Minns Government announces $1.8 billion investment to reshape early learning in NSW

The New South Wales Government has announced a $1.8 billion investment in early childhood education and care as part of the 2026–27 State Budget, unveiling a suite of reforms designed to expand access to preschool, strengthen the workforce and improve quality across the sector.

The package builds on the Minns Government's broader early learning reform agenda and includes a new Universal Preschool Funding model for community preschools, continued delivery of 100 public preschools, additional co-located early learning services on school sites and ongoing investment in regulatory oversight.

A centrepiece of the announcement is the introduction of a Universal Preschool Funding program, which will replace the existing Start Strong funding model.

Under the reforms, eligible not-for-profit community preschools will receive funding designed to fully support the operating costs of preschool programs for three and four-year-old children. The Government said the funding model has been developed to better reflect operating costs and award wage increases and will incorporate mandatory educator wage increases from the beginning of 2027.

Deputy Premier and Minister for Education and Early Learning Prue Car said the reforms were designed to improve affordability while supporting quality outcomes.

"We've listened to educators and families as we've worked to reform the sector's funding model, tying investment to fair award wages and actual operating costs."

The Government has reaffirmed its commitment to establishing 100 public preschools across New South Wales.

According to the announcement, all 100 projects have now received planning approval, with 95 under construction and two already operating. Once complete, the network is expected to create capacity for around 9,000 children in the year before school.

The Budget also includes funding for 11 additional early learning services to be co-located on public primary school sites through a partnership with the Australian Government's Building Early Education Fund.

Alongside expanding access, the Government says the investment is intended to support a more sustainable workforce while continuing to strengthen quality across the sector.

The announcement builds on reforms introduced in 2025, including the establishment of the NSW Early Learning Commission, expanded regulatory powers and increased compliance activity across early childhood education and care services.

While the largest direct funding measures announced in the Budget are targeted towards eligible community and not-for-profit preschools, the reforms are also likely to have significant implications for for-profit long day care providers delivering preschool programs.

At this stage, the Government has not announced equivalent operating funding arrangements for for-profit services. However, the package is expected to influence the competitive landscape in several ways.

One of the most significant implications is likely to be workforce attraction and retention.

The Universal Preschool Funding model includes funding for mandatory educator wage increases from 2027 for eligible community preschools. If those increases are not matched by equivalent funding for for-profit providers, services may face increased competition when recruiting and retaining qualified educators.

For-profit providers may need to place greater emphasis on remuneration, career progression, professional development, workplace culture and employee wellbeing to remain competitive in an already constrained labour market.

At the same time, higher wages across parts of the sector may improve the overall attractiveness of early childhood education as a career, helping attract more people into the profession over the longer term.

The continued rollout of public preschools and additional co-located early learning services may also increase competition in some communities, particularly for children in the year before school.

Services operating near new public preschool sites may wish to review enrolment strategies, community engagement initiatives and their educational offering as families consider an expanding range of preschool options.

Regardless of provider type, all services are expected to operate within an environment of increased regulatory oversight.

The continued investment in the NSW Early Learning Commission signals that governance, compliance and educational quality will remain central to the Government's reform agenda, with all approved providers expected to demonstrate strong systems and continuous improvement.

While the Budget provides a clear direction of travel, many implementation details have yet to be released.

Approved providers will be watching closely for further information on:

• eligibility criteria for the Universal Preschool Funding model;
• how educator wage increases will be funded and implemented;
• the interaction between the new funding model and existing preschool funding arrangements;
• the rollout of additional public preschool places; and
• any future workforce initiatives that may extend beyond the community preschool sector.

The announcement represents one of the most significant investments in New South Wales early childhood education in recent years. While community preschools stand to benefit most directly from the new funding arrangements, the reforms are likely to influence workforce dynamics, competition and quality expectations across the entire early childhood education and care sector.

Read the NSW Government announcement here.