Childcare in Perth: Day care centres charging over maximum rate cap as daily prices surge above $200

More than one third of childcare centres are charging fees above the maximum recommended by the Federal Government — the highest percentage since the subsidy was introduced in 2018 — as daily prices in Perth surge to above $200 in some suburbs. According to Federal Government data, 34.9 per cent of childcare centres in Australia had hourly fees over the maximum rate cap of $14.29 in the March quarter, compared to 29.9 per cent in the previous quarter and 12.5 per cent five years ago. The hourly-fee cap is set by the Government as a guide for what a “high fee” might be, and it’s the maximum rate the government will subsidise. A family’s Child Care Subsidy percentage applies to the lowest of either the cap, or the hourly fee charged by their childcare provider, so families pay the difference when childcare centres charge above the cap. Last Monday, July 7, the CCS hourly rate cap increased to $14.63 in line with the Consumer Price Index. But the industry has warned the rise is not enough. Rachelle Tucker, the chief executive of the Australian Childcare Alliance WA, said the increase in centres charging above the hourly cap was concerning from an affordability perspective. “But it is a reflection of the growing gap between the actual cost of delivering quality early learning and the CCS system’s capped rates,” she said. “The fee cap has not kept pace with the real costs of service delivery, especially for services in high-cost areas or those with higher staffing needs to support quality ratios and educational outcomes.” She added it was important to note that charging above the cap did not necessarily mean services were over-charging. “It often means they are trying to cover their genuine operating costs,” she said. The revelations come at a time of turmoil for the sector, with educators, parents and providers reeling from allegations against Victorian man Joshua Dale Brown, who was charged with dozens of child sex offences allegedly committed against eight children at a Melbourne childcare centre. The WA Government has ordered a snap review of child safety in the State in light of the allegations. Last weekend, The West Australian revealed that hundreds of WA childcare centres either don’t meet minimum quality standards or are yet to be rated. The State has the lowest proportion of centres that exceed the minimum standards, and none of its almost 1500 childcare services are rated “excellent”. Government data shows fees in WA have increased by 15 per cent or $1.90 an hour in the past two years, to an average of $13.90 an hour across the country. Daily fees across Perth have hit $200 — before the CCS — in some areas. In response to a Facebook post on a parents’ forum this week, dozens of Perth mothers shared their daily fees, starting as low as $119 and reaching $215. The six Schools of Early Learning are among the most expensive. Its North Perth centre has a two-day minimum costing $424. The price decreases each additional day to $905 for five days. Last year the Federal Government announced a 15 per cent pay rise for almost 200,000 childcare educators as part of a $3.6 billion package — but centres could only access the funding if they agreed to cap any fee increases at 4.4 per cent. Ms Tucker said while many centres had done their best to remain within the cap, “the reality is that it is becoming increasingly difficult to absorb the rising costs of operating without passing some of those costs on to families. “The cap is a blunt instrument that doesn’t account for the significant cost increases in wages, utilities, food, rent, and compliance,” she said. “Services are trying to balance affordability for families with the financial sustainability required to maintain quality and retain staff. Many services are operating on very tight margins, with little financial buffer.” Minister for Early Childhood Education Jess Walsh said the Government’s early childhood education reforms, introduced two years ago, had delivered relief to more than one million families. “For a family earning $168,000, with one child in care 30 hours a week, our reforms have cut out-of-pocket costs by around $7440 than they otherwise would be,” she said. “We want to make sure workers can be fairly paid without the costs being passed onto families.” The Government is taking compliance action against centres that breach the 4.4 per cent fee cap, but it is understood the vast majority of centres have kept within the rules.