Big cost slug for child care

TENS of thousands of families have seen a hike in childcare fees after Australia’s biggest provider introduced its annual increase several months early to compensate for soaring costs.

Goodstart – a not-for-profit provider with 664 centres servicing more than 60,000 families – upped its fees this month by an average of 4.9 per cent.

It comes as Australia’s biggest forprofit provider G8, which looks after 46,000 kids across 470 centres, bumped up its fees by 6 per cent in February.

Kindicare app founder Benjamin Balk said he expected other providers to follow suit and estimated that fees across most centres would rise by 4 to 8 per cent this year.

He said the latest data from his app, which helps parents find a childcare provider, found that the average daily fee was now $119 a day. Last year fees went up on average 6.5 per cent.

Goodstart board member Natalie Walker said the industry was “under the biggest financial pressure ever experienced”.

“The sector is facing its biggest crisis,” she said. “We’re not-for-profit so we’re not trying to make a profit, we are just trying to cover costs, so any rise in fees is for that reason.”

A breakdown of Goodstart’s fees revealed 72 per cent goes on wages; 16 per cent on rent, facilities and maintenance; 5 per cent on IT and operating costs; a further 5 per cent on nappies, food, educational resources, cleaning and health and hygiene products; about 2 per cent on training and about 1 per cent supporting vulnerable children.

Ms Walker said childcare providers across the sector were being forced to increase fees due to a “confluence of factors” including unexpected costs relating to the pandemic, lower attendances, rising rents and wages, plus costs incurred from staff shortages.

“Most providers are small, familyrun businesses with only a handful of centres,” Ms Walker said. “The real fear is that we are going to see closures.

“They will have been drawing on their balance sheets to get through this period. Sometimes there is nothing left in the tank.”

Former lawyer turned business consultant Vicky Doneska, 42, from Sydney, said the cost of her son’s $152-aday childcare fees meant it was not financially viable to work full-time.

“I think there are a lot of women who choose not to work more because it does not make financial sense,” she said.