Local Councils now realising the unintended negative impacts of Childcare Oversupply

Ever since the Australian Childcare Alliance (ACA) NSW declared in early 2017 that there was an oversupply of childcare services, the media (in particular the Australian Financial Review) began pointing out the unintended negative impacts, including the upward pressure on childcare fees as a direct result of a declining income to cover fixed costs.

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In August 2017, the NSW Government introduced its State Environmental Planning Policy (Educational Establishments and Child Care Facilities) 2017 (the SEPP). This SEPP effectively removed all powers from local councils in relation to the assessment of new childcare services other than local parking requirements. In other words, local councils have been bypassed by the NSW Government because of the belief that local councils were creating too many restrictions that were effectively stopping adequate supply to meet demand.

Ironically, a number of local councils have now publicly stated that they are seeing too many new childcare centres approved in inappropriate locations. This includes Hornsby Shire Council, The Hills Shire Council, North Sydney Council, Cumberland Council and the City of Parramatta Council.

In late December 2018, Cumberland’s Mayor and Councillors unanimously resolved that they were concerns about their apparent loss of powers to properly regulate what kind of childcare centres should be approved and where they should be allowed. Cumberland Council has been conducting a public consultation process with their existing local childcare services and the general public about their local supply of places. In April 2019, they are anticipating that they will engage the NSW Government with a view of asking for certain powers to be returned to them in order to achieve a better outcome than what they have currently.

In March 2019, the City of Parramatta’s Councillors will also be debating about its concerns over their perceived loss of powers to properly regulate what kind of childcare centres should be approved and where they should be allowed, especially in low-density residential areas. They too anticipate that pending their decision, they will also engage the NSW Government with a view of asking for greater powers to be returned to them.

ACA NSW President Lyn Connolly and CEO Chiang Lim have had discussions with the NSW Premier, the Hon Gladys Berejiklian MP, and the NSW Minister for Education, the Hon Rob Stokes MP, about the SEPP and childcare oversupply. Minister Stokes was previously the NSW Minister for Planning who introduced the SEPP in draft form in early 2017.

Ironically, both Premier Berejiklian and Minister Stokes confirmed that they had heard of this problem not just from ACA NSW but also from others. They both gave undertakings to look into this issue more closely.

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