child Care changes, attendance level growth has been marginal at best especially considering the size of subsidy increases. 

This can be seen clearly when comparing subsidy and attendance percentage changes post the implementation of the Child Care Subsidy in July 2018 and the Cheaper Child Care Bill in July 2023. 

It therefore seems that the relationship between subsidy injections and attendance growth appears to have diverged when comparing the two most recent major policy shifts. 

From a participation perspective this is a concerning trend that may imply demand for early learning has plateaued for the moment with families more inclined to “bank” subsidy created affordability savings than invest them in additional days of early learning, a response that would be consistent with ongoing “cost of living” challenges. 

With cost of living pressures likely to persist this dynamic is unlikely to change in the short term although with signs the Australian economy is starting to slow, inflation having peaked and expectations of interest cuts beginning to harden, 2025 may see attendance growth start to pick up again. 

To review the Department of Education data please click here.