Families will receive up-front relief to help with childcare costs under a new coalition policy which also promises to build up to 35 centres in areas of extreme need.
Prime Minister John Howard announced the coalition's much anticipated childcare policy at the government's official campaign launch in Brisbane on Monday.
The $650 million, four-year childcare plan was part of a package of promises - including help for first home buyers and an education tax rebate - aimed squarely at young families.
Up to 500,000 families are expected to benefit from the plan to pay the 30 per cent childcare rebate up-front, rather than having to wait for the money to be handed back at tax time.
Currently parents pay the full cost of childcare and receive 30 per cent back through a rebate when they lodge their tax returns. They can claim up to a maximum of $4,354 a child each year.
If the coalition is re-elected, families will only pay 70 per cent of the cost and the federal government will cover the rest.
Mr Howard said the care of children in their early years was one of those issues that mattered most to families.
"In 2004, we introduced the childcare tax rebate to provide extra financial help for families covering 30 per cent of out-of-pocket expenses," he told the party faithful.
"We have continued to look at how we can ensure the amount of money parents have to pay up-front is reduced and so (if re-elected) ... will pay families childcare tax rebate in advance to the childcare provider."
The new initiative would take effect from April 1, next year.
Childcare Associations Australia warned that the administrative cost of the scheme could mean that parents would not necessarily see the full benefit of the policy.
"There is some concern that while the measures announced today will result in a more timely delivery of the (rebate), the administrative costs associated with this delivery will need to be absorbed at the childcare service level," CAA national president Amanda Morphett said in a statement.
Mr Howard also pledged to put more money into childcare centres, with grants of up to $1 million to local government to build new or extend existing facilities.
"We will provide capital funding to local governments of up to $1 million to build or extend childcare centres in the areas where there are no vacancies," he said.
The money will be directed at 35 areas across Australia which, over a six-month period, reported no childcare vacancies.
Opposition families spokeswoman Jenny Macklin said the coalition plan fell far short of what Labor was offering.
In addition, the government had consistently denied there was a crisis.
"Mr Howard announced a change of timing for the existing 30 per cent Child Care Tax Rebate and a handful of new childcare centres," Ms Macklin said in a statement.
"(It) falls far short of federal Labor's comprehensive plan on childcare affordability and does not put an extra cent into parents' pockets."
Labor has put forward a $1.5 billion policy which includes lifting the rebate to 50 per cent a year, with a $7,500 annual cap, and up to 260 new childcare centres in areas of need.