BY HEJIRA CONVERY, KINDICARE

MARCH 26, 2025

Treasurer Jim Chalmers has had the rare pleasure of handing down a fourth Budget in one parliamentary term; and although this honour was unexpected, due to Cyclone Alfred delaying Labor’s calling of the election, the 2025-26 Budget isn’t too surprising for childcare families.   

It confirms several things the government has already announced, plus some tax cuts we didn’t see coming, and here are our key takeaways from the Building Australia’s Future Budget. 

The government is investing in every stage of education, and Labor remains committed to building a new universal early childhood education and care (ECEC) system, with a $5 billion investment. 

The 2025-26 Budget allocates $426.6 million for a new 3 Day Guarantee.  

This previously announced policy will replace the Child Care Subsidy Activity Test from January 2026, and it means families earning up to $530,000 will be eligible for at least three days per week of subsidised ECEC, regardless of how much work, study or other recognised activity they do. 

In its first full year, the government estimates the Guarantee will make 100,000 families eligible for extra hours of subsidised ECEC, and Labor says, "Families earning between $50,000 to $100,000, will be better off under the 3 Day Guarantee and are expected to save on average $1,460 per year." 

KindiCare’s CEO and Founder, Benjamin Balk, has spoken to News Corp about the 3 Day Guarantee and says removing the activity test will open up early education to more kids from low income families, which is positive for little learners, parents and our nation.   

The 2025-26 Budget invests $1 billion in Labor’s Building Early Education Fund. 

This Fund is also something we’re aware of, and it's contingent on Labor retaining power after the looming election.  

If they do so, this Fund will increase the supply of ECEC by supporting the building or expansion of 160 ECEC services in areas of need, such as outer suburbs and regional Australia.  

These ECEC services will be located on school sites where possible, which makes for a great transition from early to primary education.  

The 2025-26 Budget allocates $3.6 billion to fund a wage rise for the ECEC workforce. 

This two-part pay increase is also old news, with the 10% wage rise starting from last December and a further 5% rise coming into play from December 2025.  

However, old news is good news in this case, with the wage rise flowing from the Worker Retention Payment to benefit up to 200,000 early childhood educators and teachers.    

This wage increase is part of the government’s broader commitment to drive progress on gender equality, and they’re supporting Fair Work Commission processes which aim to remedy the potential undervaluation of work in female-dominated industries, like childcare.  

The 2025-26 Budget also puts public schools on a path to full funding, with $407.5 million over four years being put towards the 10-year Better and Fairer Schools Agreement. 

Our early learners will soon be primary schoolers, so this spending is very welcome.  

The 10-year Agreement sees the Australian government increasing its school funding contribution to put every public school on a path to 100% funding, paid for by federal and state/territory governments under the School Resource Standard. 

This funding is tied to reforms that will help to lift education standards around the nation, and Queensland was the last jurisdiction to sign the Agreement, days before the 2025-26 Budget was handed down.  

The 2025-26 Budget is being billed as a ‘cost-of-living Budget’, so us families can also look forward to lower taxes, lower energy bills and lower medical costs.   

The 2025-26 Budget delivers new tax cuts for every Australian taxpayer.  

The Labor government has been rolling out tax cuts since July 2024, and they’re now offering further tax cuts in 2026 and 2027.  

The figures are modest, not massive, but any tax cut is a good thing, and if you’re earning an average wage of $79,000, you can expect to get a new tax cut of $268 in 2026-27, then one of $536 per year from 2027-28, compared to the 2024-25 tax settings. 

In 2027-28, the government expects the average combined annual tax cut across all taxpayers to be $2,548, or around $50 per week, and you can estimate your tax cut with this calculator.  

As a working parent, you’ll also be interested to know that the Budget is banning most non-competes clauses. 

This means that if you’re a low- or middle-income employee you’ll be able to move more easily to a new job, and hopefully one with a greater salary!  

The 2025-26 Budget also allocates $1.8 billion to extend energy bill relief to the end of 2025. 

Every household, and around one million small businesses, will get two $75 rebates directly off their energy bill through to 31 December 2025, and although $150 isn’t a huge saving, the bill relief we’ve already received did take some pressure off the family budget, so more money is welcome!  

The 2025-26 Budget also allocates funds for more affordable medical visits and prescriptions.  

$7.9 billion is being set aside to make nine out of 10 GP visits bulk billed by 2030, which is comforting for families, and the family budget. 

There’s also a $784.6 million investment to ensure Pharmaceutical Benefits Scheme (PBS) prescriptions cost no more than $25. This is the lowest price a prescription has been at in 20 years, and pensioners will continue to get $7.70 scripts. 

And in particularly good news for us mums, $1.8 billion is being invested to list new medicines on the PBS, including new oral contraceptives and treatments for endometriosis and menopause.  

The government is spending $792.9 million to deliver lower costs, more choice and better healthcare for women, which is wonderful to see; and as part of this, they’re funding 11 new endometriosis and pelvic pain clinics (in addition to the 22 we have already). 

The 2025-26 Budget also provides cash to help establish eight new centres where healthcare professionals will be trained to insert and remove long-acting reversible contraceptives.  

There’s obviously lots more in the 2025-26 Budget than we can cover here, and if you’d like to delve deeper, you can read the Budget Overview or explore specific areas at budget.gov.au. 

Remember, too, that although the 2025-26 Budget contains no surprises when it comes to ECEC, we can expect plenty of new promises to be made when the election is announced, and there’s still hope that something amazing, like $10 per day childcare, may become a reality in the future.  

Stay tuned!