The Albanese government’s $4.7 billion “cheaper childcare” subsidy has all but been eaten up by fee increases, just over a year since it started being rolled out, the latest inflation data shows.

In a development that will bolster arguments against the Productivity Commission’s recommendation to keep increasing subsidies, the inflation data shows out-of-pocket childcare costs fell 13 per cent in the first three months after July 1, 2023, when the extra assistance started.