BY HEJIRA CONVERY, KINDICARE

JULY 7, 2023

Childcare is a huge family expense, and although most of us will be better off from 10 July, widespread fee increases at services are taking some of the gloss off the government’s Cheaper Child Care plan. 

From next Monday, you may find that your childcare savings are modest, rather than magnificent, once you calculate your out-of-pocket expenses and factor in fee increases. 

In these circumstances, it’s easy to paint childcare providers as price-gouging, Subsidy-slurping, greedy-guts, however, the truth is a bit less dramatic.  

Many providers are simply passing on their costs to consumers, and although it’s annoying that us parents can’t pass our costs to anyone down the chain, analysis by The Parenthood tells us that a fee rise of 7% to 9% is reasonable to cover providers’ increased outgoings, and most of us will still be better of in this case.  

If your fees are going up by more than that, then you need to consider how much value you’re getting out of your service, because although a 12% increase might feel unfair at one place, or untenable for one family, an increase like this might be totally understandable.  

A case in point is Homegrown Learning Studio in Western Australia.  

This family day care is run by Shelby Gillingham, an early childhood educator who worked in long day care for almost a decade, before setting up Homegrown Learning Studio almost two years ago.  

Shelby understands the huge financial pressure that parents are under as fee-payers. 

However, as a small business owner, she also knows how much it costs to provide 10 hours of quality childcare per day – and how prices have risen spectacularly (and not in a good way) over the last 18 months.  

Shelby charges $126 per day before Child Care Subsidy, after recently raising her fees from $110 per day. 

This $16 rise equates to 12%, and although that’s a lot for any customer, Shelby feels this increase struck a fair balance for herself and her families.  

Shelby says, “I would have preferred to raise my fees a little bit more than $16, to take account of my increased costs and large investment in resources and training, but I realised that it was a considerable jump to go from $110 to $126.”  

“I felt I was offering enough quality and value for parents to pay the $126 per day, but gave them an option to continue paying $110, without lunch and some other little things included, or to continue offering all inclusions for $126.” 

As well as giving parents a choice about what they paid, Shelby was also candid about the financial realities of her small business. 

She says, “I assured my families that the fee rise wasn’t coming from a place of greed. It was necessary to increase my fees to keep the family day care running, and I was transparent about where the extra money was going to go.“ 

After talking things through, Shelby’s families all felt that her childcare offering was worth the money and happily agreed to the new fee.  

Rising costs are definitely a reality for childcare providers, and Shelby has seen big changes in a short time.  

She says, “Over the last 18 months, I have seen things become noticeably more expensive and many costs have doubled.” 

Food is one of the most obvious of these, with Shelby paying around $200 per week for children’s food back in mid-2021, and the weekly shop now sitting around $400.  

The ongoing maintenance costs to remain safety compliant as a family day care have also risen acutely, along with her insurance premiums, utility bills, leasing costs, the price of resources, and even the cost of posting these resources out.  

These kinds of sky-rocketing costs are contributing to fee rises around the nation, but even so, childcare can be pretty good value for money. 

Obviously, this depends on your personal circumstances, including your choice of service and how much childcare you need, but at Homegrown Learning Studio and other modestly-priced services with committed educators, your cost-per-hour delivers a lot of bang for buck.  

Shelby is usually open 10 hours a day, which puts her hourly rate at $12.60 per child before Subsidy, and says, “I find that when you break down cost per hour, that really puts into perspective what value you get, compared to paying perhaps $30 to $35 per hour for a nanny.” 

“With approved childcare you are getting purpose-built premises, qualified education and care, and an assurance that your child will be safe for all the hours they are in childcare.”  

“I provide three meals a day, and as many snacks as the children want, plus things like hats and wipes, art and craft supplies, toys and books, incursions dotted throughout the year, and all excursions.”  

With an educator like Shelby, you are also getting years of experience and really individualised care for your child.  

Shelby says, “I think of my family day care as a boutique service, because I have a smaller ratio. I typically care for four children per day, in a home-away-from-home environment, and the bonds I form with them are so close.” 

This level of care brings priceless benefits for children’s learning and development, and as a small business owner, Shelby has put a lot of thought, effort and money into her childcare offering. 

She says, “My premises offer an indoor and outdoor space that is 100% dedicated to childcare. I’ve spent close to $50,000 on resources and further training, and am the first person in Western Australia to offer the Curiosity Approach accreditation, so I feel that I give as much as I can for the price I charge and the service I offer.”  

Even at more expensive services, Shelby says parents can get great value, based on what they want and need. 

After all her years working in early learning, she says, “It’s very apparent that families value different things.” 

Shelby has worked in long day care services that charge between $110 and close to $200 per day for childcare, and says, “I can understand that $200 per day is insane. However, the families enrolled there definitely got more for their money in respect to the physical space, resources and further training that educators were getting.”  

“Some families are in a position where they can and will pay high fees, and I feel that all families need to remember that it does cost to raise someone else’s child in an engaged way.”  

“Childcare is a very expensive business to be in, and small operators are not making the big profits that parents might think they’re making.” 

“At some point, we have to pass on price increases to parents, and although this hurts the family budget, many single-service providers just won’t last if fees remain fixed.”