Childcare fees may need to be capped to curb erosion of subsidies, ACCC says

ACCC chair, Gina Cass-Gottlieb. The ACCC says the government could in some cases ‘step in’ to directly provide childcare, as increased subsidies had a limited effect on reducing costs. Photograph: Blake Sharp-Wiggins/The Guardian

Caps on childcare fees may be required to prevent providers hiking prices in response to more generous government subsidies, the competition watchdog has warned.

The Australian Competition and Consumer Commission’s second report into childcare, released on Sunday, warns that childcare in Australia is “relatively less affordable for households than in most other OECD countries”. The ACCC said there would be “substantial benefit” in the government considering “direct price controls”.