Supply - and Demand !

The law of "Supply and Demand "has been with us since the first trade in goods began along the old Silk Road at the beginning of time, and it is perfectly simple.   When supply falls short of demand - the price goes up !

One of the most sought after commodities in New South Wales is a place in a childcare centre - and this is in short supply.   There is constant parent anguish at rising prices and for some mothers taking on a job is only marginal because childcare fees eat up the major portion of the salary earned.

It seems that some childcare centres have hit on a new way to increase profitability beyond the scope of daily charges.  Parents are now being asked to pay a "Reservation Fee " when they seek to enrol a child and this is usually in the vicinity of $ 400.   This brings with it the expectation that when a vacancy occurs, the replacement will come from this waiting list, and some desperate parents enrol at a number of childcare centres to enhance their chances of securing care for their child - and some are finding that this fee is nonrefundable.

Now this reservation fee idea has been raised another notch.   Some centres are now offering an upgrade to a "Priority Reservation Fee " at a cost of $ 1,500.    The expectation is that when a vacancy occurs this extra payment will "queue jump " that applicant and secure placement ahead of all those on the lesser waiting list.   Again, it is usually nonrefundable.

New South Wales Fair Trading comments that complaints about childcare doubled from 2013 to 2014.    This refusal of refunds applies to a variety of circumstances.  In some cases, the child reaches school age without being offered a placing and it is very hard to justify that waiting list charge.   In some other cases, parents have flocked to reserve a place at a new childcare centre advertised as opening shortly - only to find that the project stalls and does not proceed.   Retention of a reservation fee in such cases may be negotiated by Fair Trading, but without a degree of certainty.

It would be a good idea if the New South Wales parliament passed legislation to clear up this reservation fee mess.   Some would question the morality of a priority listing at an enhanced fee and others might wonder why any fee should be charged when placement should be on a "first come - first served "basis.   The imposition of any nonrefundable policy is certainly open to question.   There is the expectation that paying a fee will result in an outcome and when that outcome does not eventuate the justification for the fee vanishes.

Leaving the option of refundable registration fees in the hands of childcare proprietors is to invite anomalies.    Applicants have a right to know where they stand on such issues and have the protection of law.  Clearly, such a law change is urgently needed !