The ratio's change from 1:8 to 1:5 educators for 2-3yr olds from the 1st January, 2016.
Most centres are custom built, with room configurations suitable for exact educator to child ratio's. The majority of centres are operating with 2-3 yr old rooms of, eight, sixteen or twenty four children.
From 1st January a room of eight, will require an additional educator or reduce placements by three. Reducing placements is the last option. The room of eight will require another educator. The additional cost of employing that educator would be around $48,000. A room of sixteen would also require an additional educator, and be required to reduce enrolments by one child per day. The total additional cost for a room of sixteen (15) would be $77,615. A room of twenty four would require an additional two staff, estimated cost would be $107,150.
Normally, costs are passed onto parents, and the expectation is that fees will increase around $10 per day from 1 st January. Fee increases will be July 2015 to absorb the government CCB (Child Care Benefit), January 2016 to cover ratio increases, July 2016 to absorb the government CCB, there will also be centres who will increase fees again in January 2017. Resulting in increases of around $22 per day.
The families benefiting most are those earning under $65,000, using the above increases, the projected budget savings figure would be reduced. The benchmark being set at $11.55 per hour, interestingly, represents the average hourly charge in Sydney centres. The benchmark is an attempt by the government to keep a lid on prices. Centres will consider very carefully the implications of increasing fees above the benchmark. Corporate childcare providers will need to assess the customer base of each centre and their ability to meet fee increases. If they disregard a one size fits all approach, then there is room to move, whilst still operating below the benchmark, but careful assessment of customer ability to pay in conjunction with current occupancy levels of each individual centre will be required.
My own opinion is, that there is not enough of a saving to encourage the majority of the estimated 165,000 parents to either return to or increase employment hours. The big downside is the reduction of care from two days to one and the non subsidised care for some families. All children should be entitled to a subsidised minimum, of two days care, in an early childhood setting. Continuing to allow these families to access care will be the negotiation tool with The Senate.
GEM Price at posting:
$4.06 Sentiment: None Disclosure: Not Held
(20min delay)