Out of pocket ECEC costs rise 3.2% in December 2023 as Cheaper Child Care gains eroded

Out of pocket expenses for early childhood education and care (ECEC) services across Australia rose 3.2 per cent in the three months ended December 2023 with notable increases in Darwin and Adelaide recorded amidst an erosion of July’s affordability gains.

The data, released as part of the ABS’s quarterly inflation series, provides insights as to what degree approved providers were prepared to continue with out of cycle fee increases in the wake of affordability improvements driven by Cheaper Child Care measures implemented in early July. 

Net fees fell 13.2 per cent in the September 2023 quarter but bounced back somewhat in the December quarter although the extent of the increase was less than the robust rise of 4.2 per cent recorded in 2022. 

Notably, overall out of pocket expenses are 7.2 per cent lower than the same period last year with all states and territories also retaining significant reductions relative to previous years. 

That being said, approved providers across all of the states and territories elected to raise fees in the December quarter with Darwin and Adelaide the key stand outs with 5.8 per cent and 5.7 per cent increases respectively. 

These are substantial increases especially when one considers the rises passed in the September quarter alongside the affordability measures which were in and of themselves large as well. 

The increases in prices post the implementation of affordability measures is a standard pattern but what has varied over the years is the amount of time it has taken for the savings to be eroded by consequent fee increases. 

If increases in Darwin continue at the pace reported in December then all of the Cheaper Child Care benefits will be eliminated by June of this year with Brisbane, Adelaide, Perth and Canberra eliminating theirs by September. 

Only Sydney and Melbourne appear to be increasing fees at relatively moderate rates at this juncture with their savings lasting until the beginning of next year. 

To review the ABS data series please click here.