Parents slam childcare provider over ‘astronomical’ fee hikes

Three sentences “hidden” on the last page of a note sent to a Melbourne family last month expose a huge problem facing Aussie parents.

When Melbourne mum Allie Baker read the last page of yet another letter from her sons’ childcare provider last month, it was the last straw.

Buried at the very end of the note and “hidden in fine print” was the news she had been dreading. Fees at her boys’ centre were set to increase — again — to $133 per day for under threes and $130 for over threes from July 1.

Allie Baker received this letter in June. Picture: Supplied

At the time, her sons Charles, 3, and Teddy, 1, attended a Guardian Childcare and Education centre in the Victorian capital.

But while Guardian’s own website clearly states “fees will be increased annually in line with the Consumer Price Index and industry/market standards”, Mrs Baker told news.com.au they had been increasing twice a year since her eldest child first enrolled in October 2016.

At that time, fees were around $110 per day before government rebates, which are calculated based on individual family incomes.

But 2017 brought two separate fee increases, first to $115 per day and then to $118.50 per day.

In 2018, Charles’ fees again increased twice — to $122 and then to $124.

In January this year, fees rose again to $125 for kids aged over three and $127 for those under three.

In late May, her youngest joined his brother at the centre — and had both boys remained there, Mrs Baker and her husband would now be forking out a staggering total of $262 a day before government subsidies.

Instead, they faced “a few sleepless nights” before deciding to move their children to a different centre with lower fees and a maximum of one annual increase of no more than 4 per cent written into its policy.

A screenshot of Guardian's policy clearly shows fees should only be “increased annually". Picture: Supplied

Mrs Baker, a teacher, told news.com.au the frequency of Guardian’s fee increases was unfair on “exhausted” parents.

She said the percentage the rates were increasing by was well out of line with wage growth and inflation, and there was a “lack of transparency” about how the increases were calculated.

Mrs Baker said Guardian had sent letters to parents after the Federal Government’s 2018 childcare subsidy was announced, claiming the new structure would leave many better off — only to hike up fees shortly afterwards, which meant the benefit was effectively “swallowed”, which she described as a “rort”.

“After the Government announced (the subsidy) every centre dramatically increased their fees on the same day — it’s not in any way coincidental, they’re in cahoots … and parents are stuck,” she said.

She also accused the company of announcing fee increases with “confusing” language she claimed was a “deliberate” tactic and said Australia was in urgent need of childcare regulation or an ombudsman to save parents from being “taken advantage of”.

The 36-year-old said she “desperately” wanted an investigation into Australia’s childcare companies and their “unfair, unjustified and astronomical fee structures”.

She said the centre had tried to blame fee hikes on factors such as amenity upgrades, rising educator wages and mandatory fire safety measures, and parents were being forced to foot the bill for these initiatives while Guardian reinvested its profits into new centres.

“In the last month, I too, along with thousands of families across Melbourne, have been stung with further increases,” she said.

“And it’s not just the ‘annual’ increases — although our centre did two annual increases this year — that concern me, it’s the blatant obfuscation from the centre’s management at the highest levels.

“My essential rage after getting these letters is that they are so obviously trying to bamboozle us and slyly tell us they are increasing the rate without directly saying ‘we’ve increased it’.

“It just screams of sneakiness — they’re trying to find a way to justify the increases they plan to make, but the system increases the price by 4 to 5 per cent every six months, and that’s all there is to it.”

Melbourne mum Allie Baker with sons Teddy, 1, and Charles, 3, is calling for a childcare ombudsman. Picture: Supplied

Another parent with two children enrolled at a separate Guardian centre in Melbourne, who spoke with news.com.au anonymously, said they had recently had a meeting with several people high up the company’s ranks to discuss similar fee increases.

The full fee at their centre is now $145.50 per day per child, which has increased from $126 in 2017 to $136 and then $139.

“The last three increases happened within a 12-month period,” the parent explained.

“I was frustrated because the questions I posed to them weren’t specifically answered.

“They kept coming back to the fact that rent is the main cause, which seems to be really handy for them because we don’t have access to the price of commercial rent and how much each centre is paying.”

The parent claimed Guardian employees said increases were calculated based on how much other Guardian centres and competitors were charging.

THE RESPONSE:

A Guardian spokeswoman told news.com.au seven of its 115 centres have had a “mid-year review”, which was “the exception to our policy and due to circumstances at those centres”.

She said all fees were “set individually” and “based on delivering our promise of high-quality care and education to families at those centres”.

“Guardian is a proud operator of high-quality childcare and early education in a sector that has been affected by significant market forces. Our centres, which are in convenient, high-demand locations, have been hit with rental increases, along with industry increases on wages, educator requirements and ratios,” Guardian said in a statement.

“These are all genuine costs, and while we understand no fee increase is desirable, to ensure we deliver on our commitment to high-quality care and education, fee increases are unavoidable.

“We have also been investing in our centres and educator training to promote better learning outcomes. This is reflected in having more than 90 per cent of our centres rated as meeting or exceeding the ACECQA National Quality Standards.”

The statement said Guardian was responsible for more than 15,000 Australian families and 3500 full-time employees across the network.

“We believe our families value the security of knowing the childcare operator they have chosen is a viable and sustainable business and one that leads best practices in education and care. This is our ongoing commitment to our families,” the statement said.

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