ACCC report highlights urgent need for more action to address childcare costs, affordability, and accessibility for all children and families

The Australian Competition and Consumer Commission (ACCC)’s second interim report makes clear more action is needed to address high childcare fees. This is critical as it greatly impacts those children who stand to benefit the most - those experiencing disadvantage.

The ACCC report has found couples with two children under three spend 16% of their household income on day care full-time, which is significantly above other OECD countries at 9%. Australia is ranked 26th out of 32 countries.

Fee increases are more pronounced for households on very low incomes and for those experiencing disadvantage, who may be more likely to cease, or at least reduce, their use of formal childcare in response, according to the report.

The Front Project supports the ACCC’s recommendation that the government further consider and consult on changes to the Child Care Subsidy and existing hourly rate cap mechanism, to simplify their operation and address the impacts on affordability, accessibility and quality.

We also strongly support the report’s recommendation to remove, relax or substantially reconfigure the current activity test, which it identifies as a barrier to more vulnerable children accessing ECEC and its benefits, and for people entering or returning to the workforce.

“The Front Project’s research has repeatedly shown children experiencing disadvantage stand to benefit the most from quality early learning. We welcome the ACCC’s recommendations to remove or relax the activity test and go further to provide accessible services to all children and families,” Jane Hunt, the Front Project’s CEO said.

The report highlighted that those centres that invest in staff with above-award employment have lower staff turnover, staff vacancies, and higher National Quality Standard ratings. It also noted access to quality ECEC is also impeded by significant workforce pressures, with the ACCC identifying less attractive pay, conditions, and other factors leading to burnout and staff turnover. Not-for-profit services were found to be more likely to employ staff above award and full-time than for-profit providers.

“We agree that the workforce must be well-supported because our research shows it has a direct link to quality in early childhood education and positive outcomes for children,” Ms Hunt said.

Another key ACCC recommendation was for the Australian Government to play a stronger role in system stewardship.

“We are pleased by the ACCC’s recommendation for the government to play a stronger role in system stewardship for early childhood education and care, which we have consistently supported in our research. We look forward to the ACCC’s final report,” Ms Hunt said.