Signals by CBA
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04/03/2013

Cost of Childcare in Australia Continues to Rise

Commonwealth Bank Signals reveals a 13% year on year average increase

CommBank Signals predicts customers will spend $167m on childcare services via credit cards this year

  • Over the past six years, total childcare services spend via credit cards has risen by 52 percent over and above the increase in all credit card spend, and by 19 percent in the last year alone1
  • Childcare services credit card spend has increased at an average YOY rate of 7 percent 2 3 over and above the increase for all credit card spend4
  • In 2012, CommBank customers spent $152m on childcare services via credit card; which is predicted to rise to $167m this year (10 percent increase)1
  • For almost a quarter of parents, childcare costs are equal to, or greater than, wages earned per parent returning to work5
  • In the 25-34 year old age bracket, the total childcare credit card spend is increasing at an average YOY rate of 12 percent over and above the increase in all credit card spend for 25-34 year olds
opening-quote Over the past 10 years, the number of babies born in Australia has increased by 22 percent with demographic trends suggesting that this will continue to trend up. This increase in births, combined with higher demand from mothers needing childcare as they go back to work, and an increase in childcare provider fees over and above inflation, has resulted in Australians spending more than ever. closing-quote
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1 Sourced from CommBank credit card transactional data 2007-12. 2 Adjusted for changes to the profile of CommBank customers spending on childcare services via credit card (2007-12) 3 Legislation changes allowing the childcare rebate to be directly offset against a payment to a childcare service provider saw childcare credit card spend dip for tax year 2011/12, however due to rebate capping spend - has since increased again for 2012/13 4 This is over and above the 6% average YOY increase in all credit card spend (childcare spend has had an average year on year increase of 13%). 5 Commonwealth Bank, Viewpoint Issue Three, March 2011. 6 Commonwealth Bank, Viewpoint Issue Three, March 2011. 7 Report of Government Services 2013 (http://www.pc.gov.au/gsp/rogs/2013) 8 Commonwealth Bank, Viewpoint Issue Three, March 2011. 9 ABS 3301.0 Births, Australia, 2011 10 Various sources such as 2012, 27 October, news.com.au “childcare fees rising seven times faster than inflation” http://www.news.com.au/top-stories/childcare-fees-rising-seven-times-faster-than-inflation/story-e6frfkp9-1226504264183 11 Australian Government Department of Human Services, Child Care Rebate, viewed 23 January 2013, http://www.humanservices.gov.au/customer/services/centrelink/child-care-rebate 12 Commonwealth Bank, Viewpoint Issue Three, March 2011