As the expense of living severely impacts families, one of Australia's leading daycare providers, G8, is slapping parents with its third fee hike, slapping them with up to a 17% increase in fees in just a year.
G8, a company with 440 centres on the Gold Coast that includes the chains Casa Bambini and Pelican Childcare, informed parents in an email that it would enforce a price increase of 6% on average starting on January 30 in order to cover increased labour costs and operating costs like rent, food, electricity, and property maintenance.
The ASX-listed company announced two years ago that it had underpaid 27,000 employees from 2014, with reparations expected to cost up to $80 million.
According to a parent from South Australia who spoke with the Australian Financial Review, her three-year-old child's daily expenses had increased from $128 to $150 since January of last year, including the most recent increase, for a total increase of 17%.
G8 had raised its fees in January 2022 before pushing through a surprise increase in June due to an “unexpected surge” in inflation before slugging parents with another increase at the start of this year.
The business had disclosed that in the five months leading up to November, its earnings before interest and taxes would total $50 million.
G8’s move comes before the federal government’s changes to make childcare cheaper from July this year.
For families making under $80,000, childcare subsidy rates will increase from 85% to 90% and then begin to decline until they reach $530,000.
For their second and subsequent children who are five years old or younger and are in care, families will continue to receive increased subsidy rates, up to a maximum of 95%.
However, concerns are growing about how much relief families will actually receive in light of news that a number of childcare facilities had pushed through repeated increases in the past year.
According to Georgie Dent, chief executive officer of Parenthood, childcare pricing is a major problem for Australian families and makes the decision to go back to work challenging.
"We are aware that costs generally increased by 8% last year. Although households in some regions of Brisbane, Melbourne, and Sydney are spending close to, if not over $200 per day, she said, "that very rapidly adds up to being quite unaffordable. We know that the average cost per day at the moment is $133.
The general pressure on the cost of living that we observe also puts a lot of families in a precarious financial situation.
According to OECD data published last year, Australia is second in the world for childcare costs.
Second, only to Switzerland, a couple with children in full-time care will spend 60% of their annual income on gross childcare costs.
Due to the exorbitant prices, Ms Dent claimed that "a lot" of families have decided that it is not worthwhile for both parents to work.
However, she continued, this has "enormous consequences" for both children who miss out on the advantages and benefits of high-quality early learning as well as parents who don't stay engaged with the paid professionals.
“When you think at the moment of the workforce shortages across the board and then you think about the mums in particular that we know who is here, who are skilled, who are willing and able to work – we need to be making early childhood education and care much more affordable,” she said.
"In order for them to choose whether they want to work three or five shifts per week.
There aren't many positions in the country right now where we don't need people right now, so we want them to be able to choose because we need nurses, teachers, and other professions.
Cost Of Living Hits Families Hard As Childcare Giant G8 Hikes Fees For Third Time, News.Com.Au