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Labour boasts a $9bn budget boost to childcare.

July 20, 2023

Updated: Jul 31, 2023

The Australian Labour government has unveiled its first full-year budget, featuring an additional $9 billion in childcare subsidies over four years compared to the previous Coalition government. While this move aims to alleviate the rising cost of living and benefit 1.2 million families, advocates have expressed concerns about the retention of the activity test, which reduces payments for parents working less than 15 hours a week.

The Labour government’s budget includes provisions for increased childcare subsidies, fulfilling a promise made by Anthony Albanese in his 2020 budget reply. The subsidy rates will be raised for 97% of families earning less than $530,000. Over the next four years, $55.3 billion will be allocated to childcare subsidies, with the first year alone receiving a £1.4 billion boost, bringing the total to $12.7 billion.

Family day care provides flexible, affordable and accessible education and care for families across Australia. With shorter sessions offered by 84.7% of services and longer sessions by 94%, parents can find a solution that fits their schedule. Provides a “home-based” and “family-like” environment, meeting parents’ desire for personalised care. Registering as a Family Day Care provider can be complicated; HCPA is here to guide and assist you as you navigate the family daycare sphere.

Advocates from the Minderoo Foundation’s Thrive by Five campaign have voiced apprehension about the absence of plans to abolish the activity test in the budget. The estimated cost of removing this test alone is $1.3 billion for the fiscal year 2023-24. The activity test reduces childcare subsidies when one parent works less than 15 hours per week, resulting in many children from low-income households missing out on early childhood education.

The women’s economic equality task force and the financial inclusion advisory committee have urged the Albanese government to eliminate the activity test. They argue that the test hinders economic inclusion, particularly for women, and causes additional hardships and disadvantages for children. Advocates are making a final push to convince the government to scrap the test before the budget is finalised on 9th May.

The Albanese government has promised a “significant response” to the committee’s recommendations in the budget. However, it has yet to indicate whether individual suggestions will be implemented. While the government aims to ease the cost of living for families without contributing to inflation, it remains to be seen how it will address the concerns regarding the test’s impact on childcare subsidies.

The treasurer, Jim Chalmers, emphasises the significance of making childcare more affordable to alleviate the financial burden on working Australians. Parents are better positioned to return to work or increase their working hours by reducing childcare costs. The ministers for early childhood education and education, Jason Clare and Anne Aly, highlight early childhood education’s positive long-term outcomes, such as improved literacy and numeracy skills, better health, and higher-paying job prospects.

HCPA currently supports a range of childcare businesses in supporting Australian families. As the Albanese government introduces a budget with $9 billion in additional childcare subsidies over four years, families across Australia stand to benefit. However, concerns persist about the retention of the activity test, which could hinder access to early childhood education for children from low-income households. The government’s response to calls for the removal of the test will be closely scrutinised as advocates strive to ensure equitable childcare provisions for all families.

Join the growing early childhood community and positively impact the younger generation and their families. Contact us here to learn more about how we can support you on this exciting journey.

SOURCES | The Guardian ‘Labor boasts $9bn budget boost to childcare but advocates fear activity test will remain.’|

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