Frustrated Aussie parent exposes outrageous $29-per-day childcare fee hike

A furious parent has hit out at a popular childcare company after fees were hiked by a staggering amount in just two years.

A furious parent has hit out at a popular childcare company after fees were hiked by a staggering $29 per day in just two years.

The Melbourne parent, who spoke with news.com.au on the condition of anonymity, has a child enrolled at the privately owned Explorers Early Learning centre in Armadale, and accused the company of “price gouging” after being slugged by a series of “significant” fee hikes.

The childcare and education centre company was founded by Lynda Salvo – the daughter of multi-millionaire developer Mario Salvo – in 2014, and has quickly expanded with 18 centres currently located across Melbourne, and three more opening in 2023.

Business appears to have been booming over the years, with the company making several high-profile property acquisitions, including snapping up local landmark Armadale House in Kooyong Rd for a rumoured $14.5 million in 2015.

However, the parent took aim at the company for imposing “significant increases in costs when young families have been especially vulnerable” thanks to tough economic conditions over the past two years.

According to the parent, fees at the Armadale centre for the family rose from $159 per day to $175 per day in July 2022 – only for it to be announced fees would jump again this month, followed by yet another hike to $188 per day in July 2023.

A frustrated parent has hit out at childcare fee hikes amid the cost of living crisis. Picture: Supplied

In a letter sent by the centre to parents explaining the most recent fee increases, Ms Salvo began by talking up the Government’s changes to the Child Care Subsidy “which will increase accessibility to childcare for many families”.

“Commencing 10 July, the maximum amount of CCS is increasing from 85 per cent to 90 per cent for families earning up to $80,000 and the income limit for CCS is increasing to $530,000,” the letter explains, before revealing that fees would also rise.

“High levels of inflation are impacting the cost of living for all Australians and this is impacting our workforce at a time when the early childcare sector is experiencing a shortage of educators, resulting in a highly competitive market for pay rates,” it continues.

“To ensure we continue to operate our centres at a premium quality, we are introducing a new educator pay structure that we believe will help us attract and retain the best educators to care for your child.

“We understand that our families are also affected by cost of living increases, and unlike many of our competitors who introduced a January fee increase this year, we held off doing so.

“To deliver our new pay structure and ensure quality ongoing care and education for your children, we will implement two fee increases, one on 17 April 2023, followed by our normal fee increase in July 2023 which allows for the traditional annual rises to Award increases, rental costs and other operation overheads to run our centres.”

The centre’s current fees are $175 per day for children under three, and $173 per day for those over three.

This week, those costs jumped to $180 per child under three per day, and $178 for over threes.

And from July 10, it will rise once more to $188 per day for all children – but Ms Salvo insisted that based on the company’s own estimates, “most families will be better off per day after these fee increases”.

“We hope you understand that we make these changes for the benefit of the children in our care, our educators and Explorers families,” the letter concludes.

The parent claims the fee hikes effectively swallow the Government’s Child Care Subsidy changes.

But the parent argued that the ongoing fee increases more or less swallowed any benefits provided by the Government changes.

“Very kind of EEL … to essentially take away any savings passed along by the Government in the form of increased rebates whilst estimating that most families are better off,” the parent said.

“What makes this even more frustrating is that places are so limited and competitive – you don’t have much choice as there are no other options for working families.

“EEL definitely understand this and continue to increase prices well above inflation during an extremely difficult time for all young families.”

An Explorers Early Learning spokesman said in a statement provided to news.com.au that the company’s priorities were “the quality of education and the wellbeing of the children under our care”.

“We believe that by supporting our educators, we are directly contributing to a better learning environment,” the spokesman said.

“The early childhood sector is facing an unprecedented shortage of educators, leading to competitors offering significant ‘incentives’ to attract qualified professionals. This creates an imbalance and impacts the quality of care offered to children.

“In response, we have decided to increase the pay rates for all our permanent educators in May 2023 by a minimum of 10 per cent over the current award rates, with additional financial rewards for our most exceptional team members.

“In addition, the business continues to be impacted by other pressures such as power prices (up 17 per cent year on year), food costs (up 10 per cent) and maintenance and related costs.

“Even after the fee increase is applied, we remain competitive within the marketplace.”

Georgie Dent, the executive director of not-for-profit parenting organisation The Parenthood, told news.com.au that Aussie parents had been paying “unbelievably high out-of-pocket costs for early childhood education and care” for many years.

“Unfortunately, the Child Care Subsidy has not kept up with fee increases and it’s incredibly worrying that families are already being warned about fee hikes just as the Albanese Government’s affordability measures come in,” Ms Dent said.

“In the middle of a cost of living crisis, parents simply cannot afford the fees we’re seeing at the moment. The steep cost was problematic before, but in the middle of the current cost of living crisis, it’s increasingly untenable.

“The bind for families is that if they cannot access or afford appropriate care, they can’t go to work and their household income will drop and financial pressure increases.”

Ms Dent added that affordability was a key barrier for families, and that in tens of thousands of cases, high out-of-pocket costs prevent parents and particularly mothers from returning to work, while also stopping children accessing the lifelong benefits that come with high quality, universally accessible early childhood education and care.

“Australia needs a publicly funded early learning system delivered by properly paid educators that will help families, ensuring every child can access the benefits of early learning and that every parent can work as they need to or choose to,” she said.

Originally published as Frustrated Aussie parent exposes outrageous $29-per-day childcare fee hike