ECEC out of pocket costs fall 13.2 per cent in wake of July 2023 CCS changes

Out of pocket expenses for early childhood education and care (ECEC) services across Australia fell 13.2 per cent in the three months ended September 2023 as changes to the Child Care Subsidy (CCS) implemented in July took effect.

The data, released as part of the ABS’s quarterly inflation series, highlights just how meaningful the Federal Government’s affordability measures have been on the cost of care for families and their children. 

The 13.2 per cent fall in out of pocket costs is the largest reduction, excluding the COVID-19 related free child care policy, since the introduction of the Child Care Rebate in 2008 and also comfortably beat the CCS and multi child rate introductions in 2018 and 2022 respectively. 

When taken from a national perspective, out of pocket expenses are now at levels last seen in the second quarter of 2019, more than four years ago. 

That being said the reduction in out of pocket costs across the eight largest metropolitan areas across Australia measured by the ABS is quite varied, with Sydney at one end only seeing improvements of just over 10 per cent and Adelaide at the other seeing a substantial 18.0 per cent reduction. 

Melbourne also benefited from substantial reductions with a 17.5 per cent fall with other major cities Brisbane and Perth recording falls between 12.5 and 14 per cent. 

On a relative basis across the larger cities in Australia, Melbourne now would be considered the most affordable city from a ECEC net cost perspective, closely followed by Adelaide and then Perth. 

Brisbane and Sydney would be deemed less affordable, a dynamic that is more than evident when viewing their current net price levels compared to those just before the implementation of the CCS in 2018 with prices in Brisbane now just 0.9 per cent lower and Sydney 2.6 per cent lower than those recorded in June 2018. 

Higher than average fee growth in these jurisdictions have amazingly more or less offset the 2018, 2022 and 2023 affordability measures that have been passed whereas on the flip side Melbourne exhibits a very different dynamic. 

To review the Q3 2023 CPI data please click here.