Childcare fees continue to bite families

Latest News | Feb 03, 2017

A new Productivity Commission report on government services finds parents are spending $1 in every $13 of their disposable income on childcare fees.

The Turnbull government is renewing its plans to overhaul childcare subsidies as new data shows parents are paying about $1 from every $13 of their disposable income on fees.

The coalition wants to roll the existing complex system of childcare payments into a single subsidy but it can’t get the Senate to agree to cuts to family tax benefits it wants to use to give parents an extra $3 billion a year relief on fees.

Prime Minister Malcolm Turnbull announced this week he’ll now put the subsidies and cuts into a single piece of legislation in an attempt to win the Senate’s support.

A Productivity Commission report released on Friday shows the commonwealth spent $7.3 billion on childcare in 2014/15.

For the current financial year, the government expects to spend $8.2 billion and it plans for this to jump to $11 billion once the new subsidies start.

The median weekly cost jumped 3.7 per cent for long day care (to $425 for 50 hours) and 9.4 per cent for family day care ($383 for 50 hours) from 2015 to 2016.

Parents were left out of pocket between 4.4 and 7.2 per cent of their weekly disposable income for 30 hours of care, and between 7.4 and 12.1 per cent for 50 hours.

But only about one in 10 children spends 50 hours or more in day care – the average usage is between 28.2 and 29.8 hours.

There are 1.2 million children aged under 12 in some form of child care, which is just under a third of this cohort.

By mid-2016 seven in 10 of the nation’s 17,600 childcare services met or exceeded the national quality standards.

The commission’s figures suggest the investment in early childhood education is paying off, with nearly seven in 10 children on track on school readiness measures – higher than 2012 and significantly up from 2009.

Governments across the country have joined since 2008 to offer 15 hours a week of preschool to four-year-olds.

Friday’s report says 96.5 per cent of these children go to at least one hour of preschool, with the average attendance between 14.1 and 21.6 hours a week.


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