Licence to Print Money: Inside Australia’s Billion-Dollar Childcare Industry
Australia’s childcare sector has evolved into a multi-billion-dollar industry, fueled by high demand from working families and substantial government subsidies. Once viewed primarily as a community service, it has become a highly profitable business opportunity, with critics frequently describing prime urban childcare centres as a “licence to print money.” This phrase captures the essence of a system where generous public funding guarantees steady revenue streams, enabling significant returns for owners and investors while raising serious questions about quality, safety, and priorities.
The Scale of the Industry
In 2025, the Australian childcare services market was valued at approximately USD 6.6 billion (around AUD 10 billion), with projections estimating growth to USD 8.8 billion by 2034 at a compound annual growth rate of about 3.23%. Government expenditure plays a pivotal role, with the Child Care Subsidy (CCS) budgeted in the billions annually. For instance, quarterly reports from the Department of Education show estimated federal spending reaching $3.86 billion in the June quarter of 2025 and $4.02 billion in the September quarter, supporting around 1.4–1.5 million children in approved services.
The CCS is paid directly to providers, reducing out-of-pocket costs for eligible families while effectively underwriting the business model. Average hourly fees have risen steadily—from $10.20 in September 2020 to $13.40 by June 2025—contributing to revenue growth despite affordability measures.
The Dominance of For-Profit Providers
For-profit operators now account for about 70% of the sector, driving 95% of its recent expansion. Major players include ASX-listed G8 Education (operating over 430 centres under brands like Kindy Patch and Creative Garden) and Affinity Education (with more than 250 centres, backed by private equity firm Quadrant). These large corporations have grown through acquisitions, with centres changing hands for millions and total sales in the sector nearing $1 billion in 2024 alone.
Executives at these companies often receive substantial compensation. In recent years, CEOs and leaders have secured six- and seven-figure salaries, bonuses up to $500,000 or more, even amid controversies. This profitability stems from the predictable income provided by subsidies, which cover a large portion of fees and allow operators to service debt, expand facilities, and deliver strong returns to shareholders and investors.
The Dark Side: Profits Over People?
The influx of corporate interest has sparked widespread concern that the profit motive compromises child welfare. Investigative reports from outlets like ABC, 60 Minutes, and others have highlighted systemic issues, including understaffing, regulatory breaches, and alleged mistreatment.
- For-profit centres have faced scrutiny for higher rates of safety violations. Affinity Education, for example, recorded over 1,100 regulatory breaches in NSW between 2021 and 2024—averaging more than one per day—with limited fines issued by regulators.
- High-profile incidents include allegations of abuse and neglect, such as children being slapped, mishandled, or exposed to unsafe conditions, often linked to staffing shortages driven by cost-cutting.
- Major scandals involving former employees charged with serious offences have further eroded public trust, prompting parliamentary inquiries and calls for reform.
Critics argue that the focus on margins leads to lower staff wages (despite recent government-funded increases), high turnover, and reduced quality compared to non-profit providers like Goodstart Early Learning, where employee costs represent a higher share of revenue.
Calls for Reform
Advocacy groups, including The Australia Institute, propose excluding for-profit providers from government subsidies—mirroring the model for schools, where private institutions are non-profit and ineligible for direct public funding if profit-driven. This, they contend, would prioritize child welfare over shareholder returns, potentially lowering fees and improving safety without eliminating access.
Recent policy changes, such as the Three Day Guarantee (effective January 2026, providing at least 72 subsidised hours per fortnight regardless of parental activity), aim to boost affordability and participation. However, they also inject more public money into the system, potentially amplifying profits for existing operators unless structural changes address the root issues.
Australia’s childcare industry is at a crossroads. Government subsidies have made early education more accessible, supporting workforce participation and child development. Yet the transformation into a lucrative commercial enterprise has exposed tensions between profit and care. As families entrust their youngest children to these services, the debate intensifies: Should childcare remain a market-driven business, or should it return to its roots as a protected public good? With ongoing inquiries and growing public scrutiny, meaningful reform may finally be on the horizon in 2026 and beyond.
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