Childcare Inclusion Support Program Faces Critical Funding Shortfalls
Industry leaders in Australia's childcare sector are raising alarms over the government's inclusion support program (ISP), which is intended to provide additional staff for children with complex needs. They argue that the program is plagued by significant funding gaps and bureaucratic delays, forcing many centres to turn away vulnerable children. Advocates warn that these issues must be addressed before any broader structural changes, such as the move towards a universal childcare system, are implemented.
Funding Falls Short, Centres Bear the Burden
The ISP, introduced in 2016 under the Morrison government, offers funding of $23 per hour for up to 25 hours weekly to support children with disabilities or additional requirements. However, this amount has not been indexed to keep pace with rising childcare costs, leaving centres to cover the shortfall. For instance, Goodstart, a major not-for-profit operator, reported receiving $13 million in ISP funding across its 700 centres but had to contribute an additional $12.3 million to ensure adequate care. With base wages for childcare workers at $39 per hour, the ISP funding covers less than half of the necessary costs, creating financial strain on providers.
Delays and Diagnoses Exacerbate the Crisis
Another critical issue is the requirement for a formal diagnosis before centres can apply for ISP funding, a process that can take between two and five months. During this interim period, children and their families are left without support, leading to situations where centres are compelled to refuse enrolment. Nawaz, a parent from Sydney, shared his experience of his son Zayne being asked to leave two childcare centres due to delays in securing NDIS funding, which operates separately but similarly to the ISP. He recounted, "They said, no, no, no, you have to find another one," highlighting the emotional and logistical challenges faced by families.
Impact on Staff and Long-Term Consequences
The funding shortfalls and delays are not only affecting children but also contributing to staff burnout and high turnover rates. Research by Karen Thorpe from the University of Queensland indicates that inadequate support for children with complex needs is a key factor driving childcare workers to consider quitting. She explained, "If you have a ratio of one to 10, 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." This staffing crisis threatens the quality of care and could have long-term economic implications, as Ros Baxter, CEO of Goodstart, noted that up to 30% of Australian children start school behind, a gap that the education system struggles to close.
Calls for Urgent Reforms
Advocates and industry bodies, including the Australian Childcare Alliance and The Front Project, are urging the government to increase ISP subsidies and streamline application processes. A 2024 Productivity Commission report recommended immediate boosts to inclusion funding, while a 2023 Deloitte study highlighted that ISP payments have risen by 11% annually since 2016 due to growing demand, yet the diagnosis requirement remains a barrier. Caroline Croser-Barlow, CEO of The Front Project, pointed out that while the ISP supports only 5% of children in childcare, schools provide inclusion assistance to 20%, underscoring the disparity in early childhood support.
In response, Minister for Early Childhood Education Jess Walsh stated that the Albanese government has increased ISP support, with approximately 26,000 children aided in 2024–25 compared to 15,800 in 2020-21. However, industry figures emphasize that without fixing the fundamental funding and procedural issues, the program will continue to fail those it aims to help, exacerbating inequalities in Australia's childcare system.
