Childcare hopes dashed by fee hikes

June 25, 2018

Childcare centres across the country have jacked up their fees for the next financial year by as much as 10 per cent, or $12 a day, in a move that will strip away much of the affordability gain under the federal government’s new subsidy.

This was something Conservative Party leader Cory Bernardi warned about in a speech to the Senate more than a year ago when he pointed to the fact that every time the government increases childcare subsidies, childcare providers also jack-up their prices.

The Australian reports, the second largest operator of childcare centres in the country, G8 Education, has issued a blanket fee increase of 5.5 per cent across its 516 centres.

Families using other providers will be slugged with a 4.85 per cent increase from next month, in addition to a 5.25 per cent increase just six months ago.

Other operators have raised fees twice this year, by between 8 and 12 per cent in total.

The new Child Care Subsidy, which begins on July 1, replaces a flat, 50 per cent rebate with annual caps and tapered rebates based on hourly caps, which Education Minister Simon Birmingham said would ease fee pressure.

Families receiving more than $186,959 in household income will also be subject to a cap of $10,190 on total payments.

Childcare prices have risen by more than 80 per cent in a little over a decade and an average in recent years of almost 7 per cent. The largest spike happened in the year to March 2009 when prices soared 14.6 per cent, most of that in the nine months after Labor increased the Child Care Rebate from 30 to 50 per cent of out-of pocket expenses.

To see a clip of Senator Bernardi's 2017 speech to the senate on childcare subsidies, click the box below:

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