How will the government's final report on the PC inquiry into Childcare affect the listed stocks in the sector

How will the government's final report on the PC inquiry into Childcare affect the listed stocks in the sector? The Australian Government released the final report of the Productivity Commission's Inquiry into Child Care last Friday. The net result of the PC's recommendations is an increase in government funding to the industry of $266m per annum or 4.7%. We note that the PC was asked to make recommendations within the current 'funding envelope'. We believe that funding will increase to the sector, however expect that funding will most likely be re-distributed to lower and middle income families. We think that this will assist the listed players with the bulk of their portfolios located in outer-metro and regional areas. Affinity Education (AFJ.AU) has only 15% of the portfolio located in inner metropolitan suburbs and we estimate that G8 Education (GEM.AU) is closer to 25-30%. More in depth research, including G8 Education, Affinity, and Folkestone here: (VIEW LINK)


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