Childcare oversupply could lead to unstable businesses and predatory big providers, lobbyists warn. (AAP/file)
A childcare industry lobby group says parts of Sydney, Newcastle and Wollongong have an oversupply of childcare places and has warned that proposed planning changes could make the situation worse.
The New South Wales Government is proposing a shakeup to planning policy for childcare centres, aiming to speed up the development application process.
The Australian Childcare Alliance (ACA) agrees that processing times for development applications have been “grossly slow”, taking around 53 weeks to approve.
But in its submission to NSW Planning, ACA claims there are already excessive numbers of childcare places in suburbs across Sydney, Newcastle and Wollongong.
From submission: Draft State Environmental Planning Policy (Educational Establishments and Childcare Facilities) 2017 can create more childcare oversupply.
(Supplied: ACA, condensed tables)
Its research shows that in many suburbs the number of childcare places already approved and in the pipeline for the next three years far exceeds projected demand for the next 14 years.
Some of the Sydney suburbs identified as having an oversupply include Ashfield, Hornsby, Lane Cove, Randwick and Warringah, along with Newcastle, Lake Macquarie, Gosford and Wollongong.
ACA president Lyn Connolly said tighter controls for the sector, similar to those that apply to aged care centres and pharmacies, would ensure new childcare centres go only where they are needed.
“It’s ridiculous. Pharmacies, aged care services, lottery agents and schools — they’ve all got planning regimes that regulate where they can go to ensure they only go into areas of need,” she said.
“We are such an over-regulated industry as it is, so how can it be left up to market forces to decide where childcare centres are placed?”
Ms Connolly said although parents might benefit from greater choice in the short term, eventually smaller childcare centres will not be viable.
“Once a centre is not viable, the centre will close and then the children are shunted from one centre to another,” she said.
“It’s bad for children because they don’t have any security or continuity, and yes, families will be able to get a place in another centre, but that’s more inconvenience because they’ve got to go and check it all out.”
Trouble finding childcare for twins
Helsie Bird waited for more than four years to find childcare for her twin boys. (ABC News: Liz Farquhar)
Newcastle mother Helsie Bird has had her twin boys, Beckett and Albee, on waiting lists at several childcare centres since she fell pregnant more than four years ago.
She said after getting nowhere she turned to employing a family friend as a nanny in order to return to work at the small business she runs with her husband.
But late last year, local childcare centres finally started calling her back.
“Finally, when the boys were three and a half, we had a phone call from a childcare centre that had a spot for them, so we snapped that up pretty quick,” she said.
“Once it rained, it poured. We’ve had almost five centres get back to us with positions.
“It was very tricky with twins, we actually had a centre call us back and offer us a position for one child, which didn’t really work.
“They didn’t really understand having two kids at once needing childcare.”
Ms Bird said having occupancy rates around 80 per cent may finally put parents in a position where they have some choice about childcare.
“I think it could be good, it offers a lot more flexibility if your days at work change.
“It’s fabulous for me, being able to put the boys in and have the option of adding some more days, especially now they’re coming up to school age. It’s important for them to get used to leaving the house.”
But the ACA’s Lyn Connolly suggests the oversupply could lead to a reduction in the quality of childcare services.
“Once there are viability issues, there’s not enough money in the centre to be able to buy and do the things you need to be doing. So that’s not good for children, for families, and it’s certainly not good for small business.
“Small businesses carry this nation, we’re the suppliers of jobs, that’s where most of the employment is, and none of these small businesses are being treated fairly.”
Open door to predatory practices
Labor’s spokeswoman for Early Childhood Education Kate Washington said the concern is that smaller centres will be forced out by big corporate providers.
“(The concern) is that this is about trying to allow bigger corporates in, and that it opens the door to predatory practices,” she said.
“This is the big thing across the industry that people are saying to me — a great deal of concern about predatory practices that we’ve already seen in the past with ABC Learning and Eddie Groves.
Opposition spokeswoman Kate Washington is concerned about the predatory practices of big providers. (ABC: Rob Virtue)
“It’s an industry that’s open to it. We’ve seen it in the past, and we don’t want to see it again.
“The concerns with this new planning policy are very real and they could see good services going under. That’s not in the interests of families.”
Ms Washington said streamlining development applications is welcome, but more controls are needed.
“We must ensure that the quality assessments are done on the applicants and we should be looking at where they are going.
“We don’t want them going into areas where there is already significant supply and where the need is already being met, but that is what we fear will happen.”