Some childcare centre operators have resorted to giving away free iPads or offering to pay a family's grocery bills for a week as enticements to bring in new customers as they battle against an oversupply of childcare places following a rapid acceleration in new entrants into the sector chasing a slice of the taxpayer subsidies expected to reach an annual $9.5 billion by 2022.

Chiang Lim, the chief executive of the Australian Childcare Alliance NSW division, which oversees the interests of 1600 privately owned childcare centres catering for 125,000 families, said there had been no coherent policy across the federal government and state governments to ensure that demand and supply in geographic areas were being matched sensibly in a market where taxpayer subsidies were now running at $7 billion a year and set to rise.