What a potential NSW community preschool funding boost could mean for early learning

The NSW Government has signalled that increased funding for community preschools may be on the horizon, with the Independent Education Union of Australia (IEU) NSW/ACT Branch advising that it has been informed that a funding announcement is likely in the coming weeks.

While a funding uplift was not included in the 2026–27 NSW Budget, the prospect of additional investment has been welcomed by community preschool teachers and educators who have spent more than two years campaigning for improved wages and conditions through the union's Start Strong Pay Fair campaign.

If confirmed, the funding boost could have significant implications for workforce attraction and retention, service sustainability and children's access to quality early learning across New South Wales.

Community preschools do play a vital role in the early childhood education landscape, educating and caring for children in the years before school while supporting families and communities across metropolitan, regional and remote NSW.

More than 700 community preschools operate across the state, many serving communities where access to early learning options may be limited.

Unlike many other parts of the ECEC sector, community preschools often operate on tight margins and rely heavily on government funding and family fees to remain viable.

As a result, workforce costs, funding settings and affordability are closely linked to service sustainability.

One of the strongest arguments for additional funding has been the sector's ongoing struggle to attract and retain qualified teachers and educators.

Community preschool providers have consistently argued that current funding levels make it difficult to offer wages comparable to those available in schools and, in some cases, other parts of the ECEC sector.

This has contributed to workforce shortages and increased competition for qualified early childhood teachers.

A funding uplift could help services:

• improve wages and conditions for teachers and educators
• attract and retain qualified staff
• reduce workforce turnover
• strengthen leadership capacity
• improve continuity of relationships for children and families.

Research consistently shows that stable, qualified and experienced educators are central to quality outcomes for children, making workforce sustainability a critical issue for the sector.

Additional funding could also help strengthen the viability of community preschools, particularly in regional, rural and smaller communities.

For many services, increased workforce costs, rising operational expenses and ongoing financial pressures continue to present significant challenges.

Additional investment may provide greater capacity to:

• maintain staffing levels
• support service sustainability
• avoid significant fee increases
• invest in quality improvement initiatives
• respond to growing community demand.

For communities with limited access to alternative early learning options, the viability of local preschool services remains particularly important.

Equity and access considerations

The discussion around preschool funding is also closely linked to broader conversations about equity and access.

Community preschools support many children and families who may face barriers to participation in early learning, including those living in regional and remote communities, children experiencing vulnerability and families on lower incomes.

Additional funding could help services maintain affordable fees, strengthen inclusion practices and support children who require additional assistance to fully participate in early learning programs.

These priorities align with national discussions about improving equity in early childhood education and ensuring all children have access to high-quality early learning experiences regardless of their circumstances.

A response to Fair Work Commission concerns

The issue has also attracted attention through ongoing Fair Work Commission proceedings.

Earlier this year, the Fair Work Commission recommended that the NSW Government review funding arrangements for community preschools to help support long-awaited wage increases for teachers and educators.

The prospect of additional funding is therefore being viewed by many stakeholders as a potential response to concerns about workforce sustainability and gender-based pay undervaluation within the sector.

According to the IEU, more than 90 per cent of community preschool employees are women, making the issue closely connected to broader discussions about pay equity in female-dominated professions.

Potential impacts beyond community preschools

While any funding uplift would be targeted at community preschools, the effects could extend well beyond the preschool sector.

Improved wages in community preschools may influence workforce movement, recruitment patterns and remuneration expectations across both for-profit and not-for-profit providers.

Long day care services already competing for qualified early childhood teachers could face increased workforce competition if community preschools are able to offer more competitive salaries and conditions.

For some educators, improved pay combined with the appeal of school-term operating models, shorter operating hours and strong community connections may make community preschools an increasingly attractive career option.

The changes could be particularly significant in regional and rural communities where the pool of qualified early childhood teachers is already limited.

The funding announcement may also reignite broader discussions about pay parity across the ECEC sector and whether similar workforce support mechanisms should be considered for long day care services.

Many providers will be watching closely to see whether the proposed funding becomes a model for future workforce investment, particularly as governments continue to implement the Worker Retention Payment and consider longer-term workforce reforms.

What services will be watching

While the prospect of additional funding has been welcomed, providers will be looking closely at the details of any announcement.

Key questions include:

• how funding will be distributed
• whether funding is specifically tied to wages
• implementation timelines
• reporting and accountability requirements
• impacts on existing Start Strong funding arrangements
• whether the funding is ongoing or time-limited.

The answers to these questions will determine how quickly services can respond and what the practical implications will be for educators, families and communities.

What happens next?

The IEU has indicated it will seek further clarification from the NSW Government ahead of the next Fair Work Commission report-back on 29 June.

Should a funding announcement be confirmed, it would represent one of the most significant developments for the NSW community preschool sector in recent years and could play an important role in shaping workforce outcomes, service sustainability and access to early learning across the state.

Importantly, the implications may not stop at community preschools. Depending on the scale and structure of the funding, the announcement could influence workforce planning, remuneration strategies and policy discussions across the broader ECEC sector for years to come.

Read the IEU media release here.