Canberra has Australia's highest childcare fees - and they are rising

This is despite the COVID-19 related freeze on fees or free childcare period over the first six months of the reporting period in 2020 and comes as the major parties have duelling policies designed to make childcare more affordable.

The latest quarterly childcare report released by the federal education department shows that for the three months, leading up to the end of last December, that ACT families now pay $11.85 per hour on average for centre-based childcare - $1 an hour higher than fees in Victoria ($10.85 per hour) and in NSW ($10.80 per hour).

The figures show ACT families are paying 1.3 per cent higher fees over the previous year. That's lower than the national rise of 2.4 per cent over the same period.

On average, ACT families pay $11.50 an hour for family day care and $9.90 for after school care, all the highest fees for their type of childcare in Australia. This combines to reveal that ACT families pay an average hourly child care fee of $11.55 for all service types.

There are 31,350 children in childcare covered by the federal government's childcare subsidy scheme in the ACT and 280 approved childcare services.

Nationally, during the December quarter 2020, parents who used centre-based day care paid on average $10.50 per hour, while those who used family based day care paid on average $10.70 an hour. The average hourly child care fee for all service types was $10.15, reflecting an increase of 2.4 per cent for national childcare costs since the December quarter 2019.

The figures back data released in February by both the Productivity Commission and the Australian Bureau of Statistics, which also found the cost of childcare in the ACT was the highest in the nation and rising at a faster rate.

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The Productivity Commission's report on government services, released in February, found Canberra was the most-expensive place in the country to send kids to childcare, with a median-weekly cost for a government approved service of $595. That means Canberrans are paying $70 above the national average.

Childcare is subsidised by the government at a rate determined by the income and hours worked by the family. The subsidy has also been linked to the consumer price index since 2018. CPI rose just 0.9 per cent over the same period of December 2019 to December 2020, meaning rising childcare fees are outstripping any increases to the subsidy.

CPI figures released by the Australian Bureau of Statistics show out-of-pocket costs in Canberra rose by 3.8 per cent between December 2019 and December 2020, well over the general inflation rate of 0.9 per cent.

The data on childcare has been affected by COVID-19. The first six months of 2020 was either free child care or frozen fees, so all the increases took place in the last six months of 2020.

The federal government has announced a $1.7 billion childcare package, which would start in the 2022-23 financial year. Under the plan, caps on childcare subsidies for higher-income earners would be removed and the maximum subsidy for families with two or more children aged under five will increase from 85 per cent of the cost of care to 95 per cent.

The government is moving to catch up with Labor's pledge to remove the $10,650 cap on the subsidy for all families and lifting the maximum subsidy to 90 per cent from 85 per cent.

Under the policy proposal the rate of childcare subsidy would increase for all families with incomes under $530,000. Labor wants to ask the Productivity Commission to review of childcare "with the aim of implementing a universal 90 per cent subsidy for all families".

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