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Rising cost of childcare sparks ACCC inquiry

Tom McIlroy
Tom McIlroyPolitical correspondent

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The Australian Competition and Consumer Commission will investigate the rising cost of childcare and out-of-pocket costs slugging family budgets.

Treasurer Jim Chalmers and Education Minister Jason Clare said a 12-month inquiry would begin in January, funded through a $10.8 million commitment in next month’s federal budget.

The government says the rising cost of care is “a massive disincentive to work more hours or more days”. AFR

As the Albanese government looks to use its first budget to address soaring cost-of-living pressures, Dr Chalmers said childcare costs had increased by 41 per cent in the past eight years.

“It shouldn’t cost parents more than they earn to put their kids through childcare. But for many families, that’s the challenge they face – when it’s sometimes cheaper to stay at home and take care of the kids than it is to go to work,” he said.

Next week Mr Clare will introduce legislation to make childcare more affordable.

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Labor plans to lift the maximum childcare subsidy rate to 90 per cent for families for the first child in care and increase subsidy rates for every family earning less than $530,000 in household income for one child in care.

    “Our plan will make childcare cheaper for more than a million families and that means that parents will be able to work more hours if they want to,” Dr Chalmers said.

    Mr Clare called the rising cost of care “a massive disincentive to work more hours or more days”.

    “At the moment about 60 per cent of mothers of children under six who work, do part-time hours,” he said.

    “A lot of Australians would want to work more, but if they did all of that pay would be gobbled up by the childcare bill. It means it’s not worth it.

    “The ACCC inquiry is another way the Albanese government is helping to drive down out-of-pocket childcare costs for families.”

    Tom McIlroy is the Financial Review's political correspondent, reporting from the federal press gallery at Parliament House. Connect with Tom on Twitter. Email Tom at thomas.mcilroy@afr.com

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