Government will 'name and shame' childcare price gougers

Education minister Simon Birmingham has warned childcare providers not to increase fees to profit from a new means-tested childcare subsidy

Australian Prime Minister Malcolm Turnbull is seen during a visit to the Mud Puddles Cottage Child Care Centre in Sydney, Monday, July 2, 2018. Source: AAP

The Turnbull government is warning childcare providers not to jack up their fees to capitalise on a new means-tested subsidy designed to help parents, which came into effect today.

Education Minister Simon Birmingham said the government was prepared to name and shame those who do the “wrong thing”, while stressing parents should still expect routine fee increases at the start of the financial year.

“We will be monitoring the system closely,” Mr Birmingham said, speaking at a childcare centre in western Sydney.

“We will make sure that families get the benefit of these reforms and if there are providers who do the wrong thing then we will, of course, act to make sure that they are identified and they are held to account for doing so.”

The Coalition’s sweeping reforms to childcare payments took effect on July 1, replacing two previous schemes with one means-tested payment.

The new subsidy allows parents to claim government support on an uncapped number of hours – but the subsidy is more generous for families on lower incomes who work the most hours.

Education Simon Birmingham. Source: AAP

Families who earn a combined income above $350,000 are not eligible at all.

One of the country’s largest providers – G8 Education, which runs more than 500 centres – has already announced a blanket fee increase of 5.5 percent.

Reacting to reports of fee increases, independent conservative Senator Cory Bernardi said childcare costs were rising faster than inflation because they were “fueled” by increases in taxpayer subsidies.

“The sector recognised by putting their prices up, they could prompt the demands in this place [parliament] for more subsidies to be thrown at them and they would inevitably be met,” Senator Berardi told parliament.

While most families will get more assistance under the new scheme, the government concedes around 280,000 will be worse-off – mostly those on higher combined incomes and those who fail to meet the new “activity test” to prove they are studying, working or volunteering.

Australian Conservatives Senator Cory Bernardi. Source: AAP

Labor’s shadow early childhood minister Amanda Rishworth said the changes would “hurt many vulnerable and low income families”.

Roughly 200,000 more are yet to transfer their details to the new system and could see their payments cut off in the coming weeks.