ACCC eyes high costs of big-chain childcare
Large-scale childcare operators with heavy head office costs or that load up on debt for an acquisition binge have been put on notice about increasing federal scrutiny.
Citing the impact on the federal budget, the Australian Competition and Consumer Commission’s interim report into the industry flagged questions about why some large operators – those with 40 or more centres – have hefty costs.
The ACCC is asking why some head office fees and debt structures for big childcare players are so large. Peter Braig
An ACCC spokesman told AFR Weekend on Friday that while the regulator was not currently recommending such expenses needed remedy, “there may be benefit in further… analysing the nature of the costs included in this category and to the extent we can over the remainder of the inquiry, we will seek to do so”.
The scrutiny comes after centres increased fees just as subsidies rose. But some operators have raised concerns that government-level changes are driving up costs, citing the Fair Work Commission this year granting a 5.75 per cent increase to the federal minimum wage.
Chris Buck, who runs Brisbane City Childcare Centre, argued the government needed to further reduce childcare costs, including by better supporting a skilled workforce.
“This is the most challenging period I have seen in 34 years,” Mr Buck told AFR Weekend.
Another operator with more centres said: “The only reason [for fee rises] is because the government or some government body has pushed up our costs.”
John Wall, a consultant and owner of seven childcare centres, said local governments did not require property developers to conduct enough due diligence before approving plans to build childcare centres, causing an oversupply in some areas.
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