Hawkesbury City Council has voted to increase rents on community-based early childhood education centres operating from Council-owned buildings, phasing them up to 80 per cent of commercial rates over the next four years.

Under the decision, centres will face a 20 per cent rise this year, with annual increases continuing until they reach the 80 per cent cap. Council stopped short of moving to full commercial rents, but many educators and parents fear the changes could put vital not-for-profit services at risk.

Speakers from the Not-for-Profit Centres also questioned why Hawkesbury was shifting to commercial models when neighbouring councils continued to offer peppercorn rents. They stressed that not-for-profit centres deliver lower fees and higher staffing levels, which is especially relevant for children with additional needs. Greater community involvement allows these centres to leverage volunteer contributions in labour and fund raising involve the service compared with private providers.  It was also noted that Hawkesbury is a so called “childcare desert,” with very few providers and high demand limiting the choices available to working families.

Divided Views Among Councillors

The debate revealed deep divisions on Council.

Cr Kotlash spoke to increasing rent to 100% of commercial rates, arguing it was inequitable to subsidise a small group of children in not-for-profit centres while most families used private providers.

“Out of 2,400 children in care, only 400 attend Council centres. The other 2,000 are equally deserving. Should we be heavily subsidising one group at the expense of the wider community?” she asked.

Cr Zamprogno questioned the financial transparency of centres, claiming some held “handsome sums” in reserve.

Cr McMahon backed the phased approach, saying “we all have to make sacrifices to balance the budget.”

Mayor Les Sheather reflected on the history of Council’s childcare provision since the 1990s but said fairness across the whole community including those without children must now be considered.

Other councillors voiced strong criticism to the imposition of the rent rise.

Cr Wheeler said the policy was effectively “bleeding 80%” out of not-for-profits to feed Council’s general revenue stream, with no guarantee of maintenance of Centre buildings.

She noted that in this same meeting Council approved a $4 million subsidy for sport at Turnbull Oval: “Not every child plays sport, yet we continue those subsidies. Why are we cutting into childcare?”

Cr Mike Creed argued the 80 per cent cap represented “a fair balance” between the needs of families and Council’s obligation to address a $99 million maintenance backlog, the reason given for the need for a rent increase.

Closed Session Sparks Concerns

After hearing submissions from parents and staff, Council moved the debate into a closed session on the grounds of alleged commercial-in-confidence. The move took many by surprise, as not-for-profit early education services do not operate under commercial secrecy. Their independently audited financial statements are published annually in reports to their communities and are readily available to the public.

Critics argued that Council’s application of commercial-in-confidence provisions is about preventing public scrutiny of its own financial modelling of the alleged financial reserves held by the centres. There are concerns that Centres have been denied procedural fairness by not being able to view the modelling of their finances and comment on its validity.

Council business analysis support available to centres not what they want

Cr Kotlash ended the discussion expressing support for the idea that Council may provide centres with business analysis support to adapt to the changes.

Centres stated they would like to have access to the business analysis done by Council that has led Councillors to believe they have the funds to pay commercial rates.

What Happens Next

The decision leaves community childcare centres facing steep rent increases at a time when many are already under pressure. Services warn that higher rents could mean staff cuts, higher parent fees, or even closures—outcomes that would worsen the shortage of affordable early education in the Hawkesbury.

Parents, educators, and councillors who opposed the plan say the fight is not over, with calls for extended transition periods, transparency around Council’s financial modelling, and greater recognition of the role not-for-profits play in supporting local families.

Explainer: The Legal Framework for Closing a Council Meeting

In New South Wales, local councils are governed by the Local Government Act 1993. Normally, council meetings must be open to the public. However, under Section 10A of the Act, councils can pass a resolution to exclude the public if certain types of information are to be discussed. The main categories include:

• Personnel or hardship matters – issues about individual staff, residents, or ratepayers.
• Commercial-in-confidence – information that could:
  • Give a business an unfair advantage in dealings with Council.
  • Prejudice the commercial position of an organisation.
  • Involve confidential information about a company’s financial affairs.
• Legal advice – litigation or matters where disclosure could breach the law.
• Security – information affecting the safety of council staff, councillors, or property.
• Legal advice – litigation or matters where disclosure could breach the law.
• Security – information affecting the safety of council staff, councillors, or property.

Importantly, the council must state the reason for excluding the public and record this in its minutes.

Not-for-Profits and Transparency

The use of “commercial-in-confidence” to exclude the public when discussing not-for-profit childcare centres appears to be outside the Act. Unlike private companies, not-for-profits are required to publish their budgets in annual reports to their communities. This means their financial details are already on the public record. The Office of Local Government have been asked for comment.

The Hawkesbury Gazette will be following this story.