Conservative Party leader Cory Bernardi has been proven right - yet again - in warning last year that throwing more government money into childcare is never going to fix the problem.
The Australian reports, one former childcare executive has told the paper, “Well, the maths is pretty simple. If you put more money, billions more, on the table, providers are going to look at that and say, ‘Well, that’s more money that can come to us.’ So we are now in the middle of a battle for market share that will only intensify after July 1.”
Annual revenue in the sector is about $12bn and profit has hit $1bn even before the new childcare changes kick in. But even as taxpayer subsidies have increased from $3000 a child per year to $7500 in 2008 and now an uncapped system for families on household incomes below $186,000, affordability for parents has scarcely changed.
Early gains when subsidies are boosted are eaten away within two years. Parents, and taxpayers, are still billed for public holidays, when centres are closed. Education Minister Simon Birmingham wanted to end this fee-for-no-service arrangement but anger from providers proved stronger than the will to change.
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:
To read Rick Morton's full article, click here.
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