The Education Institute is warning early childhood education services (ECE) are being stretched to breaking point by funding shortfalls.
A new survey of 264 ECE centres suggests seven in 10 are being forced to raise their fees and hire fewer or unqualified teachers to compensate.
Kindergarten head teacher Virginia Oakley said they had had to find ways to cut costs.
"Some services have got rid of qualified teachers, replaced them with unqualified staff that are cheaper to pay for and we've had to cut maintenance for our buildings because of course bulk funding doesn't cover everything."
Ms Oakley said she believed the government was putting having greater numbers of students ahead of the quality of their education.