In Sydney, the out-of-pocket cost of childcare went up 3.9 per cent in the past 12 months and 15.3 per cent since March 2019, while in Melbourne the rise was 2.8 per cent in the past 12 months and 21 per cent over the past three years.
This quarter was an exception, with childcare inflation coming in below the headline figure mainly because of the federal government’s relief package that took effect in March. The new policy targets about 270,000 families who were facing a high fee burden because they had two or more children under the age of six using childcare services.
Griffiths said Labor’s competing proposal matched the Coalition plan, but would help a wider group of families, including those with just one child in care.
She said the Labor policy cost twice as much as the Coalition policy, but the economic benefits would also be greater, delivering a return of roughly $2 for every $1 in spending. Grattan analysis suggests the Labor policy would result in 8 per cent more hours being worked by second earners with young children, equating to 220,000 extra days every week.
Georgina Dent, executive director of advocacy group The Parenthood, said the cost of early childhood education had been a source of great financial pain for households for a long time.
“When you think about the last three years, we’ve seen really limited wage growth, we’re now seeing really significant cost-of-living pressure, and we know that the cost of housing has been huge over the past 12 months in particular,” Dent said.
“Against that backdrop, families having to also grapple with an almost 15 per cent increase in the cost of care is just not sustainable.”
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Dent said investment in early learning was not just about workforce participation but also about education, with increasing evidence showing that the years before a child turns five are even more formative than the years after five.
The McKeown family from Davistown on the Central Coast is one of 730,000 families using early learning services who did not benefit from the government’s fee relief in March because their eldest son is now six and started primary school this year.
Caitlin McKeown, 30, said the family was feeling the pinch to the household budget from rising prices, particularly while she is on parental leave from her freelance marketing job, having given birth to her third son three weeks ago.
McKeown found the cost of food for her family of five and petrol for her husband Joshua, 35, to commute to his construction job in western Sydney were noticeably more expensive. The couple was also worried about rental rises in the area, and would like to eventually buy a home.
The family pays $130 a day before the subsidy to have Xavian, 3, at preschool four days a week. McKeown said the centre had put up prices twice last year alone, and published fees had risen 29.6 per cent rise since the last election.
McKeown said childcare fees accounted for 13 per cent of the family budget now that her eldest son was at school, down from 25 per cent last year when they had two children in care.
“It’s a huge chunk of our wage,” McKeown said. “Last year when I had lulls of work, being a freelancer, we had to pull the boys out of different days of care to meet our budget.”
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