ABS reports childcare price increases for Q4 2019

Childcare prices across Australia rose 7.2 per cent in the three months ended December 2019 compared to the same period last year, and 1.5 per cent compared to the three months ended September 2019 according to the latest Consumer Price Index data released by the Australian Bureau of Statistics. 

 

The data series, released quarterly, aims to capture the net out of pocket expenses incurred by a family using childcare services across the eight state and territory capital cities and by definition uses prices that are calculated after any Child Care Subsidy (CCS) received. 

 

The 7.2 per cent year-on-year increase reported was slightly higher than the 7.0 per cent year-on-year increase recorded in the September quarter and slightly lower than the average of the five years prior to the implementation of the CCS. 

The greatest annual change recorded in the period was in Melbourne, which saw the largest yearly increase in out-of-pocket childcare costs at 11.5 per cent, followed by Canberra at 8.3 per cent, Perth at 6.5 per cent and Brisbane at 6.4 per cent. 

 

The other major cities recorded annual increases of around 5.0 per cent or less for the quarter.  

 

Prices still below, sometimes well below pre-CCS levels, with exception of Brisbane

 

When comparing current prices across Australia to those immediately prior to the CCS implementation, seven of the eight state and territory capitals continue to show cheaper prices.

Canberra prices are 12.0 per cent lower, followed by Melbourne at 9.1 per cent lower and Adelaide at 6.7 per cent. 

 

It is notable that the two cities that are tracking the lowest compared to pre-CCS price levels are the two that have seen the largest recent price increases, perhaps suggesting that operators in these regions are playing catch up compared to other states and territories. 

 

Brisbane is the first city to record prices that are back above pre-CCS levels, albeit by a small margin at 0.3 per cent. 

 

Quarterly price increases appear to be moderating relative to spikes in previous years

 

On a quarter-to-quarter basis prices rose 1.5 per cent in Q4 2019 compared to an increase of 2.5 per cent in Q3 2019. This level of increase is more consistent with that experienced in the periods immediately after the CCS introduction.

That being said, it does appear that the overall cycle of significant quarterly increases in excess of 3.0 per cent per month – which were occurring twice a year from March 2012 to September 2016 – has been broken for the time being. 

 

Please note that the Federal Department of Education also publishes a childcare price series as part of its quarterly update. Unlike the ABS CPI series, the Department of Education series focuses on gross prices charged by services, ie: before CCS application and has suggested more moderate price increases in recent quarters. 

 

A summary of the most recent release, Q3 2019, can be found here. The Q4 2019 Department of Education release is due in the first week of April 2020. 

 

For further detail on the latest ABS Consumer Price series please click here.