NSW Parliamentary Inquiry Finds ECEC Sector “Under Profound Strain” as Major Reform Push Emerges

A landmark New South Wales parliamentary inquiry into the early childhood education and care (ECEC) sector has delivered one of the most significant and wide-ranging critiques of the system in recent years, warning that parts of the sector are facing a crisis in safety, workforce sustainability, governance and public trust. 

The 248-page report, Early childhood education and care sector in New South Wales, contains 35 recommendations and a series of strong findings relating to regulation, workforce pressures, for-profit provider models, child safety, transparency and inclusion. 

The inquiry was established to examine the safety, quality and effectiveness of the ECEC sector in NSW following mounting concerns about child safety incidents, workforce shortages, regulatory oversight and the broader commercialisation of early childhood education and care. 

Key findings from the inquiry

Among the most significant findings was the committee’s conclusion that, “in general, large for-profit providers are of a lower quality and are less safe for children than not-for-profit (including government and community run) early childhood education and care services.” 

The report also found that private equity-backed services “have no place in the early childhood education and care sector,” signalling growing political concern about the influence of corporatisation and investment-driven models within the sector. 

The committee additionally concluded that systemic weaknesses, combined with what it described as a “lax regulatory approach”, had enabled predators to enter the sector and abuse children. 

Other major findings included:

• concerns that the NSW regulator failed to respond appropriately to services with long histories of non-compliance and poor ratings 
• evidence that workforce shortages, casualisation and low wages are undermining quality and continuity of care 
• concerns that real estate investors and developers are influencing where services are built, contributing to service gaps in lower socioeconomic and regional communities 
• acknowledgment that CCTV may assist investigations, but is “no substitute for adequate staffing and supervision” 

Workforce pressures emerge as a central concern

Throughout the report, workforce attraction and retention challenges are repeatedly identified as a foundational issue impacting both quality and child safety.

The committee described chronic understaffing, excessive workloads, low pay, workforce casualisation and high turnover as “entrenched features” of the sector. 

In the Chair’s foreword, Committee Chair Abigail Boyd MLC argued that quality and safety are “fundamentally linked” to workforce conditions, stating that the sector requires “well-paid and well-trained staff” who can remain in the profession long-term. 

Among the workforce-related recommendations were calls for:

• continued work toward pay parity with school teachers 
• paid annual leave for professional development and training 
• tighter controls around staffing waivers 
• a “zero tolerance” approach to ratio breaches that may place children at risk 
• stronger child safety training requirements through a proposed National Educator Register 

The report also raised concerns about trainees and apprentices being counted in educator-to-child ratios while unsupervised, recommending urgent review of these practices. 

Major regulatory reform recommendations

A substantial portion of the report focuses on regulation, transparency and oversight.

One of the headline recommendations is the creation of a National Early Childhood Education and Care Commission to oversee national data analysis, regulatory safeguards and infrastructure planning.

The recommendation comes amid growing national discussion about the role a centralised commission could play in strengthening oversight, improving service planning and coordinating long-term reform across the ECEC sector. Recent federal reform discussions have also explored the establishment of a national commission alongside wider child safety reforms, workforce measures and strengthened compliance settings.

The report also called for:

• mandatory assessment and rating of every service at least every three years
• publication of internal regulatory risk ratings for services
• significantly more unannounced spot checks
• powers for the NSW Government to appoint administrators to poorly performing services
• restrictions preventing providers with poorly rated services from opening new centres

The report was also released shortly after the NSW Early Learning Commission launched its new website, signalling the regulator’s shift toward a more visible and accessible public-facing role. That context is important given the report’s strong focus on transparency, risk ratings, unannounced spot checks, assessment and rating, and clearer information for families and providers.

The committee also urged governments to improve transparency around provider finances, including how subsidies are spent and how much revenue is directed to rent and property costs.

Child safety and reporting reforms

Child safety reforms formed another major focus of the inquiry.

Recommendations included:

• introducing a requirement that at least two staff members remain within line of sight of each other when interacting with children 
• creating a single reporting line for child safety concerns in ECEC settings 
• investigating a central database of problematic behaviours involving ECEC staff 
• ensuring all potentially criminal matters are referred directly to NSW Police 

The report also acknowledged growing concerns about the administrative burden being placed on educators through rapidly introduced reforms, warning that poorly implemented changes may worsen workforce retention challenges. 

Inclusion and access also highlighted

The inquiry dedicated significant attention to the experiences of children with disability and additional needs.

Recommendations included establishing a NSW-wide inclusion funding stream, improving workforce capability to support inclusion, and preventing services from excluding children because of additional needs. 

The committee also stated that access to high-quality ECEC “should not be dictated by postcode or income.” 

A defining moment for the sector

The report represents one of the strongest parliamentary critiques of the ECEC sector seen in Australia to date and is likely to intensify national debate around regulation, workforce reform, provider transparency and the future role of for-profit operators in early childhood education and care.

The report comes at a time of unprecedented reform activity across the ECEC sector nationally, with governments already progressing major child safety reforms including a National Early Childhood Worker Register, mandatory child safety training, expanded compliance powers, unannounced spot checks and proposed national governance reforms.

While many of the recommendations would require cooperation between state and federal governments, the report signals increasing political appetite for structural reform and stronger oversight across the sector.

The full NSW Parliamentary Inquiry report can be accessed here.