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‘Strong rebound’: Childcare costs on the rise again

Ms Wade, who is a director at the centre where William attends as well as teaching yoga at nights and on weekends, describes her son’s daycare days as “hugely important”.

She says it enables her to work and is preparing her son for school with a literacy program, excursions, sensory play and activities such as growing vegetables.

“It’s not really an option I think, for children not to have an early education.”

Nicole Wade says early education is preparing her son for school.

Nicole Wade says early education is preparing her son for school.Credit:Janie Barrett

In July 2018, the Coalition government introduced a new system for funding childcare, which included an extra $2.5 billion over four years in funding, with support targeted towards low and middle income earners.

Education Minister Dan Tehan recently hailed the 12-month anniversary of the program, noting than more than $7.2 billion in subsidies had been paid and costs were down 7.9 per cent since the new system began. But a closer analysis of Australian Bureau of Statistics’ consumer price index shows that after an initial drop in prices, out-of-pocket costs having been rising again.

Australia-wide, there was a dramatic 11.8 per cent drop between the June and September 2018 quarters, covering the introduction of the new system. But over the next nine months to June 2019, there was a 4.4 per cent increase.

The CPI for “all groups” monitored by the ABS increased by 1.1 per cent over the same period. Childcare costs for the corresponding nine-month period in 2017-18 saw a 3.7 per cent increase.

In Sydney, there was an initial drop of 7.6 per cent after the childcare changes were introduced last year, but costs have since climbed two per cent between the September 2018 and June 2019 quarters. In Melbourne, there was an initial drop of 19 per cent, with prices since climbing 7.4 per cent.

“We have started to see a strong rebound in childcare prices again,” Australian National University economic and social researcher Ben Phillips.

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Associate Professor Phillips said it was not known why prices had begun to creep back up, but noted that cost increases were particularly noticeable in some regional areas and in Queensland, where costs had relatively been lower than other parts of the country.

Education specialist and spokesperson for The Parenthood, Megan O’Connell, said the CPI figures could reflect the fact that some centres were charging more to try and take advantage of the extra government funding in the system. She said this could also be due to centres taking on more staff and administrative support to cope with increased demand.

Ms O’Connell also described the rising costs as a concern.

“Only some parents are finding that childcare is more affordable,” she said.

Mr Tehan says the new childcare system is “leaving more dollars in the pockets of Australian families”. According to the Education Minister, 75 per cent of parents pay about $50 a day for daycare, after the childcare subsidy is factored in. Mr Tehan added the government’s childcare subsidy had an hourly fee cap, which helped “place downward pressure on fees”.

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