ALP’s pre-election pledge: $1bn for new and existing childcare centres

Anthony Albanese has pledged a further $1 billion towards overhauling Australia’s childcare system. See how it affects you.

Australian families in suburbs and regional towns without enough childcare places will get access to government-built centres under a $1 billion Labor election promise that will also fund the expansion of existing facilities.

Anthony Albanese described the pledged early education building fund as the “single biggest investment” by the government into new childcare services.

Half of the $1bn fund will be delivered as grants for existing childcare centres to make room for more children, while the other half will build government-owned centres in underserved suburbs – known as “childcare deserts” – with the facilities to be run by not-for-profit operators.

Earlier on Wednesday the Prime Minister also announced families would be guaranteed three days of subsidised childcare regardless of how many hours parents work under Labor’s latest step toward making early childhood education universal.

The pre-election commitment will unlock discounted childcare for about 70,000 extra Australian families currently not eligible to receive any subsidies due to parents failing the so-called “activity test”.

Families will be guaranteed three days of subsidised childcare regardless of how many hours parents work under Labor’s latest step toward making early childhood education universal. Picture: Getty Images

In a speech on Wednesday, the Prime Minister will say the changes “ensure every family can afford three days of high-quality early education”.

“Affordable for every family, funded for every child, building a better education system every step of the way,” he will say at the Building Early Education for Australia’s Future event in Brisbane.

Under the current activity test, a child could only receive a taxpayer-funded place in childcare for three days a week if their parent or guardian was in work, study or volunteered for eight to 16 hours a fortnight.

The Productivity Commission recommended this requirement be scrapped earlier this year after finding it was not effectively incentivising families to enter the workforce, and instead blocked thousands of kids from the benefits of early education.

Labor’s changes will guarantee three days of subsidised care for every family earning up to $530,000, with parents who work, study or volunteer 48 hours or more a fortnight able to access up to five days.

Speaking on Wednesday, Mr Albanese will renew Labor’s ambition to “build a universal child care system,” adding this “doesn’t mean compulsory or mandatory”.

“The choice will be up to parents,” he will say.

“But … we want to make sure that your decision isn’t dictated by where you live, or what you do for a living.

“It’s driven by one thing only, what you want for your child.”

Mr Albanese will renew Labor’s ambition to “build a universal child care system,” adding this “doesn’t mean compulsory or mandatory”. Picture: NewsWire/Martin Ollman

The government’s upcoming budget is expected to show Commonwealth funding for child care subsidies is increasing by $3.1 billion over the next four years, to support an extra $200,000 children to attend early education.

The Parenthood CEO Georgie Dent in September backed the Productivity Commission’s recommendation to guarantee three days of subsidised care for all children.

“We support abolishing the activity test, which disadvantages single mothers, families on low-incomes, First Nations families and families from multicultural backgrounds,” Ms Dent said.

“Inquiry after inquiry has said this unfair test needs to be scrapped, and we are pleased to see the latest report from the Productivity Commission back that up.”

The Brotherhood of St. Laurence had also called for the test to be scrapped, with executive director Travers McLeod saying “what a parent does or earns should never hinder the access their child has to quality education and care in their early years”.

A 2023 report by the Women’s Economic Equality Taskforce also recommended abolishing the activity test, quoting research showing it would increase women’s workforce participation by up to 81,680 and boost GDP by $4.5bn a year.

Originally published as ALP’s pre-election pledge: $1bn for new and existing childcare centres