Free childcare on the cards under Medicare-style plan

Parents will pocket higher childcare subsidies next week as governments slash daycare costs – with a long-term plan to make early childhood education both free and guaranteed.

Queensland Education Minister Grace Grace tours The Learning Sanctuary, Brisbane. Picture: Liam Kidston

Childcare will become a free essential service like Medicare under long-term reforms planned by the Albanese government.

Federal Education Minister Jason Clare revealed the strategy ahead of a report into childcare costs by the Australian Competition and Consumer Commission (ACCC).

He said that higher childcare subsidies. to be paid from Saturday, are “just the start’’ of the government’s reform agenda.

Mr Clare said Prime Minister Anthony Albanese wanted to build a universal early education system in parallel to the free health system offered under Medicare.

“You don’t have to rely on your credit card to get good access to health care,’’ Mr Clare said.

“It’s that green (Medicare) card in your purse or in your wallet.

“Just like we’ve got a universal retirement system called superannuation, one of the legacies he wants to leave is a universal early education system.’’

Cheaper childcare will benefit 1.2 million families under changes to the child care subsidy starting on July 1.

A family earning $120,000 a year with one child in care will save about $1700 in out-of-pocket fees.

For families earning $80,000 or less, the government will cover 90 per cent of childcare fees.

For those with more than one child in care, the subsidy will increase to 95 per cent for second and subsequent children.

Mr Clare said the change was a “practical measure that is good for children, good for parents and good for the country’’.

“Apart from the mortgage or rent, child care is the biggest bill that a lot of Australian families have to pay,’’ he said.

“Early education is expensive … it’s gone up by 49 per cent over the last 10 years.

“If you can make it cheaper, that means more money in the pockets of parents and it also gives parents the opportunity to work more hours if they want to.

“We’ve got a skills shortage crisis in this country but if you can get people who are already skilled up back to work, then that’s good for businesses as well.’’

Federal Education Minister Jason Clare jokes with children at The Learning Sanctuary, Brisbane. Picture: Liam Kidston

Mr Clare said further changes would flow from the ACCC investigation into childcare costs, which is due to report to Treasurer Jim Chalmers this week, and a Productivity Commission inquiry looking at how a universal childcare system could be created from the mishmash of private, charitable and council-run centres.

But he refused to say if the federal government will support a union demand for a 25 per cent pay rise, which will be heard by the Fair Work Commission this year.

The government set a precedent when it fully funded a 15 per cent pay rise granted to aged care workers this year.

The Australian Childcare Alliance, representing daycare centres, has warned that families could be slugged with an extra $30 a week in out-of-pocket costs to cover the wage rise unless taxpayers pay for it directly.

Mr Clare said the government had agreed to take part in the Fair Work Commission hearing but “it’s not appropriate for me to pre-empt that process’’.

He was commenting at the launch of Queensland’s free kindergarten initiative in Brisbane yesterday.

Queensland Education Minister Grace Grace said families would save an average of $4600 per year through 15 hours a week of free education in daycare centres or preschools for every child in the year before starting school, starting next year, regardless of parental income or work status.

“Free kindy will put money back into the pockets of families at a time we know people are doing it tough, and help give every child a great start in life,’’ she said.

“We can’t wait for the savings to go to families – they are doing it tough at the moment and we know the cost of living is pressuring a lot of families.’’