Labor banking on re-election with childcare sweeteners to make it cheaper for households
Labor plans to build more childcare centres for those in need, and it is banking on other sweeteners to make it easier for parents to access cheaper childcare.
Federal Budget
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It was a pledge from late 2024, but if Labor wins the election it will scrap the activity test to make it easier for parents to access cheaper childcare.
It will mean families will be eligible for at least three days of subsidised early education and care from January 1, 2026, irrespective of whether they are studying or working.
At the moment, parents have to do the activity test, which works out how many hours of subsidies they are eligible for, depending on the number of hours they work or study.
Benjamin Balk, Director of Kindicare, a childcare comparison app, said removing the activity test will open up early education to more kids from low income families.
“So the Cheaper Childcare plan has improved outcomes. The activity test will further improve accessibility, particularly for disadvantaged families,” Mr Balk said.
However, he said parents were still struggling to pay for childcare due to the cost of living crisis and were therefore, looking at different options including the grandparents for childcare.
“Because of mortgage rates, because of inflation, because of electricity, and now Trump’s trade war, you know, all these costs flow through to parents,” Mr Balk said. “And so, the softening that we’re seeing in demand isn’t because Labor hasn’t made child care cheaper or more accessible to families. It’s that because of all the other household costs they literally can’t afford it.”
The Parenthood CEO, Georgie Dent, said she wanted to see a cap on fees.
“Childcare costs have risen four times faster than the overall rate of inflation and now account for the second-largest budget item for families with young children – surpassed only by housing costs,” Ms Dent said.
“The current funding model, which subsidises for-profit providers while allowing them to charge exorbitant fees, must be overhauled.”
She said she supported a $10 a day fee cap.
Mr Balk argued that limiting fees could put providers at risk, especially as those who had accepted subsidies from the Government to help pay the 15 per cent staff wage increases, had to agree to a 4.4 per cent fee cap for two years.
The Albanese Government also allocated $1 billion in the Budget to build more child care centres where there needed most, which is mainly in regional and rural areas.
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Originally published as Labor banking on re-election with childcare sweeteners to make it cheaper for households
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