Jessica Rudd | Rising childcare fees from cynical providers a step too far

As I commence my role as interim chief executive officer at The Parenthood, it is entirely possible that my generation will be the last generation of Australian parents with limited early learning options that effectively lock too many people (women) out of workforce participation purely because it's more affordable to stay at home full time with young children than return to work.

That only 56 per cent of women aged between 25 and 40 with young children are in any sort of paid work, 61 per cent of whom work part-time, makes little sense in an economy that urgently needs the breadth and depth of skills its domestic workforce possesses.

The good news is policymakers are demonstrating serious intent to fix this problem, starting with the federal government's cheaper childcare which came into effect this week.

This $5.4 billion increase to the Child Care Subsidy will see more than a million families access cheaper education and care for their little ones. For example, families on an income of $120,000 with one child in centre-based care three days per week will save $1700 a year with these reforms.

Thanks to the federal government's investment, more children will have the opportunity to benefit from high-quality early childhood education and care. Furthermore, by reducing the cost of care for families, these changes will free up the equivalent of 44,000 additional full-time workers-mostly mothers-who are already present, experienced, skilled, and eager to work more.

That being said, there's still much to do as the government adjusts the rest of the early learning policy Rubik's cube it inherited.

In an inflationary environment, providers are putting fees up to account for rising input costs, overheads and the lack of skilled educators in the sector. At present, there are about 20,000 centre vacancies Australia-wide, making it nigh on impossible for operators to offer the scale of care required to meet demand.

The Parenthood understands the pressures operators are facing, but we have zero tolerance for the sort of opportunism we're seeing from a number of cynical providers. It is no coincidence that just as the subsidy changes come into effect, parents are being hit with eye-watering fee increase notices in excess of 10 per cent, shoved into their kids' backpack alongside the finger painting and macaroni necklaces.

We appreciate that the cost of macaroni is on the rise, but with the latest CPI data showing inflation fell from 6.8 per cent in April to 5.6 per cent in May, we feel fee hikes over 10 per cent per kid per day are beyond the pale-and so it seems do government and the ACCC.

Last week the consumer watchdog handed down its interim report which found that fees rose between 20 and 32 per cent for families between 2018 and 2022. Its next report will assess input costs and profitability for providers. This report, coupled with the draft report from the Productivity Commission's Inquiry into Early Childhood Education and Care due by the end of November will provide policy makers with the data they need to bring us a step closer to quality universal and affordable providers for our under fives.

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For now though, while most families will be better off with the cheaper childcare fix, other parents are demanding transparency. They want to know what has led to the fee increases which threaten to absorb much of the hard-won benefit that cheaper childcare sought to enable.

With that in mind, The Parenthood has written to the 50 largest providers asking that they detail their fee increases over the past 12 months, wage increases for educators and any explanation they might have for these increases. We look forward to their responses.

After all, if we are to solve this policy puzzle and bring about the sort of visionary nation-building reforms articulated in the lead up to the last federal election, government, industry, businesses large and small-all of us-need to work in concert and take responsibility for holding the baby. It takes a village - ours.