ABS Child Care CPI data shows dramatic fall in price series

Child care prices across Australia fell 94.7 per cent in the three months ended June 2020 compared to the same period last year, and 95.0 per cent compared to the three months ended March 2020 according to the latest Consumer Price Index data released by the Australian Bureau of Statistics (ABS).

The dramatic fall in prices was a function of the introduction of the ECEC Relief Package on 6 April 2020 in which participation in the scheme was conditional on services offering education and care for free to families and their children for the duration of the policy.

In calculating the child care component the ABS included the 62 of 65 business days over which the policy measure was in place during the three months to June 2020 which explains why the fall in the period was 100 per cent. 

Looking back over the last 20 years it is clear that the introduction of the measure was unprecedented by any measure with similar large adjustments in 2006 and 2007 as well as in 2018 significantly smaller, for understandable reasons, than the current quarter. 

Looking ahead, the cessation of the ECEC Relief Package, and with it free child care, on 13 July 2020 will see an equally large bounce back to prices in the three months ended September 2020.

That being said, any price increases that may have been passed in the September quarter, historically an important period for operators to raise fees, will be halted by an operators receipt of the current Transition Payment support package which prohibits fee increases as a condition of participation. 

To read the ABS’s CPI summary for the June 2020 quarter please click here.