Stop childcare centres unfair price gouging! 

Countless working families have been notified of unfair price hikes to their early childhood education centres over the past month, coinciding with the Federal Government’s plan to increase the childcare subsidy (CCS). The increase to CCS is designed to help working families afford care that is not optional for many families, in the context of interest rate hikes and sky-high costs of living.

Australian families have submitted their stories and the state of the industry is shocking. Some centres have hiked fees by $22 per day in one hit to directly coincide with the CCS increase, with some centres charging $200 per day.

Some families have reported 3 price hikes in the one year, and many families have said their centre has completely absorbed the CCS increase so they are no better off.

It is clear that the privatised subsidy model does not work. There is no incentive for private companies to pass on the subsidy rather than opportunistically pocket the assistance designed for working families.

G8 Education who runs 444 centres in Australia posted a Net Profit After Tax of $36.6million in 2022, $80.3million before interest and tax (2022 Annual Report). Their Managing Director/CEO Gary Carroll earned over $2.6 million that year. Non-listed companies make up the majority of centres in Australia and all those contacted refused to share any financial information.

Meanwhile childcare workers are some of the lowest paid workers in the country, with the Award at $29.98 per hour or $57,850 per year. Some centres charge $1,000 a week, or over $50,000 a year. It’s evident that the industry is not passing on profits to their workers.

Access to affordable and accessible early education is a right, and most families do not have a choice but to use these centres.

This is also an issue of women’s equality, as it’s often women who stay home when care is too expensive, and end up with no income, no superannuation, falling behind in their careers, and impoverished if they separate from their partner.  

Most importantly and urgently, we call on the Federal Government to cap the cost of early childhood education and legislate against unfair price gouging in the industry. Limit price increases to once per year, in line with inflation. Ban price increases within 6 months of changes to the CCS. Cap fees to a reasonable amount – no one should be paying over $50,000 a year for childcare so they can attend work.

We call on the Federal Government to make daycare fees tax deductable so that working families directly benefit. This would also increase women’s participation in the workforce. Subsidies are only lining the pockets of for-profit companies and do not work.

We also call on the Minister for Early Childhood Education to commit to establishing an accessible public early childhood education system, much like the system we have for primary and secondary schools. This system was largely dismantled by the previous government, and what small number of not-for-profit or council-run centres remain, the demand is so high they are almost impossible to get into. A thriving public system would increase choice, and therefore competition, and force private companies to be higher quality and more competitively priced – and that is good for everyone. As well as providing genuinely accessible options for families.

An essential service should be affordable and accessible. Private companies should not be opportunistically profiting from struggling working families in an unregulated way.

The shortage of childcare places means that centres can charge exorbitant rates and struggling families have no choice but to pay-up.

The Federal Government’s increase to the CCS is being directly pocketed by companies.

The Labor Government stands for working families and we call upon them to step in and regulate the industry to ensure this essential service is affordable and accessible for all.