Long daycare in crisis with hundreds of centres at risk of closure

By the Editorial Team · Wednesday, October 14, 2026

Over 150 long daycare centres in Australia have closed in the past two years, with nearly 280 more at risk due to rising operating costs and steep regulatory fee increases. This trend threatens the sustainability of universal childcare and has prompted calls for urgent government action to prevent further losses and ensure stable access to early education ahead of the 2028 federal election.

More than 150 long daycare centres have shut down across Australia in the past two years, with nearly 280 additional facilities at risk of closure within the next year, industry leaders have warned. The Early Learning and Care Council of Australia (ELACCA) cited escalating operating costs and sharp regulatory fee hikes as primary factors driving the sector’s struggles, raising concerns about the future viability of universal childcare initiatives.

The ELACCA’s recent sector sustainability report highlighted that some state-based regulatory fees have increased by as much as 1,100 percent, compounding pressures from rising interest rates, rent, insurance, and wage costs. Award wages have increased by 4.75 percent, while workers’ compensation levies have surged by 20 to 30 percent in some states. These expenses have outpaced caps on fee increases, squeezing revenue streams for providers.

According to the council, this combination of regulatory and economic pressures has created “extreme pressure and profound uncertainty” within the sector. They warn that although some areas currently experience a surplus of childcare spots, the current market correction is “ad hoc” and could quickly lead to undersupply if providers continue to exit the market.

Demographic and societal shifts also contribute to declining enrolments in some regions. Falling birthrates, changing work patterns such as increased parental remote work, greater access to paid parental leave, and reliance on family members for childcare have all reduced demand. The ELACCA additionally pointed to the broader cost-of-living squeeze as a factor limiting childcare affordability for families.

The association noted that recent closures have not been limited to low-quality providers. Data from 151 of the 152 centres that closed show 13 percent were rated as exceeding the National Quality Standard (NQS), while 66 percent met the NQS. This indicates that closures include centres providing high-quality early education.

The Australian childcare sector has become a significant issue in the lead-up to the 2028 federal election. Both Labor and opposition parties have pledged to improve childcare affordability and quality, though their approaches differ. Labor has emphasized reforming the existing system, while the Coalition has proposed measures such as income splitting and tax deductions to offer families additional choices.

Amid the mounting challenges, ELACCA called on federal and state governments to demonstrate leadership to halt ongoing closures and restore stability to the sector. The association warned that without decisive government intervention, the trend of service losses and increasing business uncertainty will continue, jeopardizing the government’s goal of universal early learning and care.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.