Childcare costs set to rise from 1 July

Just weeks after the Rudd Government announced it was increasing the tax rebate for out-of-pocket expenses for childcare from 30% to 50%, childcare operators including ABC Learning Centres, are set to raise fees by 7% to 10%.

A spokesman for ABC would not give a firm indication on the magnitude of the fee increase, but he did confirm that fees are under review. “We are doing a lot of modeling to examine the impact on parents in terms of out-of-pocket expenses.”

While Deputy Prime Minister Julia Gillard has warned childcare companies that the Government will be monitoring fee increases to prevent profiteering, sharp increases in operating costs (particularly wages) will force corporate and community-based childcare operators to lift fees by between 6% to 10%.

ABC shares have risen since the federal budget, when the Rudd Government increased the tax rebate for childcare expenses and increased the baby bonus by about $700 to $5000 from 1 July. ABC’s stock has risen around 15% since the day before the budget to about $1.50 in morning trade.

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