Daycare costs soar at double inflation rate

Childcare costs soared by a ‘catastrophic’ 6.5 per cent last year as staff shortages and high rents drove fees twice as fast as inflation.

Childcare costs jumped 6.5pc in 2021. Picture: istock

Childcare costs soared by a “catastrophic” 6.5 per cent last year as staff shortages and high rents drove fees twice as fast as inflation.

Ahead of the Morrison Government’s election-year boost to childcare subsidies, fresh Australian Bureau of Statistics inflation data reveals that families’ childcare costs jumped at least 8 per cent in Sydney, Canberra and Perth during 2021.

In Brisbane, costs rose by the national average of 6.5 per cent, while in Melbourne, where families had fees fully subsidised during lockdowns, costs rose 3.3 per cent.

The Parenthood, an advocacy group for families, warned the “catastrophic” price rises did not include fee increases imposed for the start of 2022.

“Out of pocket child care costs have risen 6.5 per cent over the past year, locking families in a vice of ever-increasing fees that strain household budgets and act as a brake on workforce participation by parents,’’ executive director Georgie Dent said. “Given Australian parents already pay some of the highest fees in the world, this jump is catastrophic.’’

The Parenthood executive director Georgie Dent describes the cost increases as ‘catastrophic’ for working families.

Ms Dent said a family earning $120,000 a year, using daycare costing $115 a day, would have paid $616 extra in out-of-pocket costs last year.

On March 7, the government will make childcare cheaper for 250,000 families by axing the $10,000 cap on childcare rebates, and increasing subsidies for families with more than one child in daycare. But the higher subsidies are likely to be eroded by spiralling daycare fees during the Covid-19 pandemic.

Centres must comply with mandated staffing ratios, so their income is reduced when staff shortages force them to reduce the number of children in paid care. This often results in fee increases for children already enrolled, as centres try to cover the cost of staffing, Covid-19 compliance and escalating rents.

National Skills Commission data reveals that centres advertised jobs for a record 5671 childcare workers last month – more than double the number of vacancies before the start of the pandemic, in February 2020.

Centres tried to recruit 1727 early childhood teachers with four-year university degrees, 3675 educators with diplomas or six-month Certificate III qualifications, and 287 centre directors.

Omicron outbreaks or other health hazards have forced the temporary closure of 230 centres across Australia this week, with 110 in NSW, 54 in Victoria, 32 in South Australia, 19 in the ACT, 11 in Queensland, two in Tasmania, and one each in the Northern Territory and Western Australia.

Early Learning and Care Council of Australia chief executive Elizabeth Death, representing 2300 childcare centres, said Omicron outbreaks and staff shortages had forced the closure of one in 12 this month.

“If we can’t get enough staff to run the services, we can’t educate and care for other people’s children and they won’t be able to attend work,’’ she said.

Children having some outdoor fun with a childcare educator at a Goodstart Early Learning Centre.

Goodstart, the nation’s biggest childcare chain, said hundreds of staff were isolating due to Omicron outbreaks.

“We’ve had more centres and rooms closed in the first three weeks of January than we had in the previous six months,’’ head of advocacy John Cherry said.

“We have centres all over Australia that can’t take bookings because they haven’t got enough staff, so lots of families are languishing on waiting lists.’’