31 January 2024

ACCC Final Report Acknowledges Family Day Care Rate Cap Inadequate

Since prior to the 2018 introduction of rate caps under the Child Care Subsidy (CCS), Family Day Care Australia (FDCA) has advocated around the inequity and inadequacy of the lower rate cap for family day care. 

On 29 January 2024, the Australian Competition and Consumer Commission (ACCC) yesterday released its final report into early childhood education and care (ECEC) services, which in addition to giving family day care a strong hearing, affirms our long-held position that the CCS fee cap for family day care is inadequate, stating specifically:

“The family day care hourly rate cap is also unlikely to be sufficient to adequately cover costs and recompense educators” (Finding # 23)

The report goes on to make the clear recommendation (Recommendation #2a) that:

“Determining an appropriate base for the hourly rate cap and indexing the cap to more closely reflect the input costs relevant to delivery of childcare services. This could include consideration of labour costs. As part of this, the family day care and in-home care hourly rate caps should be reviewed and consideration given to increasing them. This should ensure providers can adequately cover costs, including appropriate labour costs.”

The rate cap issue has featured across all of FDCA’s submissions to governments in recent years, including annual Pre-budget Submissions, the Productivity Commission Inquiry, and ofcourse to the ACCC specifically.

The Australian Government commissioned the ACCC inquiry to get a greater insight into the factors driving fee increases in ECEC. 

Overall, the ACCC report finds that the current market settings are not delivering on accessibility and affordability for all children and households across Australia and that a single approach to government regulation and intervention (‘one-size fits all’) is unlikely to deliver government objectives or meet community expectations.

The report explicitly acknowledges the importance of family day care to many households and includes specific analysis and findings about the sector throughout. It highlights that there has been a decline in availability of family day care services, which has reduced flexibility and options in the market, particularly impacting households that are culturally and linguistically diverse, in remote areas, in areas of disadvantage, or that work non-standard hours.

Further findings specific to family day care substantiate many of FDCA’s representations, which are informed by our research and the views of our members. These findings include:

  • The nature of competition reflects the unique demand and supply factors in childcare markets. For family day care, a preference of this type of care is based on specific characteristics – including a home-like environment, small number of children care for and consistency of a single educator. (Finding #19c)
  • The numbers of family day care services and in-home care services have reduced significantly across Australia since 2018. (Finding #20)
  • Reductions in the number of family day care services has a disproportionate impact on culturally and linguistically diverse households and on households in less advantaged areas. (Finding #21)
  • There is little financial incentive for family day care and in home care educators to enter or remain in the sector, as effective wages are below comparable award rates for other forms of childcare. (Finding #22)
  • For family day care and in home care, there is a high share of services charging above the hourly rate cap, which likely reflects the costs of providing these services and exceeds the hourly rate cap. (Finding #25c)

The ACCC’s final report can be accessed on the ACCC’s website here.

The findings and recommendations from the ACCC’s inquiry will feed into the Productivity Commission’s all-important review of ECEC and final report which is due mid-2024

FDCA is confident that the ACCC’s acknowledgment of our long-held advocacy positions, will result in real flow on effects into the Productivity Commission and subsequently onto policy and subsidy design. They will significantly strengthen FDCA’s positions in our discussions at a Departmental and Ministerial level over the coming months and we will keep members engaged and informed as we progress.  

Pre-Budget Submission

On 25 January 2024, FDCA submitted our Pre-Budget considerations for 2024-2025 to the Australian Government. The submission recommends four key investment measures to support the continued viability of a sector that is highly valued for its flexible, responsive and affordable ECEC:

  • Raise the hourly CCS cap rate for family day care to be on par with that of the centre-based care sector;
  • Apply an additional loading of 20% to the recalculated CCS fee cap for non-standard hours care;
  • Initiate a direct funding support program (an “Approved Service Engagement Payment”) for family day care approved services to assist in the recruitment, induction and training of new family day care educators; and
  • Initiate a direct funding support program (an “Educator Start-up Grant”) for new family day care educators to assist in overcoming some of the financial barriers to entry into the sector in establishing their micro-business.

You can find FDCA’s pre-budget submission for 2024-25 as well as other submissions we have made on our website here.

Kick Start Your 2024

We remind members that services and educators must start using the updated national approved learning frameworks from 1 February.

The frameworks are:

The Australian Children’s Education and Care Quality Authority (ACECQA) has developed numerous resources to assist services in supporting educators to implement the updated frameworks. These resources can be found on ACECQA’s website here. They include:

  • What’s changed fact sheets for each learning framework
  • Overview of changes video
  • A glossary of terms matching game
  • A series of posters

A new induction module for new educators and teachers is also available here.

Have you downloaded the myFDCA App?

Available to all FDCA members on both Apple and Android devices, the myFDCA App is FREE and available to download via the App Store and the Google Play Store.

The myFDCA App puts your range of exclusive member benefits in the palm of your hand to access anytime, anywhere! This means:

  • You can access your FDCA member benefits via your mobile device anytime, anywhere!
  • You can get realtime Family Day Care Locator notifications, never miss a care enquiry and respond instantly!
  • Your favourite resources such as the FDCA Learning Hub, the Online Engagement Series and JiGSAW magazine will always be in arms reach!

You can also view your membership and insurance information through the app. 

How do I get the myFDCA App?

To get the myFDCA App today, all you need to do is visit the App Store (Apple devices) or the Google Play Store (Android devices) and download the app.

Logging into your myFDCA App

Once you have downloaded the app, all you need to do is log in using the same email address and password that you use to access your FDCA Member Zone.

What if I haven't activated my FDCA Member Zone?

To activate your FDCA Member Zone, all you need to do is follow these simple steps:

  1. Click here to activate your free account
  2. Enter your registered email address (the same email that this email was sent to)
  3. An email will then be sent to your email address; click on the 'create password' button
  4. Create and confirm your password
  5. Use your email address and password to access the myFDCA App

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