Economic Contexts

Economic hardship for Australian families is characterised by low family income relative to the ongoing cost of living for family members including their children, and is often associated with the family's housing stress, for example if they are living at more than 30% of their family's gross income on housing, and their income poverty, for example if they are living below 50% of the median income of all Australian families (Salvation Army Australia, n.d.). The additional challenge is the need for a single income to make ends meet for single-parent families: recent modelling of families seeking emergency relief showed that 82% of single-parent households and 82% of couple households experienced housing stress (Salvation Army Australia, n.d.). The economic strain of blended families is unique, as they usually have to run two households, pay child support on two children and shoulder the budget of a two-family household.

This relates to early childhood education because Bronfenbrenner's (1979) ecological systems theory sees economic hardship as a disturbance to the microsystems (children's immediate home environment) and mesosystems (the home and early learning service relationships), which can affect a child's opportunities for good nutrition and stable housing, and for enriching experiences. Grace et al. (2022) also note that early childhood educators need to be cognizant of economic disadvantage as a structural problem and not a problem of the individual; to respond to it with dignity, not judgement. New Australian research supports the findings that financial disadvantage and substandard housing has a measurable and adverse effect on child development, and that the effects are lifelong (Bankwest Curtin Economics Centre [BCEC], 2024).

The situation is worsening, and in 2022, 823,000 children (14.5%) were living in poverty, up 102,000 from the year before. Rental stress among low-income families increased from 52% to 57% from 2020–23 (ACOSS & UNSW Sydney, 2025), particularly for single-parent households.

This hardship is structurally inequitable by family type and is getting worse over time, as detailed in the most recent version of the General Social Survey (GSS) released by the Australian Bureau of Statistics (ABS) in May 2026 based on 2025 data. One-parent families were more than double as likely as couple families to not have enough cash on hand for an important need within a week (42% to 23%) and were more likely to experience a cash flow problem, such as not paying their utility bills on time (25% to 11%) or not having enough cash for a meal (14% to 3%) (ABS, 2026). Financial stress has also increased at the national level, rising from 18.7% of all households being unable to raise $2,000 in an emergency in 2020 to 21.7% in 2025 (ABS, 2026), and not showing signs of easing since the pandemic. The hardship has remained persistent over the last three years, and the proportion of adults in Australia who describe their financial situation as 'just getting along' or worse has held steady at 37% in 2022, 41% in both 2023 and 2024, and 40% in 2025 (O'Donnell, Falkiner & Szachna, 2026).

Financial problems create substantial obstacles to the development of children. The lack of finances limits children's access to educational resources such as books, good food, and participation in various activities, causing conflicts within the family; all this prevents the development of language, cognitive skills, and socio-emotional skills of the children. In the case of a single-parent family, the financial problems can push the parent to spend much time working instead of spending this time with the child to create a healthy relationship. A blended family experiences extra pressure associated with paying for both houses, causing conflict between the parents, witnessed by the child.

There have been notable structural developments in the policy framework of the Australian Government's ECEC which focus on affordability and accessibility. The Cheaper Child Care policy of July 2023 increased subsidies to low-income families and expanded the eligibility to include those earning $530,000 annually; this has helped reduce costs for more than one million families (Department of Education, 2024). Accompanied by this is the introduction of the 3 Day Guarantee from January 2026, where the Activity Test will be scrapped to allow single-parent families access to services without any conditions (Department of Education, 2025). Income support through Family Tax Benefit Parts A and B is targeted at single parents and single-income households.

Nevertheless, the current payments still fall far below the poverty line by hundreds of dollars weekly, according to ACOSS and UNSW Sydney (2025). In terms of state policies, the NSW Community Hubs provide an individualised and holistic approach to early years development. These policies have a direct impact on ECEC service delivery and call for flexibility in fee collection systems, as well as financial equity considerations to facilitate access for all families.

Grace et al. (2022) support structural interventions to deal with disadvantage and not deficits, a philosophy that guides the following five strategies. The following five resilience-oriented, evidence-based strategies are intended to support families and children during economically challenging times:

The five major partners who can assist families experiencing economic difficulties work with early childhood services through referrals, in-service information, and co-located outreach, which enables the educators to direct the families towards help while retaining their own emphasis on relationships and learning.

These four resources can provide educators with up-to-date information to identify hardship situations and help families get assistance without discrimination.

Considered together, these storybooks and programs allow educators to teach children that a family's worth has nothing to do with material wealth.