Childcare Industry Demands Urgent Fix to Inclusion Support Program Before Wider Reforms
Australia's childcare sector is sounding alarm bells over systemic failures in the government's inclusion support program, warning that children with complex needs are being routinely turned away due to funding gaps and bureaucratic delays. Industry leaders insist these critical issues must be resolved before implementing broader structural changes to the childcare system.
Funding Shortfalls and Diagnostic Barriers Plague Support System
The inclusion support program, designed to provide additional staff for children with disabilities and complex needs, is delivering only half the necessary funding, forcing childcare centers to cover the remaining costs themselves. Advocates reveal that centers cannot even apply for this support until a child receives a formal diagnosis, a process that can take between two and five months to complete.
"They were not ready to wait, because we almost got the approval," said Nawaz, a father whose son Zayne was forced out of two Sydney childcare centers. "The NDIS person came to our place and did their interview with Zayne and everything ... so we said that to the daycare and the center manager still didn't wait. They said, no, no, no, you have to find another one."
Staff Burnout and Economic Consequences
Paul Mondo, president of the Australian Childcare Alliance, explained that children with complex needs struggle most during their initial daycare transition, precisely when government support remains inaccessible. "If children are not supported adequately, that does put undue pressure on that workforce to be able to cope in a really complex environment at times," Mondo stated.
Research from the University of Queensland confirms that inadequate inclusion support is a primary factor driving childcare staff toward quitting. "If you have a ratio of one to ten staff to children, and seven or eight of those children have additional needs and you can't get enough support ... that is the thing that makes staff feel unwell," said researcher Karen Thorpe.
Financial Realities Versus Government Funding
The inclusion support program, introduced in 2016, provides $23 per hour for up to 25 hours weekly for additional workers. However, this funding has never been indexed to inflation, while childcare costs have skyrocketed. Goodstart Early Learning, operating 700 centers nationwide, receives $13 million in ISP funding but must contribute an additional $12.3 million to provide adequate care.
"We know that somewhere between 25 and 30% of Australian children are starting school behind, and we know that effectively the school system can't catch them up," warned Goodstart CEO Ros Baxter. "It's seriously the biggest economic crisis that the country could imagine, and it's building."
Systemic Gaps and Government Response
Caroline Croser-Barlow, chief executive of advocacy group The Front Project, highlighted the disparity between childcare and school support systems. While ISP funds reach only 5% of children in childcare, approximately 20% of schoolchildren receive inclusion support. "Services have to wait for a kid to come – then they have to wait for a diagnosis – for the application to be processed ... all of which is very reactive," Croser-Barlow explained.
Minister for Early Childhood Education Jess Walsh defended the government's efforts, noting increased support under the current administration. "The Albanese Labor government has significantly increased support in the ISP since it came to government, with around 26,000 children supported in 2024–25 compared to 15,800 in 2020-21," Walsh stated.
Productivity Commission Recommendations
A 2024 Productivity Commission report on universal childcare recommended immediate increases to inclusion subsidies, while a 2023 Deloitte study commissioned by the government found ISP payments had increased 11% annually since 2016 due to growing demand and disability awareness. The Deloitte report also identified diagnostic requirements as significant barriers excluding many children from support.
As the government advances toward universal childcare, industry figures maintain that fixing the inclusion support program's funding gaps and processing delays must take priority over other structural changes to prevent further exclusion of vulnerable children from early education opportunities.
