Economics
Childcare prices rise slower in Q1 2020 but COVID impact unclear
Jason Roberts
Apr 30, 2020
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Childcare prices across Australia rose 6.2 per cent in the three months ended March 2020 compared to the same period last year, and 1.0 per cent compared to the three months ended December 2019 according to the latest Consumer Price Index data released by the Australian Bureau of Statistics.
The 6.2 per cent year-on-year increase reported was lower than the 7.2 per cent year-on-year increase recorded in the December quarter and towards the lower end of growth levels recorded in the five years prior to the implementation of the CCS.That being said, the onset of COVID-19, and to some degree the bushfires, may have impacted decision making on fees in the last quarter and led to a more muted increase outcome.
Across the major cities growth rates in Melbourne and Canberra continued to be elevated at 9.0 per cnet and 7.1 per cent respectively.
Adelaide's growth was lowest at 4.8 per cent with the other major cities recording increases in between 4.8 per cent and 6.0 per cent.
Quarterly prices increases remain anchored with 1.0% rise from Dec 19 to March 20Prices rose 1.0 per cent on average across Australia in the three months ended March 2020 compared to the three months ended December 2019, a level that is towards the lower end of the post CCS implementation range.
The largest quarterly increase amongst the major cities was Canberra, up 2.4 per cent, followed by Melbourne, up 1.5 per cent.
With regards to Melbourne the Q1 2020 increases were materially lower than previous Q1 performances with Q1 2019 seeing a 3.8 per cent rise, Q1 2018 seeing a 2.9 per cent rise and Q1 2017 seeing a 2.5 per cent rise.
Melbourne has been a strong driver of Australian price increases for a number of years, and this recent performance may have indicated that the push for higher prices across the state has run its course.
Brisbane prices creep further above pre CCS levels, but others cities remain below
From the perspective of price rises since the introduction of the CCS system, Brisbane remains the only city where prices have exceeded those recorded prior to the CCS, with March 2020 increases adding to those experienced in the December quarter.
Brisbane prices were recorded as 1.0 per cent above pre CCS levels in the March quarter.
Elsewhere, Canberra prices were 9.9 per cent lower, followed by Melbourne at 7.8 per cent and Adelaide at 6.1 per cent.
Looking ahead the Q2 2020 release will be highly unusual, given the roll out of the ECEC Relief Package and the introduction of a zero fee environment.
For further detail on the latest ABS Consumer Price series please click here.
Editor’s note: 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.
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