Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

The Early Childhood Education and Care (Three Day Guarantee) Bill 2025 is an important bill in terms of finally assisting young families in juggling those commitments of parenting, children and working. Support for our working families leads to stronger outcomes for the economy and our community.

The decision about whether to return to work or take more time off to care for a child is a decision that all new parents must face, and all too often women are left with that responsibility. That needs to change. Men and other parents and partners must shoulder more of that proportion and responsibility. Of course, there are trade-offs when that choice of either staying home or going back to work has to be made, whether they be financial or emotional, because none of these choices are easy. I've spoken to many young parents, especially women, across my electorate who rely on many different types of care, from private and public child care to relying on family, to help juggle the demands of working life and the exorbitant cost of accessing child care.

I've been there personally and I understand how incredibly hard and expensive it is. As a barrister and as a sole trader, I didn't get access to any of that assistance. It was a juggle between local childcare centres and my parents assisting me a number of days a week, and I often had to juggle leaving court and leaving chambers early because of the crazy closure times and the penalty rates that apply if you're five minutes late picking your kids up from the childcare centre. It's incredibly hard, and all too often the decks are stacked against women because all too often women are left to shoulder this responsibility. My call-out to men is: it is good for your relationship with your children to spend more time with them. The responsibility of caring should not fall on mothers; it has to fall equally on all parents. It is good for your relationship with your children and for our economy and our society because it means everyone has the opportunity to participate.

All too often for women, the frustration of wanting to go back to work but being penalised by a reduced eligibility to claim days in child care—you have this penalty cliff at which there is a point you are working to pay for it rather than working to get ahead. That is just wrong. Women juggling commitments need to feel supported by the community and our broader society. Parents need to feel supported. This is an essential part of Australia moving forward—being able to have that juggle of family, children and work and progressing careers.

Of course, support comes in many ways, through the childcare system, family support and a broader understanding of the pressure on working parents. The call for universal child care holds significant benefits for our children, and, far too often, it has quite insultingly been pitched as something that is given to women. With respect to every member, it is something given to our society, because we go nowhere unless we have children and we go nowhere unless everyone in our society has the opportunity to work and to contribute and has that equal opportunity to do those things. So universal child care holds significant benefits for our children, our community, our economy and our society.

Of course, for children, it also provides the best opportunity to be happy, safe and secure and it builds the necessary foundations and skills that children need throughout their life, especially when they then enter schooling. It's incredibly important that all children have the opportunity to access that early childcare experience. It's particularly impactful that children who come from disadvantaged backgrounds are able to get into those opportunities. So I very much support the implementation of full, universal access to child care for this minimum of three days, and this bill is a welcome start.

The bill is being introduced because the activity test is broken. The childcare subsidy does not provide an adequate safety net for working families. We have the second-highest childcare costs in OECD countries. It is prohibitively expensive, and, whilst there are childcare deserts and a lack of availability in regional communities, the cost in urban communities is exorbitant. My community would have to have one of the highest costs when it comes to child care. Australian families spend about 27 per cent of their income—that's nearly a third—on child care, compared to the OECD average of 14.5 per cent.

The Productivity Commission's report on universal child care found that 328,000 parents were not entering the workforce due to the affordability and availability of child care. We hear a lot in this place about staffing shortages and skills shortages. You can point to and blame immigration and do all those things, but, ultimately, the first and best thing we can do is utilise, to the best and the fullest capacity, our current population, making sure everyone in our communities now have that equal opportunity to participate. If you think about it, 328,000 parents are not entering the workforce due to the affordability and the availability of child care. So this bill goes some way to fixing that, and I welcome it.

The activity test introduced by the previous government in 2018, designed to encourage workforce participation, was shown not to work. The test is used to determine how much care subsidy a family can receive, but it's linked to hours a parent is working or a parent is volunteering, job hunting, on leave or studying, and it has been heavily criticised, because, unfortunately, it has not resulted in increased workforce participation. In fact, it has disincentivised workforce participation. The Australian Institute of Family Studies's evaluation found no evidence that the activity test caused any increase in workforce participation; instead, it is most likely to hurt lower income families and discourage use of access of early childhood education for their children.

