Release type: Media Release

Date:

Report cements Labor’s legacy of skyrocketing child care costs

A new report has cemented Labor’s legacy of skyrocketing child care costs and highlights a growing trend of parents looking for more flexible options, Assistant Minister for Education Sussan Ley said today.

The Federal Government’s June Quarter 2013 Child Care and Early Learning in Summary document – officially released tomorrow – will show the number of families using child care has increased 6 per cent to 742,690 since June 2012.

However, Ms Ley said the quarterly update would also confirm long day care (LDC) hourly fees continued to grow an average of about 7 per cent per year under the previous Labor Government.

This takes the total increase in LDC hourly fees since Labor took office in 2007 to 50 per cent*, with the September 2013 quarter (Labor’s final quarter in power) still to come, she said.

The report also finds the average number of hours parents used LDC services did not increase at all during the period.

Ms Ley said this raised concerns about the impact of skyrocketing fees on family budgets and encouraged people to have their say before submissions to the Productivity Commission’s Inquiry into the entire Child Care and Early Learning system closed COB tomorrow (Monday Feb 3).

“Child care now costs the average parent about an extra $70 per week per child than it did before Labor took office - for the exact same number of hours. That’s extremely concerning,” she said.

“Start doing the sums and all of sudden we’re talking about child care costing the average family over $3000 extra per year after just six years of Labor Government.

“It’s tough being a mum and juggling the demands of your job and child care and this amount of money can make all the difference when deciding if you can, ironically, afford to return to work.

“This is despite Australia desperately needing to retain women in the workforce if we’re to drive our economy further and improve the future prosperity of our nation.

“This report hammers home the importance of our decision to task the Productivity Commission to look at how Australia can deliver a more affordable, accessible and flexible child care system.

“It’s also becoming clearer Labor’s adhoc attempts at reform have created a messy concoction of red tape and band-aid solutions that are costing child care services, and ultimately parents, more.

“It’s therefore more important than ever people have their say on the future of child care before it’s too late.”

Service Types

Ms Ley said Long Day Care (LDC)  and Outside Hours School Care (OHSC) remained the most popular types of child care, covering about 95 per cent of the sector.

However, the report finds the number of new services in Family Day Care (FDC) and Occasional Care (OC) grew 29.3 per cent and 48.8 per cent respectively for the year to June 2013.

This was compared to annual growth of fewer than five per cent for both LDC and OHSC.

Ms Ley said the increase in the number of children attending FDC between June 2012 and 2013 also outstripped LDC by over 4000 enrolments.

The average amount of time children spent in FDC also increased 14 per cent during the same period to 27 hours per week, while LDC did not record an increase at all, flat lining at 27.2 hours per week.

“This is a sign that parents are searching for more flexible alternatives to the traditional 9-to-5 child care model of last century,” Ms Ley said.

The figures are the most up-to-date available from the Department of Education and represent the period between 1 April 2013 and 30 June 2013 – while Labor was still in Government. The report will be available in full on the Department on Education website from tomorrow (Monday Feb 3).

In October last year the Coalition tasked the Productivity Commission to undertake a holistic Inquiry into the Child Care and Early Learning sector looking  at issues affecting affordability, accessibility, flexibility, women’s participation in the workforce, regional and remote communities and vulnerable children.

Submissions to the PC Inquiry close on Monday 3 February. To make a submission, visit: http://www.pc.gov.au/projects/inquiry/childcare.

The final PC Inquiry report is expected October 2014.

Other Key Facts and Figures:

  • 1,057,900 children attended approved childcare services in the 2013 June quarter—an increase of 7.3 per cent since June 2012 and the fourth consecutive quarter where the number has been over one million;
  • 15,717 approved child care services operated in Australia - a 4.6 per cent increase since June 2012;
  • 8,718 outside school hours care services accounted for 55.5 per cent of all services
  • 6,310 long day care services accounted for 40.1 per cent of all services.

*Average Cost of Long Day Care (LDC) Hourly Fees:

  • September Quarter 2007 - $5.00
  • June Quarter 2013 - $7.50
  • = $2.50 average increase per hour in almost six years of Labor (50%)
  • x Average of 27.2 hours children spent in LDC per week = $68 extra per week
  • x 48 weeks per year (giving four weeks grace per year)  = $3264 per year