Counting the cost to families: assessing childcare affordability in Australia

Child care assistance Early childhood services Child care Economic modelling Household finance Australia

The reality of family and work life has changed substantially over the past three decades, and many argue that despite significant reform, our early childhood education and care (ECEC) system is not adequately supporting children and parents to thrive and fully engage in life.

Despite government subsidies that meet up to 85 per cent of childcare costs, depending on a family’s economic circumstances, childcare is still a significant cost for many families. While means-tested subsidies have reduced costs for the most disadvantaged families, they can be crippling for many.

But exactly how much parents spend, how this compares with other major household expenditure, and how much is too much, are all open questions. Too often, these questions are being answered with anecdotal evidence and inadequate data that does not cover the breadth of family circumstances, is outdated, or provides limited insight into the problem.

This paper reviews available data on expenditure and affordability, and presents new analysis of household expenditure data to understand how much Australian families are spending on early childhood education and care, as a proportion of their disposable income.

The evidence is overwhelming that good quality early childhood education and care delivers huge benefits to families, to society and to the economy. However, with childcare remaining unaffordable to so many, Australia is unable to fully capitalise on the benefits that good quality childcare brings.

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