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Strong foundations in early childhood lead to better health, better education and better mental health later in life, NSW Community Services Minister Linda Burney said on Tuesday.
In a statement for International Brain Awareness Week, Ms Burney said parental neglect was expensive in monetary terms as well.
"The (NSW) government strongly believes that investing in our children during their first years of life saves taxpayers money in the long run and brings immeasurable benefits to children's lives," she said.
"That is why the NSW government is investing $260 million into early intervention services ... to support and strengthen families before they reach crisis point and to help reduce the number of children entering the child protection system."
Recent research had shown that "toxic stress" caused by extreme poverty, abuse or chronic neglect, ultimately reduced a child's ability to control their behaviour and emotions, the minister said.
Professor Deborah Phillips, from Georgetown University in Washington DC, had told a seminar in Sydney that for the first time, developmental psychologists, neuroscientists and economists were in agreement about the importance of the early years to children's brain development, Ms Burney said.
"This kind of consensus is rare across different disciplines. But it supports the premise that the costs of intervening early are far, far less than those associated with trying to address problems with brain development down the track," Prof Phillips said.
"Toxic stress ... creates a short fuse for the body's stress response systems ... increasing the risk of physical and mental illness later on," she said.
"Children need love and protection from strong relationships with caring adults."
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