Childcare costs rising three times faster than government rebates

EXCLUSIVE: Childcare costs have risen three times faster than government rebates, forcing more than 110,000 families to pay full fees for part of the year.

Childcare costs rising three times faster than government rebates.

CHILDCARE costs have risen three times faster than government rebates, forcing more than 110,000 families to pay full fees for part of the year.

Federal Education Department data revealed hourly fees for long daycare rose 5.4 per cent in the past year, on average, across Australia.

But the Child Care Benefit (CCB), a means-tested fee subsidy for families, rose just 1.7 per cent while average incomes increased 2 per cent.

The Child Care Rebate (CCR), which refunds families half their out-of-pocket childcare costs after they receive the CCB, has been frozen at $7500 per child for eight years.

Goodstart Early Learning CEO Julia Davison said more than 110,000 families would use their entire $7500 rebate this year. Picture: Jono Searle.

The Turnbull government has promised to spend an extra $3 billion on subsidies in 2018, but only if the Senate approves cuts to Family Tax Benefits (FTB). Labor and the crossbench senators are blocking cuts to FTB.

Goodstart Early Learning, the nation’s biggest childcare provider, warned the cost of daycare was chewing through working families’ pay packets.

Rising childcare fees have wiped out any pay rises over the past three years for a family earning $150,000 a year, with each parent on roughly the average wage and one child in fulltime daycare.

Goodstart chief executive Julia Davison said more than 110,000 families would use their entire $7500 rebate this year: “This will leave many families struggling to pay the full cost of care. That acts as a huge disincentive for many working parents to work more than two or three days a week.”

Ms Davison said the government’s childcare fee reforms would leave a middle income family with a child in fulltime care $97 a week better off but warned the reforms could be delayed unless the legislation was passed: “If not there’s a very high risk families will still be waiting for help at the next election as complex IT systems need to be developed to introduce the single subsidy system.’’

The Parenthood executive director Jo Briskey said many parents worked part time because they could not afford fulltime daycare.

Federal Education Minister Simon Birmingham yesterday said the analysis proved the current system wasn’t working but denied the reforms would be delayed: “The Prime Minister and I have committed to seeing our reforms legislated at the earliest opportunity.’’

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