New data reinforces need for Turnbull Government child care reforms

Child care fees grew at around twice the rate of the economy last year, new data from the Department of Education and Training shows. 

The data highlights child care fees increased by 5 per cent for all service types, including 5.7 per cent for long day care, from the 2015 December quarter through to the 2016 December quarter.

 Minister for Education and Training Simon Birmingham said while the Turnbull Government had taken action to slow child care fee growth, Australian families were still feeling the pinch following ten years of fee growth averaging 6.7 per cent per year and fee spikes as high as 14 per cent per year under Labor.

“We understand the pressures families are feeling so we’re overhauling the child care system to provide better support and investing an extra $2.5 billion,” Minister Birmingham said. 

“We’re abolishing the $7,500 Child Care Rebate cap for families who earn less than $185,000 a year – that’s 85 per cent of families using child care.

“Abolishing the cap will empower parents to make decisions about when or how much to work that best suit their family circumstances and will mean an end to the days when parents face the stress of reaching a funding cliff mid-year when they hit the rebate cap.

“We’re also better targeting subsidy rates to people working more hours and to those earning lower incomes including increasing the subsidy rate from around 72 per cent to 85 per cent for the more than 370,000 families earning less than $65,000 a year.

“Our changes to the rebate cap and subsidy rates are complemented by a range of measures in our reforms that will help families and children. We’re also putting downward pressure on incessant fee increases with an hourly fee cap, we’ll slash red tape so services can be more flexible in the hours they offer, and we’ll deliver stronger compliance powers to ensure taxpayer funds aren’t abused.”

Further information on the new data is available at: www.education.gov.au/decemberquarterdata. An online estimator to assist families work out what the new arrangements mean for them is available at: www.education.gov.au/childcare