The Australian Competition and Consumer Commission (ACCC) has released a report stating that market forces and current policies have failed to provide affordable and quality childcare services in Australia. Despite the government’s higher subsidies compared to other OECD countries, childcare in Australia remains less affordable. Education Minister Jason Clare supports the recommendation to name and shame childcare centres that charge exorbitant fees.
The ACCC report also analyzed childcare policies in other countries and found that many governments have reduced service costs by offering subsidies to childcare providers. In comparison, Australia focuses more on financial assistance to families. The report suggests that a combination of different measures and supports may be needed to provide affordable and accessible childcare for families across the country.
Labour costs are identified as the biggest expense for childcare providers, accounting for at least 69% of total costs. The Fair Work Commission recently granted childcare unions the right to negotiate for pay rises of up to 25%. Despite the increase in labour costs, the ACCC found that the sector remains generally profitable, particularly in major cities and advantaged areas. However, profitability can vary depending on occupancy levels, leading providers to compete for households based on quality.
Minister Clare agrees that more needs to be done to reduce costs for parents and guardians. He is open to the recommendation of naming and shaming providers that charge excessively high fees. The government will consider the recommendations made in the report and work towards reforms to ensure affordable and universal access to childcare in the future.