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Fees at 1200 ABC Learning childcare centres will rise by up to 10 per cent on July 1, costing parents an extra $5.50 a day.
Childcare magnate Eddie Groves yesterday confirmed the increase, which will raise fees at his centres to an average of about $60 a day.
The fee rise is more than twice the rate of inflation and five times as high as the rises being planned by other childcare operators. It will be the third fee rise in 12 months for families using ABC centres.
It has raised concerns childcare operators are taking advantage of a massive rise in childcare subsidies that will take effect on July 1.
The Rudd Government will increase the childcare tax rebate from 30 to 50 per cent on July 1, delivering hundreds of dollars a year in extra subsidies to parents.
Deputy Prime Minister Julia Gillard last week warned childcare operators she would not accept unfair fee rises on July 1 that ate into the subsidy rise and threatened the Government would "use its powers'' if unfair hikes emerged.
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ABC Learning raised fees by 4 per cent last July and a further 2 per cent in January.
Childcare Associations of Australia says its members are planning fee rises of between 2-4 per cent on July 1.
Mr Groves defended his plans, claiming ABC's fees were below market average.
"Back on the 1st of July 2007, ABC didn't increase its fees as much as the industry so we felt that we were below industry average,'' he told a conference call hook-up of investors yesterday.
"We feel that we will be below average industry after 1 July (2008) as well,'' he said.
A spokeswoman for ABC Learning said ABC Learning's fees averaged $55 a day, while fees in some community-based childcare centres were about $70 a day.
Figures supplied to The Daily Telegraph by the Government last week indicate ABC Learning's fees are not below average. The average fee for long day care centres in NSW is $55.60 a day.
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The company will also try to cut back on temporary staff, improve management of its enrolments and fill places that are empty part of the day to improve profits.
- reprinted from The Daily Telegraph