The ACCC has its eyes on rising childcare fees.

The Australian Competition and Consumer Commission (ACCC) has released an interim report that sheds light on the price and availability of childcare services in the country. 

The report, which draws on information from various childcare providers and a national voluntary survey of over 4,000 parents and guardians, reveals the key role childcare plays in Australian society.

“These are complex markets that are highly localised, with most families preferring to find childcare very close to their homes,” ACCC Chair Gina Cass-Gottlieb says.

According to the report, an estimated 1.275 million children aged 5 and under and 655,000 children aged 6-13 attended a childcare service in 2022. 

However, it also shows childcare fees have been rising faster than inflation and wage growth over the past four years. There has been a 20 to 32 per cent increase in fees, depending on the type of care.

Government subsidies have partially offset these rising fees, but the report indicates that out-of-pocket expenses still increased for households, ranging from 7 to 15.8 per cent depending on the type of care. 

Notably, disadvantaged households bear a greater burden, spending a significant share of their disposable income on childcare despite receiving government contributions.

The ACCC's findings also reveal that prices for childcare services in an area tend to rise when there are more childcare providers. 

Furthermore, larger centre-based day care providers charge higher fees compared to medium and small providers, and for-profit centre-based day care providers charge higher fees than not-for-profit providers.

The report shows the major challenges faced by parents and guardians in finding suitable childcare places. 

While there has been an overall increase in approved childcare places, the availability of family day care and in-home care services has declined across the country, affecting culturally and linguistically diverse families and disadvantaged households the most.

Affordability remains a crucial consideration for households when deciding how much formal childcare to use. 

However, once affordability is addressed, factors such as location, availability, safety, and quality become central to the decision-making process.

The ACCC will continue to collect data on the cost of providing childcare services and analyse pricing behaviour to better understand the reasons behind price movements. 

Major changes to the Child Care Subsidy and hourly rate cap are scheduled to take effect on July 10, 2023, which may influence out-of-pocket expenses and fees charged by providers.

A consultation paper will be published in September 2023, followed by a final report to the Treasurer by December 31, 2023. 

The ACCC's inquiry aims to address the inequalities and challenges within the childcare market, ensuring that childcare remains affordable and accessible for all Australian families.