Childcare fees flat year on year nationally mask city divergences
The Sector > Economics > Affordability & Accessibility > Overall childcare fees flat across Australia in Q1 but big divergences persist between capital cities

Overall childcare fees flat across Australia in Q1 but big divergences persist between capital cities

by Jason Roberts

May 02, 2023
Child and parent hands holding childcare fees

Childcare prices registered no increase in the twelve months to March 2023, a subdued performance that masked significant divergences in fee patterns across the major metropolitan areas across Australia, according to the latest ABS CPI release.


At a national level, the price index closed at 165.1, exactly the same level as twelve months ago, indicating that based on the Australian Bureau of Statistics (ABS) methodology net out of pocket expenses (after subsidy deductions) for families across Australia have not changed.  


Childcare fees in Australia from 2000 to 2023


As we look ahead to July 2023, when an additional, and potentially more impactful raft of CCS affordability changes will be implemented, we can expect that overall net out of pocket expenses will take a sizable step lower, consistent with the four previous subsidy boosts passed in the last two decades. 


Notably, however, since the full resumption of child care subsidy (CCS) post COVID in late 2020, Brisbane prices have climbed the most and are now 7.4 per cent higher than the previous high registered in Q2 2022 even after the CCS affordability measures passed last year. 


Childcare fees across major cities post COVID


On the flip side Melbourne price movements have been relatively constrained compared to other cities with prices up just 1.2 per cent from post COVID and still tracking below the previous high water mark recorded in early 2022. 


It is unclear what is driving these medium term trends but what is clear is that the divergences identified over the last three years are still very much in play currently with Brisbane showing the largest year on year increase and Melbourne the smallest.


Annual childcare fee increases from March 2023


However, when price increases are compared to December last year ie: quarter on quarter Brisbane’s increases are more or less in line with Perth and Canberra, however Adelaide stands out with a net 4.2 per cent increase in the three months ended March 2023. 


Quarterly childcare fee increases in Australian cities


The overall conclusion is certainly that over the medium term price rises have been muted somewhat by CCS affordability improvements but the underlying trend of rising prices remains very much intact. 


Looking ahead to July 2023 there will certainly be another step lower in net out of pocket expenses courtesy of the Cheaper Child Care Bill changes however, if history is anything to go by, particularly in the inflationary environment we found ourselves, price rises from providers will continue at a relatively high clip for the foreseeable future. 


To review the ABS CP data series please click here

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