Cost of living hits family’s hard as childcare giant G8 hikes fees for third time

The cost of living crisis isn’t going anywhere and some Aussies are being slugged with huge prices rises leaving them in a “difficult financial position”.

One of Australia’s largest childcare providers G8 is hitting parents with its third fee hike – slugging them with up to a 17 per cent increase in prices in just the space of a year – as the cost of living batters families hard.

Gold Coast-based G8, which has 440 centres including chains Casa Bambini and Pelican Childcare, told parents in an email that it would push through a price rise of 6 per cent on average from 30 January to cover higher labour costs and operating expenses such as rent, food, electricity and property maintenance.

Two years ago the ASX-listed company revealed it had underpaid 27,000 workers from 2014 with repayments set to cost as much as $80 million.

One parent from South Australia told the Australian Financial Review that since January last year fees had risen for her three-year-old child from $128 a day to $150, including the latest increase – meaning a 17 per cent hike overall.

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Childcare centres are pushing through multiple hikes to fees in one year. Picture: AndreaObzerova / iStock

G8 had raised its fees in January 2022 before pushing through a surprise increase in June due to an “unexpected surge” in inflation before slugging parents with another increase at the start of this year.

The company earlier revealed its earnings before interest and tax would hit $50 million in the five months to November.

G8’s move comes before the federal government’s changes to make childcare cheaper from July this year.

Childcare subsidy rates are being lifted from 85 per cent to 90 per cent for families earning less than $80,000 and will out taper until it reaches $530,000.

Families will continue to receive existing higher subsidy rates for their second and subsequent children aged five and under in care, up to 95 per cent.

G8’s new CEO Pejman Okhovat’s pay package could potentially be worth $2.6 million. Picture: Nikki Short

However, with reports of a number of childcare centres pushing through multiple increases in the past year – questions are rising on how much relief families will actually be given.

The Parenthood chief executive director Georgie Dent, said childcare affordability was a huge issue for Australian families and it also made returning to work a difficult choice.

“We know that on average last year fees increased by about 8 per cent. We know that the average cost per day is $133 at the moment, but you’ve got suburbs in Brisbane, in Melbourne and Sydney where families are paying close to, if not, over $200 a day and that very quickly adds up to being very unaffordable,” she told radio station 3AW.

“And then the general cost of living pressure that we see means a lot of families are in a very difficult financial position.”

Australia ranks as the second most expensive in the world for childcare. Picture: iStock

Australia ranks as the second most expensive in the world for childcare, according to OECD data released last year.

A couple with children in full time care will spend 60 per cent of average earnings in gross childcare fees, second only to Switzerland.

Ms Dent said with fees so high a “lot” of families have made the decision that it’s not worth it for both parents to work.

The Parenthood chief executive director Georgie Dent. Picture: Supplied

But this has “huge costs” for parents not staying connected to the paid workforce as well as children missing out on the advantages and benefits of quality early learning, she added.

“When you think at the moment of the workforce shortages across the board and then you think about the mums in particular that we know who are here, who are skilled, who are willing and able to work – we need to be making early childhood education and care much more affordable,” she said.

“So that they’re able to make the decision if they want to work three shifts a week or five shifts a week.

“We want them to be able to make that choice because we need nurses, we need teachers, we need that – there’s very few jobs right around the country right now where we don’t need people immediately.”

Originally published as Cost of living hits family’s hard as childcare giant G8 hikes fees for third time