The ACCC’s interim report from its childcare services inquiry has been released. Photo: File.
Some households are spending more than 20 per cent of their disposable income on child care services, according to the Australian Competition and Consumer Commission’s interim report of its inquiry into child care services.
The report was commissioned by Treasurer Jim Chalmers to enquire into four child care services – centre-based day care, family day care, outside school hours, and in-home care – each of which are eligible for the government’s childcare subsidy.
The inquiry focusses on prices, supply and demand for child care services, and an initial examination of the impact of the subsidies.
The ACCC said the inquiry was informed by an extensive amount of data regarding the costs of providing child care services from large, medium and small providers.
“We are currently collating, checking and analysing this database of child care costs,” the report’s introduction reads. “This is the first time an extensive and detailed set of cost information has been collected for the Australian child care sector.”
The report states that during 2022, it estimates 1.275 million or 70 per cent of children aged five or under, and 655,000 or 25 per cent of children aged from six to 13 attended a child care service. And despite child care places increasing by 17 per cent since 2018, the increase has been inconsistent in its services offered and in geographical regions.
“Centre-based day care and outside school hours care make up 97 per cent of all childcare services,” it states. “The number of these services has increased since 2018, while the numbers of family day care and in-home care services have decreased.
“The decline in family day care and in-home care services is likely to impact households in vulnerable situations and areas disproportionately because they rely more on these care types than other households.”
The report also found that, between 2018 and 2022, child care fees increased across all service types by between 20 and 32 per cent, meaning parents were increasingly considering affordability as the most important consideration when deciding how much child care to use.
In a 5 July release, the Federal Government says this highlights the importance of its Cheaper Child Care reforms which came into effect this month. The Government says the reforms will provide cost-of-living relief for more than a million families.
“Making child care cheaper is one of the best ways we can ease pressure on working families and increase participation in our workforce,” Acting Treasurer Katy Gallagher said in the release.
“Ensuring operators do the right thing and treat families fairly is vital, which is why this inquiry is an important part of our plan to help families cope with rising cost-of-living pressures.”
The report also found the average fee of larger providers was higher compared to small and medium providers; indigenous children were about 10 per cent less likely to be enrolled in child care than non-indigenous; vulnerable households faced more issues in terms of availability, choice and quality of care; and the number of family day care and centre-based day care services charging above the hourly rate cap had almost doubled in the past four years.
“Child care is important, but it’s also expensive,” Minister for Education Jason Clare said. “This report confirms that child care fees have increased faster than inflation from 2018 to 2022. That’s why our Cheaper Child Care package is so important, bringing those costs down.
“But it’s vital families are receiving the full benefit of these changes. The ACCC is watching what’s happening right now to see whether providers across the country are playing by the rules.
“If they don’t, then the ACCC will recommend what actions we need to take to ensure the full benefit of Cheaper Child Care is passed on to families.”
The release states the final report will recommend to Government whether price regulation mechanisms are working, and if more can be done to keep fees in check and costs down.
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