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The federal government is considering naming and shaming childcare centres that charge exorbitant fees, after the competition watchdog found Australian families were spending far more on childcare than in most developed countries.
The Australian Competition and Consumer Commission (ACCC) found, in a report released on Sunday, that an average Australian family with two children under three was spending 16 per cent of its net household annual income on centre-based full-time daycare.
Education Minister Jason Clare says he likes the idea of naming and shaming childcare centres that charge over-the-top fees.Credit: Martin Ollman
This compares to an average of nine percent in the Organisation for Economic Co-operation and Development (OECD), putting Australia in 26th place out of 32 surveyed countries in terms of childcare affordability.
The ACCC called for more information to be shared publicly with parents, focusing on childcare providers that are posting large profit margins at the expense of parents and childcare staff.
Education Minister Jason Clare backed the proposal on Sunday, saying: “The idea of naming and shaming providers that are charging over-the-top fees makes a lot of sense to me.”
Clare told Sky News that if childcare providers had taken advantage of recent reforms to “jack up fees out of proportion with what’s happening with the economy, then there should be pressure placed on them”.
The ACCC’s final report on childcare is due to be handed down by the end of the year, and the government will respond to the recommendations next year.
“There’s a lot more work that needs to be done here, and this report zeroes in on what’s the next stage of reform that’s needed,” Clare said.
Clare said the latest interim report showed that the cost of childcare “basically exploded” in the past four years of the Coalition government.
The ACCC findings, which covered the period from 2018 to 2022, did not take into account the government’s cheaper childcare changes, which it says have reduced childcare prices by an average of 14 per cent an hour since they were introduced in July.
The competition watchdog has found that the cost of childcare was less affordable in Australia last year than most other OECD countries. Credit: Kate Geraghty
But the ACCC found that current policies, including the Child Care Subsidy and the hourly rate cap, were failing to drive down costs.
“The operation of the Child Care Subsidy – and its inherent complexity – can make it very difficult for parents and guardians to accurately estimate their subsidy entitlement,” the report found.
“This makes it challenging to accurately compare the out-of-pocket expenses they will face with different services.”
Noting that the Productivity Commission was also examining how to create a universal childcare system, Clare said the ACCC report would be “one piece in an important puzzle that we’re putting together at the moment” on childcare reform.
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