Government Says More Money for Preschools. Local Preschools Say They’ll Get Less

The NSW Government says total funding for community preschools is going up next year. But some local preschools say they will get less.

The new Universal Preschool Funding model starts in January 2027. Lane Cove MP Anthony Roberts says local community preschools face projected losses of between $60,000 and $120,000. Community Early Learning Australia (CELA), the national peak body for not-for-profit community early learning services, says MPs will debate community preschool funding in NSW Parliament today, Wednesday 11 November, from 5pm.

What’s changing

From January 2027 Universal Preschool Funding replaces the Start Strong program for not-for-profit community preschools. The Government says the new model will cover most operating costs so families can access free or low-cost preschool for three and four-year-olds.

Preschools that sign up must meet new wage requirements and fee limits. Funding allocations for 2027 are due in late November.

The funding model follows a NSW Parliamentary Inquiry into Early Childhood Education and Care. Its report, handed down on 20 May, recommended the Government fully fund fair pay for community preschool teachers and educators. The Fair Work Commission made a similar call in February.

The Government’s case

The Government says the new model is fairer and more sustainable. It says more than 700 community preschools will be funded and more than 10,000 extra children could enrol by filling places that already sit empty.

Under the new guidelines:

• Total funding for community preschools rises to between $584 million and $642 million in 2027, up from between $540 million and $625 million in 2026
• Three-year-olds are fully funded for the first time
• Out-of-pocket fees are capped at $20 a day. Fees already above that are frozen
• Teachers and educators are guaranteed pay above award rates
• Up to $91 million goes to children who need extra support
• Preschools that lose funding compared with 2026 get a one-off transition payment
• Families with preschool-aged children in long day care can get up to $2,625 per child in 2027 through a separate Fee Relief for Long Day Care program

Why local preschools are worried

Anthony Roberts met representatives from community preschools across the Lane Cove electorate on Monday 9 November. He says Government funding is being cut while fees are being capped. He says this leaves preschools unable to cover their operating costs.

In a public Facebook post Mr Roberts shared projected figures for local preschools, including:

• Riverside Preschool: a projected $120,000 deficit
• Christ Church Gladesville Preschool: expects to lose $60,000

Mr Roberts’ office told In the Cove the figures were given by the preschools during the meeting.

He says local community preschools are full with long waiting lists. He also raised cuts to inclusion support for children who need extra help. His office says children assessed at Tier 2 under the new Inclusion Funding Program will attract $9.63 an hour, down from $27.57 under the 2026 rate. That is a drop of about 65%. Children assessed at Tier 3 will attract $28.88 an hour.

His office says most children fall into Tier 2. It says the old rate could often pay for an extra staff member in the room. The new loading goes to an educator who may already be responsible for 10 children.

Mr Roberts is calling on the Government to urgently review the guidelines. He made a Private Members’ Statement on the issue in Parliament on Tuesday night. The Government has not yet responded to the local figures.

What the sector says

The Independent Education Union (IEU) says many preschools that ran the Government’s funding estimator are facing cuts. The union also says community preschool teachers remain underpaid. It says an experienced community preschool teacher could earn up to $30,000 a year less than a teacher in a public preschool or primary school.

The IEU says community preschools receive no direct federal funding and rely on the State Government and parent fees. It says more than 80% of their funding goes on wages.

Regional preschools are reporting similar numbers. Narooma Preschool on the South Coast says it will lose $70,000 next year and $170,000 by 2028. That’s 20% of its budget.

CELA, which represents community preschool operators in pay negotiations with unions at the Fair Work Commission, is more measured. It says its advocacy won some improvements in the final guidelines, including temporary transition funding and better staffing allowances. But it says the Government “cannot ask services to do more with less” and wants a guarantee of no cuts.

Concern across parties

In September Greens MLC Abigail Boyd successfully moved a motion in the Legislative Council forcing the Government to hand over documents on the funding model. She described the arrangements as “really funding cuts”. The Liberal Opposition supported the motion. The Government opposed it, saying it contained factual inaccuracies. It pointed out that some community preschools already pay teachers well above the award under the same funding. Read the debate in Hansard.

Nationals MP for Oxley Michael Kemp says regional preschools in his electorate face cuts worth hundreds of thousands of dollars.

Have your say

• Read the 2027 Universal Preschool Funding guidelines on the NSW Department of Education website
• Share your view with Lane Cove MP Anthony Roberts or Education Minister Prue Car
• An official NSW Parliament petition calling for a review is open until Monday 23 November. Sponsored by Independent MP Judy Hannan, it had more than 38,900 signatures as of 11 November, well past the 20,000 needed to trigger a debate in Parliament
• CELA says the debate will be held in the Legislative Assembly on Wednesday 11 November from 5pm. Watch it on the NSW Parliament live webcast. You can also attend in person. CELA advises arriving at the Macquarie Street entrance by 4.40pm to allow time for security

In the Cove invited comment from Education Minister Prue Car, Lane Cove MP Anthony Roberts, Greens MLC Abigail Boyd and Labor’s candidate for Willoughby Michael Quinnell. Mr Roberts’ office has responded and its comments are included above. We will update this story if we hear back from the others.

Do you work at or send your child to a local community preschool? We’d love to hear from you [email protected].