Child care fees increase pressure sustains into Q1 2024 with 3.9% rise, says ABS

Out of pocket child care expenses rose 3.9 per cent in the three months to March 2024, a substantial quarterly increase out of step with rises in the same period spanning back seven years. 

 

The data, released as part of the ABS’s Consumer Price Index (CPI) series, highlights that fee increase pressure has continued to flow through the sector as inflation concerns and tailwinds from the Cheaper Childcare Bill changes continue. 

 

The 3.9 per cent rise recorded this year compares to an average of just 1 per cent recorded since the same period in 2017, a period that also includes the implementation of the last major affordability policy change, the introduction of the Child Care Subsidy in 2018.  

 

 

The increases across the states and territories of Australia was, as always, relatively mixed with the largest quarterly gains seen in Canberra (5.9 per cent) and Sydney (4.8 per cent) and the smallest gains recorded in Darwin (0.8 per cent) and Perth (0.7 per cent). 

 

Regardless of the unseasonably large Q1 fee increases, overall price levels are still lower than those recorded last year thanks to the rebasing effect the Child Care Affordability measures passed in July 2023 had on overall out of pocket expenses. 

 

 

Out of pocket expenses across Australia remain on average 5.6 per cent lower than the same period last year, although the savings created courtesy of the Cheaper Child Care Bill are being eroded relatively fast. 

 

The implementation of the measures triggered a 13.2 per cent fall in net fees from the June quarter to the September quarter but since then fees have risen substantially eroding the affordability improvements by around 50 per cent. 

 

 

That being said, net fees across the states and territories are still lower than prior to July 2023 although the range is quite large.

 

Melbourne, which saw the second largest fall remains 11.5 per cent cheaper, followed by Adelaide, which saw the largest fall, now tracking 11.1 per cent lower. Canberra and Sydney have already seen large portions of their savings eroded away. 

 

On this trajectory we would expect net child care costs to have returned to or above pre Cheaper Child Care levels in some jurisdictions by September of this year.

To review the ABS CPI data please click here.