National

Child safety system confronts 'financial catastrophe'

Apr 7, 2026

Child related stock image (file image) — The cost of residential care for each at-risk child in Queensland's system is $500,000 annually. -AAP Image

A state residential care system for at-risk children has lurched into a "financial catastrophe" as costs balloon past $1 billion a year.

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An inquiry into Queensland's child safety system - the third of its kind since 2003 - is looking at possible fixes to improve outcomes for children, carers and families.

Its final block of hearings began on Tuesday after the state family and child agency warned too many children were in residential care, with the Queensland government failing to reduce numbers and lift standards.

In his opening address, counsel assisting Tom Diaz told the inquiry that 2388 children remained in residential care, which is reserved for those unsuitable for home-based care.

By comparison, 2767 children were in residential care across the rest of Australia, making Queensland an "outlier and alarmingly so".

"The numbers are important because they contextualise the extraordinary growth in and reliance upon the now $1 billion residential care sector," Mr Diaz said.

"And though there are many figures that highlight the financial catastrophe that residential care has become, the problem extends beyond the numbers.

"The over-reliance on residential care has diluted the design intent of this placement type and contributed to worse outcomes for the children."

The cost of residential care in Queensland had surged to $500,000 per child annually, with $500 million in state funds funnelled to 125 unlicensed providers last financial year.

Some 750 children were being cared for by such providers, with limited oversight by government officials, Mr Diaz said.

"Of those unlicensed providers at least 20 received more than $5 million per year in funding and one unlicensed provider received more than $30 million in funding," he added.

There were just 38 licensed providers statewide, the inquiry was told.

The commission is expected to hear from consulting firm KPMG, which has been asked to analyse the drivers of skyrocketing system demand.

Several senior government officials are also due to give evidence this week.

Commissioner Paul Anastassiou has flagged the two-week hearing block will focus on ballooning costs and greater use of unlicensed providers threatening the system's viability.

In February, hearings in Toowoomba focused on the link between out-of-home care and the youth justice system, with harrowing claims of emotional and physical abuse in state care.

The inquiry is due to make recommendations to the Crisafulli government by May.