Competition commission called in to investigate soaring child care costs

The competition watchdog will probe spiralling prices in the childcare sector as family budgets are slugged with soaring living costs.


Sep 21, 2022, updated Sep 21, 2022
Child care costs are to be investigated by the competition watchdog. Photo: ABC

Child care costs are to be investigated by the competition watchdog. Photo: ABC

The government will put aside almost $11 million in the budget for a 12-month Australian Competition and Consumer Commission inquiry into the sector after childcare costs jumped 41 per cent in eight years.

The investigation, to begin in January, will examine factors driving rising childcare costs and out-of-pocket expenses and recommend ways to ease financial pressures for families.

Treasurer Jim Chalmers said it shouldn’t cost families more than their earnings to put children in childcare, but that was the reality faced by many.

“For many families, the cost of childcare is an incredible burden,” he said in a statement on Wednesday.

“This inquiry is an important part of our plan to help families cope with rising cost-of-living pressures.”

From July 1, Labor will lift the maximum childcare subsidy rate to 90 per cent for the first child in care for families earning less than $530,000.

Education Minister Jason Clare will introduce legislation to parliament next week to implement the changes, expected to cut out-of-pocket costs for 96 per cent of families with children in care.

Asked whether the $5 billion investment itself could drive up prices, Finance Minister Katy Gallagher said it was a “hypothetical situation”.

“I don’t envisage a scenario that says that money isn’t worthwhile – we think it is,” she told the ABC on Wednesday.

But she said it was important to get a greater understanding of the reasons behind price increases in order to make future policy decisions.

The ACTU and Australian Council of Social Service have been arguing for a progressive shift to free universal child care.

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