The childcare sector in Australia is facing significant challenges as 203 long day care services have closed over the past year, with more closures anticipated. This decline comes amid rising concerns about safety, including alleged sexual abuse cases and other serious incidents, which experts say have eroded public confidence in early childhood education.
Analysis by Peter Hurley, director of the Mitchell Institute, shows a sharp increase in closures, with 203 centres shutting their doors between June 2025 and June 2026. This figure nearly doubles the 90 closures recorded in 2024 and surpasses the 149 closures in 2025. Nearly one-third of these closures involved large providers. Hurley explained that some level of turnover in the sector is expected, noting that the system is designed to be “dynamic” to better align supply with demand.
Despite generous government subsidies totaling $16.2 billion, the number of children enrolled in long day care has dropped sharply, with 24,350 fewer children in March 2026 compared to the previous year. The decreasing enrollment is attributed to families withdrawing their children in response to increasing concerns about safety, mistrust in the sector, and broader pressures such as a declining birthrate and high costs.
The impact of the downturn is being felt across the industry. Edge Early Learning, which operates 68 centres in Queensland, South Australia, and the Australian Capital Territory, entered voluntary administration on August 25, raising concerns about the future care of thousands of children and their families. Additionally, childcare provider G8 has reported a $38.8 million loss for the first half of the financial year. The company is described as being in a "terminal downward spiral," influenced in part by reputational damage following the alleged sexual abuse scandal involving former employee Joshua Dale Brown.
Dr Erin Harper, a lecturer in early childhood education at the University of Sydney, characterized the current state of the childcare sector as reaching a “tipping point,” emphasizing how eroding public trust is compounding the sector’s difficulties.
In response, Education Minister Jason Clare highlighted the government’s efforts to strengthen and improve safety within the early childhood education system. Clare noted that ongoing reforms and the proposed establishment of the Early Education and Care Commission are part of a broader strategy aimed at addressing the challenges facing the sector. However, experts and industry observers warn that without further decisive action, the sector’s decline is likely to continue.