Childcare sector in sights of watchdog

The consumer watchdog will launch a year-long inquiry into the childcare sector amid concerns fees have increased by 41 per cent in the past eight years.

The ACCC will give recommendations to the government on how to ease cost pressures in the childcare sector, paving the way for the next stage of reform.

The consumer watchdog will launch a year-long inquiry into the childcare sector amid concerns fees have increased by 41 per cent in the past eight years.

With the Albanese government to next week introduce its childcare legislation into parliament, the Australian Competition and Consumer Commission (ACCC) will in January begin a probe into the factors behind ­rising costs in the sector.

The ACCC will give recommendations to the government on how to ease cost pressures in the childcare sector, paving the way for the next stage of reform.

Treasurer Jim Chalmers said the inquiry was part of the government’s plan to ease cost-of-living pressures on families.

“It shouldn’t cost parents more than they earn to put their kids through childcare,” Dr Chalmers said. “But for many families, that’s the challenge they face – when it’s sometimes cheaper to stay at home and take care of the kids than it is to go to work.”

Education Minister Jason Clare said parents who wanted to work more hours faced unaffordable childcare.

“Anyone with kids in early education and childcare knows how expensive it is, knows it’s a massive disincentive to work more hours or more days,” Mr Clare said.

“At the moment about 60 per cent of mothers of children under 6, who work, do part-time hours. A lot of Australians would want to work more, but if they did, all of that pay would be gobbled up by the childcare bill. It means it’s not worth it.”

Mr Clare will next week introduce a Bill that will increase childcare subsidies to all families earning up to $530,000.

Under the Bill, from July next year the subsidy will increase for a family with a combined income of up to $75,000 from 83 per cent to 90 per cent.

For families earning $200,000, their subsidy will rise from 50 per cent to 66 per cent. Those earning $400,000 will go from having no taxpayer support for childcare fees to receiving a 27 per cent subsidy.

The $5.4bn policy was Labor’s biggest election commitment.