Rising interest rates and childcare costs squeeze household budgets and early learning for children
3 May 2022 – The increase in interest rates to 0.35% announced by the Reserve Bank of Australia today, combined with the rising costs of childcare, will place pressure on family budgets and risk children missing out on early learning, according to the Thrive by Five campaign.The Sydney Morning Herald recently reported parents were hit with a massive 48.7% inflation in childcare costs since December 2022, while overall inflation went up by 17.8%.
Thrive by Five Director Jay Weatherill said, “Rising interest rates announced today will increase the burden on struggling families and leave them facing the impossible choice of whether they can afford investing in early learning for their young children.
“The mounting pressure on families from soaring childcare costs has been hidden in plain sight for too long.
“When I chat with parents, it’s not uncommon for them to speak of childcare costs as being equivalent to a ‘second mortgage’ or how they’ll pay less in fees when their child starts primary school.
“The bottom line is no Australian child should be denied the opportunity of early learning because costs of living are on the rise. No Australian parent should be held back from work because they cannot afford safe and high-quality care for their young child.
“Reducing the cost of high-quality childcare will free up family budgets, help address inflation and support more parents to re-enter or stay in the labour market.
“Thrive by Five urges all parties and independents to commit to universally accessible, high-quality and affordable early learning and care for all,” he said.
Thrive by Five’s eight key recommended early learning policy reforms are:
- Long-term Federal and State partnership to fund 15 hours per week of three year old pre-school;
- Long-term Federal and State partnership to fund 15 hours per week of four year old pre-school;
- Progressive increase in the childcare subsidy for first child to 95 per cent, starting with lifting the current subsidy to 90 per cent;
- Increase in the childcare subsidy for second or third children to 100 per cent;
- Make universal early learning system a formal National Cabinet priority;
- Improved workforce planning to fund appropriate pay and conditions for teachers and educators to end the problem of skill shortages, high vacancy rates and high turnover in the sector;
- Phase-in paid parental leave paid at the minimum wage for up to 12 months shared between parents/carers starting with an immediate move to 26 weeks of paid leave; and
- Universal access to maternal and child health care, with additional home visits for families needing extra support.
This publication is for information only concerning the position of Minderoo Foundation. For more detailed information please visit www.thrivebyfive.org.au