Labor reveals major plan to reform childcare system and improve transparency

Childcare centres will be stopped from charging exorbitant fees under a radical plan, as well as banned from offering “gimmicks”.

Big childcare operators would be forced to reveal their profits under a Labor plan to show parents what their soaring fees are funding.

Providers would also have to disclose real-time data on fees and quality ratings, as well as average year-on-year fee increases, in a bid to improve transparency in the complicated system and help families find the right place to care for their children.

Anthony Albanese will unveil the plan on Thursday, which will also ban providers from offering enrolment inducements such as cash payments and free iPads.

“Parents should have more transparency around what exactly they’re paying for, so they can decide which provider is right for their family,” the Labor leader will say in a major speech.

Labor is calling for greater accountability in the childcare sector.

Labor has already promised to pump an extra $6bn into the childcare system, while tasking the consumer watchdog with investigating price regulation to ensure the benefit of that investment goes into the pockets of families instead of providers.

Last week, the federal government ripped more than 500 providers off its Child Care Finder website because they had not publicly reported their fees — a condition of providing taxpayer-subsidised care.

Fee reporting rates have increased from 50 per cent in 2018 to about 94 per cent.

“Choosing a child care centre is an important decision for parents and we want them to have all the information they need about fees, what is provided for those fees and whether their service is meeting quality standards,” Education Minister Alan Tudge said last week.

Anthony Albanese says parents should have more transparency around what exactly they’re paying for with childcare.

But opposition early childhood education spokeswoman Amanda Rishworth said there was “very little oversight or public reporting” of how $9bn in subsidies was spent by providers each year.

“While not-for-profit providers are already required to report to the National Charities Commission, large for-profit providers, particularly those owned by private equity, do not have the same accountability,” Ms Rishworth said in a statement with Mr Albanese.

Labor criticised the Child Care Finder website and promised to upgrade it to include real-time fee and quality data, plus details of fee increases.

It would also include revenue and profit results from childcare providers which operated more than 25 services and landlords which owned more than 10 centres.

Ms Rishworth and Mr Albanese said “marketing gimmicks” used by childcare operators to attract business were an “an inappropriate use of government support”.

Mr Albanese said Labor’s plan to improve childcare was “the most effective and most obvious step we could take to boost participation in our economy and improve life for families”.

The move comes after an explosive argument in the government’s party room meeting this week in which some MPs drew the ire of their colleagues by reportedly framing childcare as a “women’s issue” and describing it as “outsourcing parenting”.

On Wednesday, Liberal senator Hollie Hughes — who had sarcastically thanked the “boys” for “telling us how best to raise our kids” — declared childcare was “a families issue”.