Anne Aly (Cowan, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

I move:

That the bill be now read a second time.

It is my privilege to introduce the Early Childhood Education and Care (Three Day Guarantee) Bill 2025.

On coming to government, we started a journey towards a universal early learning system that was simple, affordable and accessible for every family.

This three-day guarantee is a critical step on that journey.

We came into government in 2022 with a commitment to make early childhood education and care more affordable through our cheaper childcare programs.

We quickly turned that commitment into progress with more than a million families benefiting from these changes.

Recent data shows that an Australian family on an income of $120,000 a year paying the average quarterly fee for 30 hours child care per week has saved approximately $2,768 since September 2023.

We also commissioned the Australian Competition and Consumer Commission and the Productivity Commission to each do a review, providing guidance on how we can achieve our vision of a universal early learning system, a system where every child, no matter who they are, no matter their background and no matter where they live, has access to quality early childhood education and care.

The Productivity Commission inquiry in its interim report told us that the early childhood education workforce should be the first priority for reform, including through better pay and conditions. The Productivity Commission made it crystal clear that the workforce is fundamental in addressing any changes in availability.

We acted. Last year we passed our Wage Justice for Early Childhood Educators Act, supporting a 15 per cent pay rise for early childhood education and care workers increasing the wages of up to 200,000 early educators.

'Significant, momentous, historic, a monumental moment', 'proof that early learning matters' and 'life changing'—these are just some of the descriptive words that early childhood education advocates and workers have used to describe this government's 15 per cent wage increase.

We know that the foundation of a universal systems relies on a stable, secure and valued workforce. This wage rise will help achieve that, by retaining our existing early childhood educators and attracting new workers to the sector.

Recent Jobs and Skills Australia data indicates that workforce vacancy rates in the early childhood education and care sector having plummeted over the last 12 months, with internet vacancy rates down 22 per cent since December 2023.

That's not all—the wage rise is linked to caps on fees. For providers to be eligible, they must not increase their fees by 4.4 per cent in the first year and 4.2 per cent in the second year. This is putting wages up for workers and keeping costs down for families.

Over the last 2½ years, we have made significant progress in building these foundations for a universal early childhood education and care system.

But we know there is still more work to do.

The Australian Competition and Consumer Commission inquiry recommended that government consider 'removing, relaxing or substantially reconfiguring the current activity test'.

In their final report, the Productivity Commission recommended that all families who choose to use early childhood education and care should be able to access at least 30 hours or three days a week of high-quality early learning.

The Productivity Commission noted that ensuring 'that all children aged zero to five years have access to some form of high-quality subsidised ECEC for at least three days a week (30 hours) for 48 weeks per year would accommodate the needs of families and the benefits for children from ECEC participation'.

The government is again acting in introducing the Early Childhood Education and Care (Three Day Guarantee) Bill, guaranteeing families at least 72 hours of subsidised care per fortnight.

The three-day guarantee is about making sure that every child can have the best start in life—that all children are ready to learn, and ready to start school.

It is about making sure that every child no matter their background and no matter where they live, has access to the transformative benefits of early childhood education and care.

We know how precious the first five years of a child's life are; it is a time of extraordinary growth, of emotional and intellectual development. In these years, children learn foundational skills, learn to socialise, and develop emotional skills that they then build on when they start school.

Replacing the Liberals' activity test, which locked out children and families, with Labor's three-day guarantee is such a crucial step in delivering on our commitment to universal early learning.

When the Liberals introduced the childcare subsidy activity test in 2018 they stated it was designed to encourage workforce participation.

But as Thrive by Five's Jay Weatherill states: 'The activity test was intended to encourage parents into work but in fact it has done the opposite. It has limited choices and made it harder for parents—especially single parents—to make an income.'

An evaluation by the Australian Institute of Family Studies found no evidence that the introduction of the activity test caused any increase in workforce participation.

And the Productivity Commission found that the effects of the activity test on workforce participation were ambiguous.

Instead, the activity test has made early learning harder to access for many families, including disproportionately affecting those families that may be experiencing disadvantage.

Families and advocates echoed these sentiments. Georgie Dent, CEO of the Parenthood, described the current activity test as 'a barrier that disproportionately locks out children who stand to benefit the most from participating in quality early childhood education and care'.

The children who benefit the most from high-quality early education and care but right now, they're the least likely to attend.

In 2021, only 54 per cent of children in the most disadvantaged areas were enrolled in early childhood education and care. This compared with 76 per cent of children in the highest socioeconomic areas.

These same children are more likely to be developmentally vulnerable. The most recent Australian Early Development Census report found only 42.7 per cent of children experiencing the highest level of socioeconomic disadvantage were developmentally on track upon starting school, compared with 54.8 per cent of all children.

That's why the three-day guarantee is so important. High-quality education and care provides the opportunity to improve a child's lifelong trajectory. It should be an accessible, affordable option for every family, especially disadvantaged families. There should be no barriers.

This legislation will mean real cost-of-living relief for 66,700 families, in the first year alone. Families will save an average of $1,370 per year and about half of these families earn less than $100,000 per year. Lower-income families will save more, an average of $1,460 per year.

This bill also means that over 100,000 families can get more subsidised hours of early childhood education and care.

This is helping parents get back into the workforce and giving meaningful support to families struggling with the cost of living.

This bill also provides more support for families with First Nations children. We have already introduced changes that provide these families at least 36 hours of subsidised care per fortnight. This bill will raise that to 100 hours.

These changes are based on robust consultation with First Nations communities and organisations, and it's based on the evidence.

Currently, only 34 per cent of First Nations children are developmentally on track when they start school. Our changes will make high quality and culturally responsive early childhood education and care more accessible for First Nations children.

This will have life changing effects on First nations children and their families, SNAICC CEO Catherine Liddle has said:

This can be a game-changer for our babies. It will mean more children are developmentally ready for school, setting them up for a thriving future.

It is a significant commitment towards closing the gap.

At the same time, the three-day guarantee retains a participation requirement for families to access 100 subsidised hours. We're taking responsible steps to manage demand for places and ensuring people who need a place because they're working or studying can find one.

We know that the market has failed to provide access to early childhood education and care for children in the regions, for children in the suburbs and for children in vulnerable communities.

That is why we have also announced the Building Early Education Fund—building the centres and services to put us on a path to make sure that every single Australian child can access early childhood education and care in in the outer suburbs and regional Australia where families struggle to find a place.

We're also developing an early education service delivery price to better understand the cost of delivering services around the country and underpin future reform.

Because our Labor Government believes every child should have the right to quality, affordable early education.

That's why we want to build a universal early education system. Simple, affordable, and accessible, for every family. Where every child is guaranteed access to at least three days of high-quality early childhood education and care.

The bill I am tabling today plays a significant part in realising this future.

This bill makes amendments to the A New Tax System (Family Assistance) Act 1999,and the A New Tax System (Family Assistance) (Administration) Act 1999, which are the two key acts that determine families' fortnightly entitlements to childcare subsidy.

The amendments in schedule 1 of the bill will replace the current childcare subsidy activity test and provide a guaranteed minimum of 72 hours per fortnight of subsidised early childhood education, regardless of the time spent in recognised participation types, and a guaranteed 100-hour entitlement per fortnight for parents caring for an Aboriginal or Torres Strait Islander child.

The bill includes other technical changes to reflect the language of the three-day guarantee and provides application, saving and transitional provisions to ensure that the amendments apply to sessions of care provided to a child in a childcare subsidy fortnight that starts on or after the commencement of the bill, to ensure that amendments don't take effect midway through a childcare subsidy fortnight.

I commend this bill to the chamber.

Debate adjourned.