Nearly one in three families spends more on childcare than on food and more than 80 percent spend more than they spend on their utility bills, making it unaffordable for thousands of people across Australia. child care rates are projected to increase 4.1 percent annually over the next four years, rather than eclipsing projected inflation, according to Department of Education documents. Unlike the school sector, families do not have the option of choosing a low-cost public childcare service. Inland metropolitan areas, Mr.
Phillips says, tend to be more populated, leading to higher, more prosperous demand, meaning customers are willing to pay more and more expensive for businesses to set up their stores. Low-income families are likely to spend a much larger proportion of their discretionary income on childcare than high-income families, meaning that there is less left for other family essentials. We also found that about 83% of families using child care spend more on child care than on utilities or clothing. The U.S.
Department of Health and Human Services has set an affordability threshold for child care for low- to middle-income families of 7% of net income. Child care costs in Australia are among the highest in the OECD, accounting for about 27% of household incomes. This figure shows that child care affordability is an issue for many families, regardless of how much they earn. For Phillips, whose work includes an analysis of government-proposed changes in childcare, most capitals in Australia have experienced price increases of around 20 percent.
It is not feasible to say that this is a private election and that, therefore, the costs of childcare must be borne by the family. Australia's child care system offers the fourth most expensive tariff in the OECD, a problem that prevents women from reaching their full potential and slowing economic recovery, several groups warn. Sydney and Melbourne are Australia's most expensive places for early childhood education and Hobart is one of the cheapest. Much of the discussion on child care affordability focuses on hourly costs and anecdotal evidence based on individual family circumstances.
The child care subsidy is designed to facilitate the work of families, especially working parents with lower incomes. Anecdotally, parents will tell you that child care prices have increased in recent years in particular. The following figure uses this data from HILDA and compares the cost of child care with other common household expenses.