Rise in child care prices moderates in Q1 2022 as new CCS affordability adjustments commence

Child care prices rose by the smallest margin since the onset of the COVID-19 pandemic with overall price levels in the first quarter of 2022 the same as those recorded in the last quarter of 2021 as new affordability measures introduced by the Federal Government took hold. 

The ABS CPI data, which is released quarterly, confirmed that price levels across Australia’s eight metropolitan centres came in at an aggregate level of 165.1, the same as the prior quarter, and the first such pause in growth since the onset of the COVID-19 pandemic. 

The new CCS affordability measures, which will see eligible children receive a 30 per cent higher subsidy, up to a maximum of 95 per cent, came into effect on 7 March and will have been captured in the ABS methodology to calculate net out of pocket expenses for families accessing care. 

Notably, the benefits of the measures have been felt unequally across Australia’s main metropolitan cities with Hobart seeing the most benefit, recording a 1.2 per cent fall in prices from December 2021 to March 2022 and Canberra the least benefit with a 2.6 per cent increase. 

Elsewhere Sydney, Brisbane and Adelaide saw small falls of 0.4 per cent, 0.1 per cent and 0.1 per cent respectively. 

Child care prices on an annual basis were up 4.2 per cent in March 2022, lower than the 6.5 per cent increase recorded in December 2021, and at the lower end of the range for price increases historically recorded in the first quarter of the year. 

The reduction in the rate of growth of prices at a gross and net level has been evident in recent months, with Department of Education, Skills and Employment (DESE) data also suggesting a moderation in the rate of fee growth in recent times. 

This latest release of child care prices comes amidst a substantial increase in general price levels across the Australian economy with prices rising 5.1 per cent year on year, driven by higher dwelling construction costs and automotive fuel prices, with the former rising at the fastest pace since September 2000. 

To review the Q1 2022 CPI data please click here.