Two Queensland early learning services closing due to oversupply

Two early learning (childcare) services on the Gold Coast alone, are closing due to oversupply and unsustainable occupancy.

This contradicts a recent report that the early childhood education and care sector’s fears of oversupply are unfounded.

“New early learning services currently being built in Queensland’s major cities have generated plenty of vacancies for both newly built and existing services,” said Australian Childcare Alliance Queensland (ACA Qld) General Manager, Brent Stokes.

A study conducted by Urban Economics, commissioned by ACA Qld found that the projected demand of early learning services for the next 20 years will be fulfilled sooner if the current number of proposed, approved and under construction early learning services across Queensland goes ahead in addition to the existing over supply.

“As more new services open, we can sadly expect to see more early learning services closing, creating uncertainty and negative impact on families,” Mr Stokes said.

The report highlighted high levels of fixed costs (predominantly wages). As such, prices are relatively inelastic, and typically do not decrease with increased supply and competition; dispelling the theory that increased supply will simply increase affordability for families.

“There is a minimum rate of occupancy that must be met to ensure the viability of current early learning services in Queensland,” said Mr Stokes.

“We recommend that all parties involved consider the social, economic, community and planning need for new facilities and the potential impacts that additional development may have on the continuity of services in any given locality and the need to accompany any Development Application with an Economic Impact Assessment report.”

“That’s the only way to ensure that existing early learning services remain sustainable and not resort to closing down, affecting the children in their service,” concluded Mr Stokes.

ACA Qld is a not-for-profit, member-funded organisation representing over 700 long day care services employing approximately 10,500 educators, who educate and care for around 145,000 children and over 200,000 parents in Queensland. ACA Qld advocates for the interests of children and families and work on behalf of Approved Providers and operators to ensure that families across Queensland have access to quality, affordable and accessible long day care.

/Public Release.