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ACA Qld investigated the early learning sector within Queensland, analysing the supply (perceived existing oversupply) of early learning centres and the impacts of this oversupply on reported lower occupancy levels. This analysis explored the risks and opportunities associated within the sector.

Over 200 proposed, approved and under-construction projects have been identified across Queensland, with an ultimate capacity of approximately 24,000 additional places. If all of the proposed places proceed, approximately 70% of the projected demand over a 20-year period could be provided within this development pipeline. 

In a typical market scenario, the price of a service such as early learning would respond to both the level of demand and supply and specifically, price would be expected to decrease with additional supply. Early learning in Australia, however, includes a high level 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. In fact, it is a more tenable proposition that a centre which is substantially under-performing due to an oversupply situation would cease operation; removing choice and accessibility for the communities in which they are located and ultimately significant disruption to the educators employed, families and most importantly children enrolled.

Governments should look past the fact that a development fits noise and traffic regulations and see if it fits community need with factual demonstrable population growth modelling on young families who will use these services, and other existing services already in place that will be affected. These are seldom, if ever, considered in an actual DA application.

ACA Qld developed the ‘Early Learning Centre - Insights into Supply & Demand’ using data from CoreLogic / Cordell to show the number of centres currently in the pipeline for Quarter 2 2018 in Brisbane, Gold Coast, Ipswich, North Queensland, Sunshine Coast and Toowoomba.

You can use this valuable resource when you engage your local MP and when talking to the media about this very important issue.

ACA will continue to work with all sides and levels of Government to ensure greater intervention in the planning to ensure services are in areas of need.