Rising fees threaten impact of government's childcare subsidy

"Hopefully this should mean cheaper child care for the majority of parents," education and care consultant Lisa Bryant said.

"But some providers are using the subsidy as a way to increase their fees, so many families won't see as much of the new government investment as they would have otherwise."

Effective from yesterday, families earning less than $530,000 with one or more children under five will receive childcare subsidies of up to 90 per cent depending on income.

Before the subsidy kicked in, there was a wage increase of 5.75 per cent.

As a result, Bumble Bees Childcare in Wodonga increased their fees by $10 a day this week.

"We have raised rates, not because of the subsidy, but because of salary increases, superannuation and everything along those lines," director Duncan Morrow said.

Yarrunga Early Learning Centre in Albury likewise increased their fees by $8 a day.

"I think the subsidy is a good thing because early education staff have just received a pay rise," director Debbie Stanley said.

"So getting the extra subsidy allows the families to get a higher rebate without having the fee increase effect them."

Bright Horizons Childcare Wodonga director Naitelle Klepiak said they will also be increasing fees, although she did not want to say by how much.

Ms Bryant acknowledged that some providers engage in "price gouging", with certain companies exceeding fee increases justified by wage rises.

"I think the government needs to spend their money smarter," she said.

Ms Bryant proposed that instead of subsidising families, the government should focus on subsidising wages to address staff shortages and subsequently reduce costs for consumers.

"They have to increase childcare educators fees much like they did with aged care workers, because that's the only way we'll be able to attract and retain educators into the sector," she said.

"If the government subsidises the wage increases there will be no costs passed on to parents."

The industry currently faces a workforce crisis that "the government isn't doing anything to address", she said.

Mr Morrow emphasised the need for better salaries for educators.

"There is a huge staff shortage in childcare," he said.

"We are running one room of 12 kids instead of 16 due to lack of staff, so we could take another four babies a day but there's no staff to cater for it."

The recently released interim report of the childcare inquiry by the ACCC found that childcare fees rose faster than inflation and wage growth during the past four years.

Ms Bryant said that Guardian Early Learning and Affinity Education are about to be sold for $1 billion each.

"Lots of people are making money in this sector, but it's not the educators and costs are too much," she said. "It's about time we rethink how the government is investing into the sector."

To read more stories, download The Border Mail news app in the Apple Store or Google Play.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: