Families earning up to $530,000 a year would be guaranteed three days of subsidised childcare per week without being subject to the controversial “activity test”, under a new plan unveiled today.
The new policy will be introduced by the Albanese Government if it is re-elected in 2025 and could bring Australia one step closer to universal access to childcare, something Anthony Albanese has said he wishes to be the legacy he leaves behind as Prime Minister.
Under the proposed plan announced on Wednesday, parents who earn up to $530,000 a year will be eligible for childcare subsidies for up to three days a week.
Current childcare subsidies are distributed to parents based on an activity test through Services Australia, where the number of hours a parent is active – working, volunteering or completing other recognised activities – affects the amount of the subsidy the parent is eligible to receive.
According to estimates from The Parenthood, the activity test, which was established in 2018, leaves about 160,000 children missing out on early childhood education.
After years of advocacy calling on the government to scrap it, Prime Minister Albanese has confirmed the abolition of the activity test.
“The only thing (the activity test) does is put extra weight on the shoulders of parents who are already doing the hard yards of looking for work while locking their children out of early education,” the Prime Minister will say in one of his final addresses for 2024.
“Too often, the children missing out on early education are the ones for whom it would make the biggest difference. Instead, by the time they start school, they’re already on the back foot.”
Albanese will explain that the new plan, announced just before the end of the year, will make childcare “affordable for every family, funded for every child”.
“I know this for certain: parents do not need to work a certain number of hours a week to want the best possible education for their child,” the Prime Minister will say.
“The aspiration to give your children the best change in life drives every parent whoever you are and wherever you live.
“Early education isn’t a luxury parents have to prove they need. We know early education is an opportunity every child deserves.”
The Prime Minister’s announcement also aligns with findings and recommendations from the Productivity Commission’s report released in September, based on its inquiry into Australia’s early childhood education and care (ECEC) sector.
The report made 56 recommendations, including calling on the Australian government to establish a system where every child in Australia aged 0-5 has access to high-quality ECEC for a minimum of 30 hours a week – or three days a week – for 48 weeks of the year.
‘Seismic victory’
Georgie Dent, CEO of The Parenthood, has been central in advocacy for a better and more accessible childcare and early childhood education system in the country.
Dent said the government’s announcement today is a win for children, equity and the entire nation.
“The Activity Test is one of the most significant obstacles to universal access to early childhood education and care in the country and has been particularly detrimental to First Nations families as well as children from low-income and disadvantaged households,” Dent said.
“We wouldn’t dream of blocking a child from participating in primary school if their parents didn’t work certain hours and we shouldn’t accept that in the early years either.
“Winding back the Activity Test represents a paradigm shift in which we recognise that early childhood education and care is a critical component of our education system and that the entitlement to participate sits with the child – not a parent.”
According to The Parenthood, Dent said the activity test has been disproportionately locking out disadvantaged communities and households in Australia, especially First Nations children, who are “most likely to benefit the most from early learning, yet are currently least likely to participate”.
“This was a wicked problem clearly articulated by the Productivity Commission in its recent major review of the sector,” Dent said.
“Children who attend high quality early learning are more likely to arrive at school developmentally on track than children who don’t. The Activity Test has stood in the way of too many children having that opportunity and we welcome its removal.”
What will the Opposition say?
Dent and The Parenthood have called on the Opposition to match the commitment.
The timing of Albanese’s policy announcement comes just months out from an election next year. While Albanese’s government has been strongfooted on ECEC – including the recent 15 per cent pay rise for ECEC workers – the Coalition have been less so.
Opposition leader Peter Dutton recently described the pay rise for ECEC workers as a “sugar hit”, and referenced a comment made by former Liberal turned independent Senator Gerard Rennick, who said early education “destroys the family unit”.
Prime Minister Anthony Albanese will use this policy announcement to distance himself and his government from the direction of the Liberal party.
“The Liberals might treat early education like a luxury parents have to prove they need. We know early education is an opportunity every child deserves,” Albanese said.
“Another day and another issue where the Liberals are not just stuck in the past, they are trying to drag the rest of Australia back there to keep them company.”