June 30th, 2023

Thrive by Five campaign calls for Federal Government crackdown on greedy childcare providers.


Thrive by Five campaign calls for Federal Government crackdown on greedy childcare providers

30 June 2023 – Minderoo Foundation’s Thrive by Five campaign says there are some privately run early learning and childcare providers who may be using the significant increase in the Child Care Subsidy available from next month to mask unacceptable fee increases beyond their rising costs.

Thrive by Five is providing parents around Australia with key questions to ask their childcare provider in response to potential fee increases to ensure they are fair.

“A small price increase to pay for better early education will benefit children and families and would be offset by an increase in the subsidy, but anything beyond CPI or that doesn’t contribute to better quality is unacceptable,” said Minderoo Foundation’s Jay Weatherill.

“The Federal Government needs to crack down on any bad behaviour from providers.

“Families will be better off financially regardless of increases, but providers who use this nation-building reform to build more profit off the backs of educators and families shouldn’t be given a free pass to price gouge.

“We welcome the Federal Government’s commitment to continue its mission to create a universally accessible, high quality affordable early learning system, but urgent action is required on transparency and accountability for any fee increases.

“We eagerly await the ACCC report which must map forward a funding pathway for governments to create a system that benefits every Australian child,” Mr Weatherill said.

Questions for parents to ask childcare providers in response to fee increases:

• What additional resources or equipment will you be providing for children?
• What additional resources will you be providing for educators?
• What wage increase have you given your early childhood educators?

Key facts about the Child Care Subsidy and potential fee increases:

• On July 10, 2023, the Federal Government’s childcare reforms take effect with the maximum rate of Child Care Subsidy (CCS) increasing from 85 per cent of fee to 90 per cent, with a much more generous income test.
• This will make early childhood education and care (ECEC) more affordable for more than 90 per cent of families.
• Fee increases of around 6-8 per cent by many providers are likely in July. Typically, 60-90 per cent of any fee rise will be covered by the CCS.
• For example, a family on $100,000 currently accessing three days a week, could increase access four days of childcare and still be $15.80 a week better off.
• July is when many ECEC providers increase fees, after factoring in increases in wages, rents and other costs. In the July-Sep. 2022 quarter, average hourly fees rose 6.8% compared to the previous year.
• Since then, CPI has increased to 7.8% in the December quarter, dropping slightly to 6.8% in March. The Fair Work Commission awarded a 5.75% increase in award rates from July 2023, which impacts directly on ECEC as the pay for most of the workforce is aligned with the award.

Families can use the Kindicare free calculator to work out how much better off they will be with the new Child Care Subsidy.