Childcare providers could be named and shamed by the Albanese government if they charge exorbitant fees.
The education minister, Jason Clare, said the Australian Competition and Consumer Commission’s second report on childcare costs in Australia had highlighted the need for drastic reform.
That included potentially taking up the recommendation to name and shame expensive providers, in light of the report finding childcare was “relatively less affordable for households than in most other OECD countries”.
“The idea of naming and shaming providers that are just charging over-the-top fees makes a lot of sense to me,” Clare told Sky News on Sunday.
“I made the point when our cheaper childcare laws came in a couple of months ago that if people were taking advantage of this just to jack up fees out of proportion with what’s happening in the economy, then there should be pressure placed on them.”
In its first report, released in June, the ACCC found childcare fees outpaced inflation over the last five years, with increases of between 20% and 32% between 2018 and 2022.
For a family on average wages with two children in centre-based daycare full-time, the report found that net childcare costs came to 16% of household income, compared with the OECD average of just 9%.
The Albanese government was elected on the promise of cheaper childcare and earlier this year changed the childcare subsidy thresholds with the aim of lowering parents’ and guardians’ out-of-pocket costs. But there were concerns the subsidy led to some centres increasing their fees, meaning some families were paying more than ever.
The ACCC’s most recent report found there would be “substantial benefit” in the government considering “direct price controls” to keep childcare prices down.
Clare said all options were on the table. However, the government is not expected to begin reforming the childcare sector until the second half of 2024 at the earliest, with the Productivity Commission report on the sector not due to be handed down until June next year.
“Step one is the reforms that we implemented in July to make childcare cheaper and that’s pushed the price down by 14%,” he said.
“Step two are some of the reforms that are floated in this report and they’ll give us their final report in December.
“But step three is the big work that’s being done by the Productivity Commission right now on what a universal early education system should look like for the next 10 years and beyond. So this is one piece in an important puzzle that we’re putting together at the moment.”
Jessica Rudd, the acting chief executive of The Parenthood, an advocacy group for families, urged the government to implement the ACCC’s recommendation for price reforms as soon as possible.
“Australian families are grappling with a deep cost-of-living crisis,” she said.
“Early childhood education and care reform not only makes sense for the benefit of children, it’s one of the best ways to boost the economy and productivity while helping families make ends meet.”