The Productivity Commission, the Thrive by Five campaign and the Parenthood group all have done phenomenal work in raising this issue. This is not a women's issue; this will be a society issue and an economy issue unless we can all participate. It is very good to now be looking at this activity test and getting rid of it. It's too convoluted and difficult to understand. As it was, the subsidy didn't increase enough to cover the added cost of child care as a parent increased their working commitments. Too often parents, usually women, were left to work part time because the cost of going full time or increasing their days was simply too prohibitive. That has so many knock-on effects. It means that women may stay on part-time or casual contracts instead of going into permanent employment. It means that they are not accumulating the same amount of super. It means they are not eligible for the same promotions. You then see that pay gap and that opportunity gap widen.

The focus on the parents in that activity test does not provide an opportunity to allow all children to have the best opportunity to thrive. In fact, families have been found to deliberately keep their hours low enough to receive support. Alarmingly the Productivity Commission found that 70 per cent of sole parents and secondary earners have reduced their hours due to the reduction of childcare subsidies. If there was ever a counterproductive measure, this would have to be it! The ACCC found that families on a lower income spend a greater share of disposable income on child care and are disproportionately impacted by the childcare subsidy activity test. The impact is that some 126,000 children from the poorest households across Australia have missed out on early childhood education, and, unfortunately, that missing out is compounded over the years, and it makes a difference.

This bill reforms the activity test to ensure that families who earn less than $530,000 per year will be guaranteed access to at least three days a week, or 72 hours per fortnight, of subsidised child care. According to the Department of Education, households earning between $50,000 and $100,000 per year will save around $15,000 a year. This is really significant. It provides a guaranteed 100-hour entitlement per fortnight for parents caring for an Aboriginal and Torres Strait Islander child. And I welcome that additional provision for First Nations Australians.

It's a high-stakes road map; there is no doubt. The bill presents an opportunity to improve gender equity by providing more choice between increasing caring responsibility and entering the workforce. It's a first step to make universal child care available for all Australian families. Better access to affordable child care leads to additional hours of work by more parents joining the workforce. It's estimated that the taxation uplift will actually be in the order of some $292 million, and it will increase Australia's GDP by some $6 billion. So I dare anyone in this place to oppose the bill and say that somehow this is not a good measure.

The bill presents an opportunity for children to access high-quality child care that will set them on the right path. Now, of course, this only works if we couple this with a measure to make sure child care is available in all communities in Australia. I've heard many from the opposition, in their speeches, talk about the childcare deserts. That does not warrant opposing this bill. It means go to the table, sit down with the government. You find ways to do it on other issues, so sit down and work out how we can roll out childcare centres so they are available in every community in Australia. Pointing at the lack of availability is not a reason to not support making it available and more affordable to all. It's so important.

I've spoken many times in this place about the need to help women participate equally in work and strengthen our gender equity, including in our superannuation laws and paid parental scheme. For me, this campaign to increase the childcare subsidy to provide more support for working families is essential. That's why it is so important to be committed to having more voices in this place, more diversity. Especially, it is about having more women's voices in this place—to make sure that these issues are not pigeonholed but are put front and centre of good economic management.

This bill is welcome, but more can be done. The activity test still needs reforming. I think we need to remove the activity test completely to ensure greater universal childcare access. The affordability is one piece of the puzzle, but it doesn't work without access to high-quality childcare centres. So, as I said, we need to do more about this. During the break, the government committed to funding and constructing more. They have committed to 160 centres. Unfortunately, I remember at the time there was a media outcry about the scale of that spend. Well, you can't come into this place and complain about the lack of availability, oppose the measure to build and support more child care and then also oppose making it more affordable for families. And you can't then go out to communities and say you're somehow in this place fighting for families.

I support the government on this issue. We need to do more to make sure that there are more centres built and, in particular, that regional and rural Australia has access to child care. Victoria University has done a study which shows that 24 per cent of Australians live where there is a lack of childcare availability. There are more than three children for each childcare spot. So it's slightly better than in 2020, when it was 34 per cent, but it shows that there's still a lot to do; there is so much more that needs to be done.

