Three day childcare guarantee explained
The measure was originally intended to be an election promise but by introducing the legislation in what could be the final sitting weeks before the election, the government looks to be picking a fight with the Coalition over the issue.
The Albanese government will introduce legislation in the coming fortnight to scrap the activity test and instead have a new three-day a week guarantee in childcare.
The measure was originally intended to be an election promise but by introducing the legislation in what could be the final sitting weeks before the poll, the government looks to be picking a fight with the Coalition.
The Coalition has previously indicated it would not back the measure.
“Cheaper childcare” has been a common refrain of Labor frontbenchers in their re-election pitch.
What the plan entails
Early Childhood Education Minister Anne Aly said the policy would mean “every family, no matter what their circumstances, and every child, no matter what their background, no matter what their postcode, no matter where they live, and no matter what their parents’ circumstances are, has access to good quality early childhood education and care”.
The child care subsidy currently involves an “activity test” – the “Liberals’ activity test”, as Anthony Albanese has put it – that determines how many hours of subsidised childcare parents of young children are entitled to.
Parents must be working, on leave, doing work experience or an internship, setting up a business, volunteering, looking for work, or studying – and the hours they spend doing this per fortnight determines their subsidy level.
The Prime Minister has previously said that under his government’s three-day guarantee, this activity test would be replaced so that any family earning under $530,000 a year would have automatic access to the child care subsidy for three days a week. “That means that more than 100,000 families across Australia will have access to more subsidised care, three days a week,” Dr Aly said. “And more than 66,000 families across Australia will be better off with our three-day guarantee.
“We’re building the blocks for a future where every single Australian child and every single Australian family can have access to good quality early childhood education and care, so that parents can work if they need to work, primary caregivers – mostly mothers, mostly women – can go back to work or go back to study, and importantly ... so that our children can have that care and that education that they need to grow and to thrive.”
Universal childcare
Jim Chalmers asked the Productivity Commission to look into early childhood education and care, including a universal 90 per cent subsidy, and it reported back in the second half of 2024.
The Productivity Commission recommended that the activity test be removed and that families on less than $80,000 a year should be fully subsidised by the child care subsidy. All families with children under five should have access to at least 30 hours, or three days, of care for 48 weeks a year by 2036, the report said.
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