Child care price hikes set to cost families hundreds with increases forecast

Families could be forking out almost $273 a week on average for childcare in Tasmania within four years, based on official price rise projections.

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FAMILIES could be forking out almost $273 a week on average for childcare in Tasmania within four years, based on official price rise projections.

That’s about $40 more per week than families were paying for childcare in 2020.

Fees are expected to rise by 4.9 per cent for long day care this financial year, according to Federal Education Department projections in documents provided to the Senate.

The department predicted childcare prices would rise 3.5 per cent in 2021-22, 4.6 per cent in 2022-23, and 3.2 per cent in 2023-24.

Federal Labor has crunched the numbers for Tasmania, using the projections and the department’s most recent available childcare data, and predicts the cost of an average week of childcare will rise to about $244.15 per week this year.

That’s a 4.9 per cent increase from $232.75 a week families were paying in March 2020, based on the average hourly rate for centre-based care of $9.50 and Tasmanian families using an average of 24.5 hours of childcare a week.

Families could be forking out almost $273 a week on average for childcare in Tasmania within four years, based on official price rise projections. Picture: Supplied

Labor’s analysis estimates the average weekly cost would rise to $252.70 in 2022, $264.32 in 2023, and $272.78 in 2024.

“These projected fee increases are a hammer blow to working family budgets,” Opposition early childhood education spokeswoman Amanda Rishworth said.

“The system is not working.

“The government’s own data proves it.”

She argued Labor’s plan to reform childcare, announced last year, would keep costs down.

The party plans to scrap the $10,560 annual cap on child care payments, lift the maximum subsidy rate from 85 to 90 per cent, and allow families with joint incomes up to $530,000 to receive subsidies.

Education Minister Alan Tudge said parents’ key concern was their out-of-pocket expenses, not the fees charged.

“Our record $10.3 billion investment in child care, including an estimated $9 billion to subsidise fees, means out of pocket costs for parents were 1.8 per cent lower in the December 2020 quarter than their peak in the June quarter 2018,” he said.

Early Childhood Australia chief executive Samantha Page said costs had increased after the COVID-19 fee-free period, but it was difficult to project any further rises.

Ms Page said the current subsidy system was better than the previous model, which drove fees up.

But it could be improved by reviewing the activity test for parents, giving all families some level of subsidised childcare, raising the subsidy rate across the board, and raising the cap, she said.