The cost of childcare to the bulk of NSW families could actually increase after the government's multi-million dollar funding boost to the early childhood sector, industry sources say.
That's because of the $115 million announced by Premier Mike Baird and early childhood minister Leslie Williams on Wednesday, just $30 million is earmarked for long day care centres - where the bulk of NSW children go - and the rest is for preschools, and targeted at disadvantaged children.
The government says the funding boost will cut preschool fees by an average of 30 per cent to $22 a day where children are attending two or more days.
A spokeswoman for Ms Williams said "this will mean more families will be able to make the choice of enrolling their child for two days a week. It is expected that this will mean an extra 15,000 children will benefit from participation for 600 hours in the year before school".
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The announcement follows a highly critical NSW Auditor-General's report in May which found poor targeting of funding to blame for the state's relatively low participation rates in early childhood education, especially among disadvantaged children; and also that the Baird government had withheld $350 million in funds earmarked for the sector over the past five years.
NSW has long been criticised for spending the least per child of any state on early childhood education.
But while welcoming the targeting of the additional funds to disadvantaged kids, long day care providers argue the money overlooks the majority of working families.
The Australian ChildCare Alliance, representing mostly private long day care providers, said there was confusion over the details of the package which will not be released for another month.
Its NSW president Mesha O'Neill said "Any kind of funding that is targeted at getting vulnerable and disadvantaged children in the year before school to access high quality preschool programs is great, because the data shows that giving these kids that access is the difference between them flourishing and struggling in the first year of school.
"It's somewhat surprising that the NSW government continues to give the majority of funds to state based preschools given that more than 70 per cent of children accessed their preschool education through long daycare and that figure is actually growing."
Labor's early childhood spokeswoman Kate Washington said the $115 million represented only one-third of the money that had been budgeted for the sector.
"For the premier to be seeking accolades for passing on just some of the federal funding that's been allocated for this sector is inexcusable," she said.
Ms Williams' spokeswoman said that all the additional federal funding had been "spent on or allocated to a range of early childhood education programs", but did not identify them.
The federal government's child care rebate and benefit is available to families using long day care but not preschool services.
The long day care sector already gets $30 million a year in state funding. The $30 million promised in Wednesday's announcement for 2017 is a confirmation that will continue, but it will now be more narrowly targeted to disadvantaged children.
Industry sources say that will effectively lower the base rate of funding per child to everyone else, and likely increase costs to parents.
However the Community Child Care Cooperative, which represents 80 per cent of NSW's community preschools, welcomed the announcement as one that will make preschool more accessible and affordable.
CEO Diane Lawson said "We have been very loud commentators in expressing our concerns relating to the small investment that we perceive the NSW government have been making in the preschool area. So we are pleased they have listened."
In 2015, only 77 per cent of children in the year before school were enrolled in the minimum 15 hours per week, well short of the government's benchmark of 95 per cent. Ms Lawson said Wednesday's announcement will improve this.
But Warren Bright from Goodstart Early Learning, a large not-for-profit long day care provider that operates nationally, said "we are disappointed that the NSW government has not addressed the serious anomalies in preschool funding that leave most NSW preschool children receiving much less funding than children in Victoria or QLD.
"Enrolments in [long day care] preschool programs over the past four years have increased significantly while enrolments in state and community preschools have fallen as the long day care setting provides more flexibility for working families."