October 28th, 2020

Surge in CPI shows alarming cost of childcare to families.


The consumer price index (CPI) figures for the September quarter, released today, paint a worrying picture for Australian families who currently use, or are planning to use, childcare.

The CPI rose by 1.6 per cent for the quarter, the biggest quarterly spike in 14 years, due mainly to the return of childcare costs. The Federal Government made childcare free for most of the June quarter which led to a drop of 1.9 per cent in CPI, the largest decrease for more than 70 years.

Thrive by Five CEO Jay Weatherill said the numbers would come as a shock to many, but not to families who use childcare and are forced to spend up to 27 per cent of household income on fees.

“While we’re advocating for high quality, universally accessible early learning in Australia, we understand that childcare is the staple currently available, but for too many Australian families it’s unaffordable,” Mr Weatherill said.

“The CPI numbers have shown us that when we talk about childcare fees, we’re not talking about a few dollars per household; we’re talking about enough money to alter the entire country’s cost of living

“Turning on free childcare helped give us the biggest drop in CPI since records began just after World War II. Turning it back off has hit families hard at a time when many people are underemployed or unemployed.

“These numbers should be deeply concerning to the Federal Government which has not yet detailed a plan to address the issue and seems happy for families to keep throwing good money after bad to access an early learning system that doesn’t work.”

Thrive by Five expects the CPI numbers for the final quarter of the year, to be released in January, to continue the trend set by the September quarter as more families return to childcare and find themselves forking out large fees.

On top of the CPI numbers, the Federal Government’s recent Child Care in Australia Report showed that the childcare subsidy is lagging well behind increasing childcare costs, leaving parents and carers paying five per cent more than a year ago.

“The Federal Government’s own figures tell us that the childcare subsidy isn’t covering rising costs and the CPI figures tell us childcare is driving up the cost-of-living. Obviously, this is a serious problem that’s only getting worse.”

The Thrive by Five campaign is advocating for significant reform. While we’re not advocating for free childcare, we believe universally accessible childcare needs to be part of a comprehensive early learning system that supports the development of Australian children to prepare them to excel as soon as they enter primary school.