Out of pocket early learning and care costs have risen 10% in just two years, the latest CPI figures confirm. The annual inflation rate has risen to 3.8 per cent for the year ending in June 2021, with the end of the government’s free childcare policy a key driver of inflation and a hit to household budgets.
Georgie Dent, Executive Director of The Parenthood, said the figures released today show government policies to make early learning and childcare more affordable have fallen short.
“Out of pocket child care costs have risen by 10% as parents are caught in the vice of rising child care fees and inadequate government subsidies that leave Australian families paying more than virtually any industrialized country,” she said.
“Out of pocket early learning and care costs are now 7.6% higher than when the government’s signature child care legislation took effect four years ago, and higher in every state except Victoria.
“Given Australian parents already pay some of the highest fees in the world, it is vital for families and the economy that the Federal government tackles affordability in early learning and care.
“These increases don’t include the fee hikes that some services implemented at the start of the new financial year.
“Recent analysis from the Victoria University’s Mitchell Institute found early learning and care is currently unaffordable for 386,000 Australian families or 39% of families who use early education and care.
“The burden of early learning and care fees force too many working families into terrible choices, including discouraging women from going back to work and removing young children from early learning programs that are crucial for their early development.
“Recent research by The Front Project showed the high fees are even stopping people from having more children. More than half of the 1700 respondents said 'it’s hardly worth working' once the fees are taken into account.
“Australia must urgently invest in universal access to high quality, affordable and accessible early learning and care. We need the early years firmly on the agenda of national cabinet to prioritise reform of the early learning system,” Ms Dent said.
Earlier this year, The Parenthood commissioned Equity Economics to model the impact on Australia’s gross domestic product if early childcare education and care was provided free to Australian children, particularly those aged three to five, and parents were offered up to a year’s support to stay at home to care for their children.
It found national GDP would increase by 4.1% by 2050, or in dollar terms add $166 billion to the economy.
ABS CPI data available here:
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/jun-2021
