ACCC Interim Report: What many may NOT realise!

Further to the ACA National response (ACA NSW username and password required for access) following the release the ACCC Interim Report on 5 July 2023, ACA NSW members may be interested to know about what else was in that Interim Report that were not generally reported publicly.

The most interesting finding of the ACCC was that after accounting for inflation (real terms), the national average fee rises was 4% for centre-based day care services and outside of school hours care services (see page 70 of the Interim Report).

But there are more interesting findings of the ACCC, including …

Parents’ out-of-pocket expenses

According to the Organisation for Economic Co-operation and Development (OECD), the OECD percentage average for out-of-pocket childcare costs for a single-parent family is between 5%-6%.

The ACCC Interim Report (Figure 6) showed that for all Australian households, the childcare out-of-pocket expenses as a share of disposable income was between 5% and 7%, but over 12% for the lowest households’ after-tax household income decile.

Difference between privately-owned and not-for-profit services

The Interim Report found that the differences of the average daily fees between privately-owned and not-for-profit services were between $1 and up to 7% (see pages 18 and 98, Figures 4.4 and 4.6).

Assuming services’ staffing numbers are comparable, the Interim Report, however, was silent on the fact that privately-owned services were subject to company taxes and payroll taxes, while not-for-profit were not and could leverage ATO-approved tax-minimisation measures for staff.

“Oversupply” does increase fees by up to 40%

The Interim Report highlighted that the median distances of places to children in Greater Sydney and the rest of NSW were under 2 km and just over 3 km (see Figure 2.15).

Yet the Interim Report also suggested that the higher the number of services, average daily fees were higher by up to 40% (see Figure 4.2).

Minority of NSW services were charging above the hourly rate

The Interim Report showed just over 20% of centre-based day care services were charging above the hourly rate cap (see Figure 5.13). And less than 20% of out-of-school-hours care services were charging above the hourly rate cap.

In other words, the greater majority of services were earnestly trying to be as affordable as possible.

ACCC Inquiry’s next steps

The ACCC is required to release its Final Report in December 2023. So, for the remainder of their process, the following are planned to occur:

• July-August 2023 – Parents and guardians survey (non-English)
• July 2023 – Secondary data request for providers
• August 2023 – Roundtable discussions with CALD and First Nation families
• September 2023 – Roundtable discussions with First Nation families, providers, parents and guardians, in-home care providers
• September 2023 – Consultation paper to be released
• October 2023 – Submissions due

For ACA NSW members …

ACA NSW will unpack these findings at its next ACA NSW What’s The Buzz meeting on 24 July 2023.

For any further information/clarification, please contact the ACA NSW team via 1300 556 330 or nsw@childcarealliance.org.au.

PUBLISHED: 17 JULY 2023