Hooray for Childcare!

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 01 Jul 2024

On the first anniversary of the federal government’s Cheaper Child Care package, let’s celebrate what’s changed for the better since last July.           

BY HEJIRA CONVERY, KINDICARE

JULY 1, 2024

Today is the first birthday of the federal government’s Cheaper Child Care package, and although us families aren’t celebrating the milestone with smash cakes and party favours, this doesn’t mean the event should go unnoticed!  

Since it came into effect on 1 July 2023, the government’s $4.5 billion Cheaper Child Care package has made a difference to the fees we pay and the care we use.  

Obviously, we’re still hoping for a super cheap childcare solution, and high-quality early learning for all (which the federal government is currently exploring). 

However, let’s take a moment to recognise some of the upsides that have come with the Cheaper Child Care package.

1. Childcare affordability has improved.  

Although some families have saved more than others, the Child Care Subsidy changes introduced last July have had a material effect on out-of-pocket fees; and low to middle income families (on a combined income of $80,000 to $180,000 per annum) have benefitted the most. 

For example, a family on a median income of $128,000, paying an average childcare fee, saw their out-of-pocket costs go down by approximately $15 per day, or 35%, between June 2023 and July 2023.  

Meanwhile, out-of-pocket costs for long day care preschool programs dropped 28.4% between August 2022 and August 2023, to just $23.25 per day, according to the Productivity Commission. 

Of course, any family struggling with cost of living pressures and bumped-up childcare fees will know that the first year of Cheaper Child Care coincided with a very tough economic time. 

Record levels of inflation and workforce pressures did cause higher-than-usual fee increases at lots of childcare services, which eroded the big savings families might otherwise have enjoyed. 

However, out-of-pocket childcare costs have fallen in the last year, and KindiCare’s Founder and CEO, Benjamin Balk says, “Whilst many parents have felt the impact of cost of living increases due to inflation, including for childcare fees, there is no doubt that Labor's Cheaper Child Care plan has made childcare more affordable and accessible for Australian families who would be in a worse position had this critical policy not been implemented last year."  

2. Childcare participation has increased.  

Since the Cheaper Child Care package came into effect, we’ve seen childcare usage rise from 55.3% to 56.1% for children aged zero to four, which is pretty interesting, given that the population of children aged zero to four only went up by 0.2% in 2023. 

It’s also interesting to see that although plenty of childcare centres have had to cap places due to staff shortages, enrolments in childcare have still risen in the last year, and around the nation, we’ve actually seen places in centre-based care increasing by 4.8% (or 30,000 places) in 2023. 

Since the Cheaper Child Care package started, the average number of hours children attend centre-based day care each week has also increased.

The average weekly hours rose from 32.4 hours in September 2022 to 33.5 hours in September 2023, which means children are getting more access to early learning and care in their formative first years, and parents are getting more time to earn and learn.  

3. On this note, workforce participation has increased since Cheaper Child Care came in.  

Many families have been able to take on an extra day of childcare at no extra cost, thanks to the Child Care Subsidy savings that came into effect last July, and it’s been really great to see mothers’ workforce participation on the rise.  

Between December 2022 and December 2023, workforce participation for women with children (aged zero to 15 years) rose from 76.7% to 79.2%, which represented an increase well above the 10 year trend line. 

All in all, the government’s $4.5 billion investment in the Cheaper Child Care package has paid dividends for families, and Australia generally.  

Mr Balk says, "Early learning is an essential service for Australian families, providing both the ability for parents to actively participate in the workforce and study, as well as giving children growth and development opportunities in their critical first five years.”   

We look forward to an early childhood education and care system that is even more affordable, accessible, inclusive and high-quality.

However, one year on from Cheaper Child Care, we celebrate our government’s commitment to childcare families and providers, and their determination to make the system even better for everyone, going forward.

And let’s just say that when super cheap childcare arrives, and there’s a significant pay rise for early childhood educators, we’ll be smashing that cake and celebrating two huge wins for society!