ABS reports 4.6% fall in net childcare costs as CCS affordability changes trump fee increases

Child care prices fell by 4.6 per cent in the three months ended June 2022 across the metropolitan cities of Australia compared to the same period last year as changes to the Child Care Subsidy continued to flow through to improve overall affordability for families. 

 

The data, released by the Australian Bureau of Statistics (ABS) as part of its Quarterly CPI series, showed the first material decline (with the exception of the COVID-19 pandemic) in affordability since the introduction of the CCS in July 2018. 

 

 

The new CCS affordability measures, which were introduced late in March 2022 and include a boost for families with more than one child in care, were the primary driver of the reduction in overall affordability and once fully captured in the ABS’s methodology contributed to the 4.6 per cent decline in net child care costs. 

 

The decrease was all the more notable against a backdrop of significant generalised price increases being experienced across the broader Australian economy which saw an increase in the Consumer Price Index of 6.1 per cent over the twelve months to the June 2022 quarter.

 

 

Although not unprecedented in the early childhood education and care (ECEC) sector, it is relatively unusual to see such divergences with the data confirming the degree of impact that the policy adjustments to the CCS have actually had on overall affordability for families. 

 

The 4.6 per cent reduction in childcare fees in the June 2022 quarter has also served to drag overall prices back down to levels below those registered just prior to the implementation of the CCS in July 2018. 

 

 

As recently as March this year prices had settled at around 4.6 per cent above those from July 2018, signalling that all of the affordability improvements that came with the implementation of the CCS had been erased however as of June 2022 price levels were now back below this threshold by 3.1 per cent with only Brisbane still materially more expensive. 

 

Looking ahead, it is anticipated that significant price increases will be passed by the approved provider community in the September quarter of this year however a series of supportive measures announced by the Labor Government as part of their pre-election promises will serve to cushion the blow of these rises when implemented next year. 

 

To access the ABS data please visit their website.