Kindys eat up parent savings

GREEDY child care centres have gobbled up almost half the money parents were meant to save from new subsidies by hiking up their fees.

When a new subsidy system came into place from July 2 last year it was meant to save the average family $1300 in child care fees a year.

But new data shows that in the year leading up to the subsidy’s introduction the average parent with a child in 48 weeks of the year is paying $622 more than they were 12 months ago.

Of this $276.50 of that came from cost increases between July and September 2018 – after the subsidy was introduced.

Labor’s childcare spokeswoman Amanda Rishworth said the Government should be “naming and shaming” centres who hiked fees to take advantage of the subsidies.

But Education Minister Dan Tehan said out-of-pocket costs for child care had still fallen almost 9 per cent, and urged those getting a raw deal to “vote with their feet and find a new service”.

Recently released Education Department data recording costs in September 2018, the first released since the subsidies came into place, revealed the increased costs.

It showed the average family, which pays for 28.8 hours a week, saw their fees increase by $13 a week between September 2017 and September 2018, including a $5.80 a week increase in the quarter the subsidies were introduced.

Australian Childcare Alliance vice president Nesha Hutchinson said costs went up in July as the award wage for child care workers increased by more than 3 per cent.

“I don’t know of any of our members who have increased costs to families to take advantage of the child care subsidies,” she said.

“They need to increase their fees in order to remain financially viable.”

Ms Rishworth said the new system was meant to put downwards pressure on fees, but they had continued to rise.

“The Minister said the Government would ‘name and shame’ centres that do the wrong thing and grossly increase their fees, but this was just spin – not one centre has been named,” she said.

Mr Tehan said there were legislated limits on how much subsidy the government would pay per hour and 85 per cent of centres were at or below that cap.

“Services are free to determine their own fees and I encourage any parents that aren’t getting a fair deal from their provider to vote with their feet and find another service.”