The model determines that funding will be provided for children in the year before school and three-year-olds that are in the equity category of economically disadvantaged or Aboriginal or Torres Strait Islander. 

Community Child Care Co-operative CEO, Leanne Gibbs said the new funding model means that three-year-old children will not receive subsidised preschool fees unless they fall into ‘equity’ categories. 

“This will put preschool out of reach for many families as we have the highest preschool fees in Australia,” she said.

“We know that children do much better in their lives when they experience at least two years of preschool so why wouldn’t we offer all children a free or close to free early education experience for two years before school.”

Kurri and District Preschool Kindergarten director, Jannelle Gallagher, said that the new reform means community based early childhood education businesses must decide if they will accept non-equity three-year-olds.

“At this point in time, we are only 76 per cent full but, if we enrol a three-year-old who doesn’t come from that equity background, the government will take $4,500 off us from our funding,” she said. 

Ms. Gallagher said the harsh reality of the situation is that traditionally preschools rely on three year olds to fill their rooms but this loss of funding could result in preschools being force to raise fees to remain open.

“The targeted group of children get half their fees paid by the government in essence and then the parents make up the difference,” she said.

“Some families just won’t have the capacity to do that if there isn’t any subsidy so they won’t bring their kids to us.”

The funding reform was announced by the NSW Minister for Education, Adrian Piccoli in response to the recommendations in the 2013 review of state funding for early childhood education by Professor Deborah Brennan. 

The new reforms will be fully active by 2017.