Childcare costs double in five years
Early childhood educators say new figures that suggest childcare costs have doubled in the past five years are no surprise.
Research company IbisWorld estimates that childcare, clothing and footwear were the fastestgrowing areas of expense for New Zealand parents, up 60 per cent between 2013-14 and 2018-19.
The research suggested Kiwi families spent on average about $5028 per baby last year on those expenses, up from $3034.
Topping the list for revenue growth was the childcare industry, which IbisWorld said was earning $1.1 billion, almost double the $582.6 million it took in five years ago.
The rise was put down to more parents being in the workforce who were also working longer hours, resulting in soaring rolls.
Early Childhood Council chief executive Peter Reynolds said there were indeed more children in childcare but subsidies had not kept pace, forcing many centres to raise their fees.
The average childcare centre had lost more than $103,000 in subsidies over the past decade, he said. ‘‘So where does that come from if not from government subsidies? And the answer is – it has to be either from parents, or you cut your service back.’’
A one-off 1.6 per cent increase from March this year was welcome but did not even cover inflation over that time, he said.
Another factor raising childcare costs was rising rates of qualification. Most teachers now had an education degree or postgraduate qualification, a deliberate strategy but one that had an impact on wages.
Centres were also having to bring in overseas teachers because not enough were being trained domestically.
While childcare was by far the biggest expense, IbisWorld said parents were also paying more for clothing.
Revenue from children’s clothing rose 11.4 per cent over the past five years, from $295.1m to $328.6m, while footwear jumped from $73.2m to $81.8m, an increase of 11.7 per cent.
IbisWorld attributed the trend in part to high-priced fashion, with a number of designers now catering for younger ages.
This had been offset by stronger competition keeping a lid on prices, coming principally from online stores.
However, shoes were a dealbreaker. ‘‘New Zealand parents have sought out higher-quality, more durable footwear for their children in recent years, demonstrating a willingness to invest more in children’s shoes if they believe them to be particularly durable,’’ IbisWorld senior analyst Hayley Munro-Smith said.
Toys were more expensive, but imported, low-cost toys had kept a lid on significant increases in overall expenditure.
IbisWorld also noted that many parents were opting to include their children on their health insurance policies.
early-childcare revenue
kids’ clothing revenue
footwear revenue