More Centres, Less Testing

Finance
 11 Dec 2024

Prime Minister Anthony Albanese is promising big things for childcare families if his government is re-elected.    

BY HEJIRA CONVERY, KINDICARE

DECEMBER 11, 2024

The Labor government wants all families to be able to access high-quality, affordable and inclusive early childhood education and care (ECEC), and today, Prime Minister Anthony Albanese has announced some pre-election promises to support this.  

The Prime Minister has vowed to spend $1 billion on building or expanding more than 160 ECEC centres, located in the places that need them most. 

He has also promised to replace the Child Care Subsidy (CCS) Activity Test with three days of guaranteed subsidised childcare, from January 2026, for families earning up to $530,000 per year. 

Prime Minister Albanese has described the $1 billion Building Early Education Fund as, “The biggest investment by an Australian government ever in new childcare services” and the need is definitely there.  

In his speech today, the Prime Minister acknowledged that, “There are simply not enough childcare centres in the regions or in outer suburbs that are growing fast;” and this Fund aims to improve childcare access for Australian families.  

The government explains that the Fund will include, “$500 million in targeted capital grant rounds, opening from July 2025, focused on quality not-for-profit ECEC providers and state and local governments to establish new services and increase the capacity of existing ECEC services.” 

Prime Minister Albanese says he’d like the new childcare centres to be located at local schools, wherever possible, because this “makes sense” for the parents doing drop-offs and pick-ups, and also benefits children by instilling a sense of confidence and connectedness.   

Prime Minister Albanese says, “We will look at schools that have space we can use, and will work with states and territories when they build new schools to make early education part of the plan from day one.” 

The government says the Building Early Education Fund also includes a, “$500 million provision for future Commonwealth investment in owning and leasing a portfolio of ECEC centres to increase the supply of services,” and money is being set aside to investigate how this investment might look.  

The prospect of new centres in childcare deserts and other in-demand areas will be appealing to families struggling to secure ECEC, and the government’s vow to replace the Activity Test with a Three Day Guarantee policy is also welcome news.  

Parenting advocates have long been campaigning for the Activity Test to be scrapped, due to the heavy administrative burden it puts on the families it’s supposed to help; and the Productivity Commission officially called for the Activity Test to be removed back when it released its final childcare inquiry report in September. 

The Productivity Commission’s report recognised that children’s participation in ECEC should not depend on their parents’ work, study or other ‘recognised activity’, and noted that the Activity Test wasn’t leading to ‘substantial’ increases in workforce participation. 

The promise of at least three days of subsidised childcare per week also ties in with the Productivity Commission’s final childcare inquiry report. 

The report recommended that by 2036 every child should be able to access at least 30 hours, or three days, per week of this quality ECEC, for 48 weeks per year. 

And today, the Prime Minister has promised that, “Under a re-elected Labor government, every family earning up to $530,000 will have access to the Child Care Subsidy for three days a week, guaranteed,” without having to work a certain number of hours or jump through bureaucratic hoops.  

The Activity Test would still apply for families accessing more than three days of ECEC per week, however, the Three Day Guarantee policy would mean that every family could afford plenty of high-quality ECEC in their child’s formative years.  

Although there would be no pressure on families to use the three days of subsidised ECEC, the government estimates that the Three Day Guarantee would benefit around 66.700 families in the first year after its introduction, and there is lots of evidence that high-quality ECEC makes an incredible difference to children, families and society. 

All in all, the Labor government is definitely committed to building a universal childcare system that’s, “Simple, affordable and accessible, for every family” and the only catch is their re-election!