If childcare providers charge outrageous costs, the Albanese administration has the power to publicly name and shame them.
The Australian Competition and Consumer Commission's second study on childcare prices in Australia, according to Education Minister Jason Clare, has brought attention to the need for significant reform.
This would have involved implementing the suggestion to publicly denounce costly providers, given the report's conclusion that childcare costs were "relatively less affordable for households than in most other OECD countries."
I think it makes a lot of sense to identify and shame service providers that are simply charging exorbitant costs, Clare stated to Sky News on Sunday.
"I argued that pressure should be applied to those who were abusing this to inflate fees beyond proportion to the state of the economy when our more affordable childcare laws were implemented a few months ago."
The ACCC discovered in its first report, which was published in June, that childcare costs had increased by 20% to 32% between 2018 and 2022, outpacing inflation over the previous five years.
According to the survey, net childcare costs for a family earning an average salary and enrolling their two children in full-time centre-based daycare accounted for sixteen per cent of household income, whereas the OECD average was just nine per cent.
The Albanese government altered the childcare subsidy thresholds earlier this year in an effort to reduce the out-of-pocket expenses for parents and guardians. The government was elected on a platform of providing more affordable daycare. However, there were worries that the subsidies caused some centres to raise their fees, making some families pay more than before.
In its most recent report, the ACCC said that the government's consideration of "direct price controls" to maintain childcare costs would result in "substantial benefit."
All possibilities were open, according to Clare. But since the Productivity Commission's report on the childcare industry isn't likely to be released until June of next year, it is anticipated that the government won't start overhauling the industry until at least the second half of 2024.
"The first step is the daycare reforms we put in place in July, which lowered the cost by 14%,” he stated.
"Some of the modifications that are suggested in this report are the second step, and they will provide us with their final report in December.
However, the Productivity Commission is currently conducting extensive research on what a universal early education system ought to entail for the next ten years and beyond, which constitutes step three. Thus, this constitutes a single component of a significant jigsaw that we are currently assembling.
The Parenthood's Jessica Rudd, the acting CEO, asked the government to swiftly put the ACCC's proposal for price reforms into effect. The Parenthood is a family advocacy group.
She stated, "There is a severe cost-of-living crisis facing Australian families."
"Reforming early childhood education and care benefits children as well as the economy and is one of the best ways to help families make ends meet while also boosting productivity and the economy."
Reference:
Minister Backs ‘Naming and Shaming’ Childcare Providers Who Charge Exorbitant Fees, The Guardian, 01 October 2023
