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Friday, May 31, 2024

Childcare giant profits highlight need for fee regulation

News that Australia’s biggest listed childcare company has posted a 53 per cent profit increase and is paying its CEO a $3 million package while continually lifting fees has renewed calls from family advocates for tighter government regulation of early childhood education and care costs.

G8 Education, which owns childcare chains including Casa Bambini and Community Kids, announced another fee increase last week, which contributed to an accumulated 23.8 per cent increase in fees since January 2022. The company’s website states that G8 Education owns “more than 430 centres across Australia”.

Responding to this evidence of early learning and carer providers pocketing profits, The Parenthood CEO Georgie Dent said government intervention has never been more urgent. 

“There is no reason for fees to be so high and it is infuriating that this is occurring in the middle of a cost-of-living crisis,” Ms Dent said. 

A recent Australian Competition and Consumer Commission inquiry found that fees across all childcare services had “grown faster than inflation and wages” since the Child Care subsidy was first introduced.  

“G8 attributes the increases to a ‘diligent focus on cost management’, but let’s call this what it is – price gouging,” Ms Dent said. 

She said the fee hikes were unsustainable and forced families, especially mothers, to choose between saving money or progressing their careers and sending their children to early education. 

“We’re not just in a cost-of-living crisis, we’re actually in a cost-of-working crisis, in which parents – usually mothers – literally cannot afford to work because of the way the subsidy system is set up and the fact that there is nothing to stop providers from increasing their prices.  

“The government must create a system where parents can freely choose working and caring arrangements that work for them.” 

Director of Minderoo Foundation’s Thrive by Five campaign, Jay Weatherill said that profit growth based on fee hikes for families underscored the need for more bold and direct market intervention by the Federal Government.

“At a time when families are doing it tough due to cost of living pressures, we are seeing childcare providers enjoy soaring profit on the back of repeated fee increases.

“The Federal Government must take concrete action to ensure that families are not being taken advantage of.

“To have the largest early learning provider in the country record more than $56 million in profit when we know many families continue to struggle with affordability, highlights why we need more direct market intervention and daily price caps.

“Many families across the country have had to make very tough financial decisions to cut down on essential spending to accommodate early learning fee increases.

“The Federal Government has taken measures to provide families with vital financial relief through increased child care subsidies, but in many instances, these increases are absorbed by fee hikes by childcare providers.

“Thrive by Five is calling for a $10 a day early learning price cap to provide significant financial relief to families and enable more children to access the benefits of high-quality early learning.

“Direct market intervention through daily price caps would help the Federal Government ensure that every Australian family has access to high-quality affordable early learning,” Mr Weatherill said.

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