Labor reveals plunge in out-of-pocket costs for childcare
Out-of-pocket costs for childcare have decreased by more than 13 per cent over 12 months to June this year, saving the average family about $800 a year.
Out-of-pocket costs for childcare have decreased by more than 13 per cent over the 12 months to June, saving the average family about $800 a year.
Figures released by the federal government revealed average out-of-pocket costs dropped from $4.22 an hour in the June quarter 2023 to $3.66 an hour in the June quarter 2024.
With the average number of hours accessed by families for centre based daycare sitting at just over 27 hours a week, the decrease in out-of-pocket costs represents a saving of just over $15 a week, or between $700 and $800 over a year.
The data follows the introduction of Labor’s cheaper childcare policy, which came into force in July last year and saw the base subsidy rates increase for all families earning up to $530,000.
Families earning less than the $80,000 income threshold received an increase in the maximum subsidy rate from 85 per cent to 90 per cent, while families earning more than $80,000 received a subsidy that tapered down by 1 per cent for each $5000 earnt over that threshold.
The change means a family earning $120,000, with one child in care three days a week, paid around $2140 less last financial year than they otherwise would have.
Education Minister Jason Clare said Labor was delivering on its promise to make childcare cheaper for Australian families.
“This is good for children, good for families and good for Australia,” he said.
“Reducing out-of-pocket expenses for Australian families is part of our economic plan to cut the cost of childcare and put downward pressure on inflation.”
Early Childhood Education Minister Anne Aly said the decrease in out-of-pocket costs represented real cost-of-living relief for families facing persistently high interest rates and exorbitant grocery bills at major supermarkets, two of which are now facing fines for misleading customers about so-called discounts.
The data follows the release of the Productivity Commission report, which recommended childcare be made totally free for families earning less than $80,000 a year and for the activity test to be abolished.
Among the 56 recommendations in its 941-page report, the Commission said all families with children under five should have access to at least 30 hours, or three days, of care for 48 weeks a year by 2036.
The cost of boosting childcare subsidies to the Productivity Commission’s recommended rate would cost about $17bn a year, and the government has said it would respond to the milestone report “in the next few months”.
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