Families battling the cost of living are hoping for a break when the federal government's childcare rebate boost kicks in.
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From Monday, families earning less than $530,000 with one or more children under five will receive childcare subsidies of up to 90 per cent depending on income.
However, childcare providers warn increased demand for places will intensify staff shortages in the sector.
"This is only going to put more pressure on centres which are already stretched and struggling to find staff to open their doors for their current intake," according to Richard Bell, whose Little Zak's Academy employs 600 staff at 30 locations across NSW.
"This is undoubtedly the worst I've ever seen it."
Mr Bell said the 12,000 job vacancies in the childcare sector were also expected to grow as new caps on international student work hours came into effect.
"This storm has been brewing for some time as we have more parents needing our services but less staff to be able to look after them," he said.
Little Zak's was among Australia's first childcare providers to offer staff above-award wages, loyalty bonuses, subsidised gym memberships and tertiary study allowances.
"Since we introduced our extensive employee benefits package we've managed to cut our attrition rates in half," Mr Bell said.
"Childcare is such a great industry to work in and it can provide such a rewarding career path."
Yet it appears increasingly difficult to offer such rewards.
An Australian Competition and Consumer Commission investigation found low-income households forked out five to 21 per cent of their disposable income on childcare.
The report also found childcare fees had outpaced inflation.
Assistant minister for education Anthony Chisholm said there were specific challenges in regional and remote communities.
But Senator Chisholm noted the cost of childcare was lower in regional areas than in cities.
"We're very interested in what the final ACCC report will say and the recommendations it will provide," he said.
"We are doing some good things in regional areas in terms of providing funding for some centres, working with councils ... to ensure that there is a service."
Mr Bell noted providers face rising operating costs while trying to recruit and retain staff.
"Electricity bills at centres have doubled, leases are up seven per cent, increased food prices and construction costs are all hitting the industry hard," he said.
"Nobody wants to put fees up and we try to absorb as much of the cost as we can but we also need to make sure we continue to offer quality care to the children who use our services."
The ACCC will publish a consultation paper on the sector in September and report to the treasurer at the end of 2023.
Australian Associated Press
