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Australia: ACCC inquiry into rising childcare prices

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The Government announced it will direct the ACCC to conduct a 12-month inquiry to inform the Government’s strategy to reduce cost of living pressures on Australian families

In brief

The Minister for Education announced on 21 September 2022 that the Government has directed the ACCC to commence an inquiry into the costs of childcare, and in particular why childcare costs have increased significantly in recent years (the announcement states the increase has been 41% in the past eight years).  The announcement follows the Government’s stated commitment to a comprehensive plan for cheaper childcare and addressing rising costs of living as announced during the Federal Election.

An objective of the ACCC inquiry, which the Government has committed AUD 10.8 million to, is to uncover the key drivers for rising childcare costs and out-of-pocket expenses.  While various measures have already been introduced at federal and state levels, for example the New South Wales Government’s recent announcement of the introduction of the A$5 billion ‘Childcare and Economic Opportunity Fund’, the Government hopes that the ACCC inquiry will shine a light on the underlying causes of increasing prices to inform decisions to achieve the Government’s stated policy objectives. 

Recommended actions

The ACCC has various statutory powers enabling it to issue voluntary and mandatory information and document requests to market participants including in connection with certain inquiries.

Participants in the childcare industry, including businesses and customers, should be ready for industry consultation by the ACCC which may involve the ACCC calling for submissions. 

In relation to voluntary ACCC requests for information, participants should consider the extent to which they want to furnish any information or insights and must ensure any information they provide is accurate.

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Lynsey Edgar is a partner in the Sydney dispute resolution team, whose practice focuses on competition and consumer law. She is global co-lead of the Firm's Competition Litigation Taskforce. Lynsey is recognised in Legal500 (Competition and Trade, Australia, 2022), where she is described by clients as having "high commercial acumen" and providing "clear and commercial merger control advice". Client feedback to Chambers & Partners states that Lynsey is "outstanding in her ability to advise on complex matters". Lynsey is a member of the Law Council of Australia's Competition and Consumer Committee, and has spoken widely on topics including compliance with competition law and responding to regulatory investigations.

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Georgina Foster is a partner in Baker McKenzie's Sydney office and leads the Firm’s Australian competition practice.

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Helen Joyce is a partner in Baker McKenzie’s Dispute Resolution Practice Group in Melbourne. She joined the Firm in 2010 having spent the prior decade practising as a solicitor in London. Helen is recognised in the 2023 edition of Best Lawyers Australia for Competition Law and Litigation.

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Jeremy Hardy is an Associate in Baker McKenzie, Sydney office.

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