Educators sound alarm over preschool funding shock

Forbes Preschool fears it could lose up to half a million dollars a year under the NSW Government's new Universal Preschool Funding Program, with concerns the changes could force services to reduce staffing and cut programs. The NSW Government’s new funding model will replace the existing Start Strong program from next year and is designed to expand access to preschool across NSW, with the government forecasting it could create capacity for more than 10,000 additional children. The reforms include fully funding places for three-year-olds for the first time, increasing funding for children with additional needs and capping community preschool fees at $20 a day. Forbes Preschool director Amy Shine says the changes could hit the service supporting hundreds of local families hard. Using the government's funding calculator, Forbes Preschool estimates it will lose about $200,000 next year under transitional arrangements, before facing a funding shortfall of up to $500,000 in 2027. Her colleagues at community preschools across the region are also facing cuts. "We're all now scrambling thinking, what are we going to do about enrolments and what are we going to do about staffing when they're only committed to funding to ratio," Ms Shine said. "With severe needs of children and additional programs, we can't continue to offer what we offer and deliver a high-quality, child-safe environment." Forbes Preschool, which has 150 children enrolled and employs 25 staff, has expanded beyond a traditional preschool model to become a community hub, offering services including speech and language programs, health and development checks, Aboriginal language programs and NDIS-supported services. The preschool won the national Narragunnawalli Reconciliation Award and works closely with allied health professionals to support vulnerable children and families. "We've really tried to build up our capacity in the community and make it a one-stop hub, but with minimum staffing it's going to be hard to commit to do that and to offer a really high quality,” Ms Shine said. Ms Shine said recent health and development checks highlighted the needs of young children, with the first five children of the morning assessed requiring referrals for further support. "We need to offer additional programs but with minimum staffing we can't offer these additional programs and have a staff member in to support the programs because we won't have the money,” she said. A major concern is the new funding requirement encouraging services to provide 900 hours of preschool education a year to each child, increasing attendance from two days a week to three. Forbes preschool currently has 272 children aged three and four on its waiting list and Ms Shine said the changes would mean some children receive an additional day of preschool each week, while others could miss out altogether. But uncertainty is high as the preschool is still waiting to receive its formal funding allocation for 2027. "We knew Start Strong funding was going to end at the end of this year but we only got the funding guidelines less than two weeks ago and we haven't got our funding for next year," Ms Shine said. "How do you set a budget when you don't know what your income is going to be?" The preschool sector's concerns are reflected in a petition calling on the NSW Government to review the funding model before its full implementation. Petition organisers argue the changes could lead to reduced programs, staffing cuts, fewer support services, shorter operating hours, and potentially the closure of some services, particularly in regional communities. The petition calls on the government to review funding arrangements, undertake meaningful consultation with providers, introduce ongoing protections for services facing significant funding reductions and ensure community-based preschools remain financially viable. In announcing the Universal Preschool Funding Program, the NSW Government said it would increase overall investment in the sector, with total funding for community preschools and inclusion programs rising to between $584 million and $642 million next year. Deputy Premier and Minister for Education and Early Learning Prue Car said the reforms would make preschool more affordable while expanding access for families. "The Minns Labor Government has made affordable, high-quality early learning a priority," Ms Car said. "Through these guidelines, we expect to see up to an additional 10,000 children offered places in our excellent community preschools, while guaranteeing early learning staff the pay rates they have long deserved." Locally, the concern remains that community preschools are being asked to do more with less. "More enrolments and less staff are not the answer to high quality, child-safe community-based preschool," Ms Shine said.