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Childcare costs keep rising, report shows

Family Childcare - US Army

Australia's childcare costs have risen at five times the rate of inflation over the course of a year, with the average hourly fee increasing by 7.6 per cent.

Education Minister Simon Birmingham says data released on Sunday shows the Turnbull government's "temporary stop-gap" measures are not enough to ease childcare costs, with more action urgently needed.

The Early Childhood and Child Care in Summary report found more than 1.2 million children were in childcare in the June 2016 quarter.

This was 2.1 per cent more than a year earlier.

The average hourly fee for all childcare service types was $8.65, an increase of 7.6 per cent since the June 2015 quarter, the report said.

In long day care - by far the most popular service - average hourly fees increased by 6.3 per cent to $8.90.

In a statement responding to the report, Mr Birmingham made the case for the government's proposed childcare overhaul, which is tied to a swag of welfare cuts.

The reform plan includes an hourly rate cap which is a necessary first step to arrest fee increases that would also provide families with a reference point, Mr Birmingham said.

Under the plan, the $7500 childcare rebate limit would also be removed for all families earning less than $185,000, he said.

"Over the next two weeks parliament has the opportunity to step up to the plate and provide the support that Australian families are crying out for," he said.

Labor has claimed pensioners, families, new mums and young Australians will be hurt by welfare cuts that would be used to support the reform.

© AAP 2017