Yes, I represent an urban community, but I am acutely aware that child care needs to be available to all Australians. All communities need to have access to quality child care so that all Australian children have that opportunity to develop. So I encourage the government to consider incentives to increase availability of high-quality education and early learning, such as rewarding centres if they meet or exceed national quality standards. We need to make sure there are incentives.

Of course, we have labour shortages, so the question will be whether we have enough people to staff these centres. So, again, it's making sure qualified staff are available. We know that they're struggling to find qualified staff, and it's putting extra pressure on families as centres cap the number of places due to staffing shortages. Now, of course, that is linked to wages and whether or not it's an attractive career pathway. Median wages for early childhood teachers are about 20 per cent lower than those of primary school teachers. They have poorer working conditions, fewer leave days and greater workplace pressures. More than half of graduates of early childhood education degrees choose employment in primary school, so clearly we still do not have parity across these education sectors and we are picking and choosing which ones we value. We need to do better to make sure that the entire pathway is supported and equitable.

The government's commitment to early childhood education is welcome, but, as I said, more can be done. So it comes again to that coordination piece at the state and territory and federal levels to improve the recruitment and retention of early childhood educators: removing unnecessary workforce barriers, such as moving between state and territory jurisdictions; improving opportunities for career development, such as early career support and mentoring programs; and, of course, wage increases.

So I welcome this legislation. It is an essential part of us having an equitable society where men and women—all parents—have the opportunity to juggle the responsibility of parenting with working and making a financial contribution by being in paid employment. It is so important that early child care be available. Ultimately, it is a key to us having a smart next generation. We know that the data shows that engagement in early child care helps development and improves learning outcomes as children go on to primary school.

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

I want to acknowledge the contribution that the member for Warringah just made, echoing that belief that there is a fundamental good for society in having every young child given the opportunity to have quality early education. I think back to what it was like to be a mum with little kids. It was a long time ago. It's more than 30 years ago. It was during the recession we had to have. It was a tough time economically, and the cost of child care even back then was something that weighed on you. But, as we know, it's gotten tougher. I see my children's generations really struggling to work full time—or part time, if they can afford it—and balance the budget with their childcare costs. We need to say to those young people now: We realise that it's tough. These have been difficult economic times.

On top of that, those young people are probably at the hardest stage of their lives, with the biggest calls on their time, their funds and their energy. That's what this is tackling. It's about recognising the challenges—challenges that got harder because of the previous government. When the Liberals were in government they created a bigger problem here, and that's where I want to start, in talking about the Early Childhood Education and Care (Three Day Guarantee) Bill 2025.

When the former Liberal government introduced the activity test in July 2018, they promised that it was about enabling and encouraging greater workforce participation and simplifying childcare payments. Instead, what it actually did was to create new barriers to workforce participation for parents. It made the childcare system more complicated for their families. It made it harder for families to access early childhood education, especially for those with children who are likely to benefit from it the most. That's the appalling consequence of what happened. And it had multiple other consequences. We've seen a massive increase in grandparents looking after grandchildren to try to help ease the costs because parents aren't able to access the number of subsidised hours of care that would make it accessible.

That 2018 childcare package halved the number of subsidised hours of care that low-income families could access. It went from 48 hours a fortnight to 24 hours, essentially one day a week. Data from the Department of Education shows that the number of children from low-income families who accessed care went from 32,000 in 2018 to around 6½ thousand in 2019. That suggests that without that extra help many low-income families simply dropped out of early education. There's a whole generation of toddlers who missed out because of the Liberal Party's decision. That is unacceptable.

The Australian Institute of Family Studies reviewed the Liberals' childcare reforms back in 2021 and gave them the advice that the small increase in parents' employment since 2018 was consistent with ongoing trends around the world in workforce participation and couldn't be linked to their reforms. The Liberals probably wished they hadn't been given that advice. They certainly didn't take note of that advice, and they maintained their policy settings.

The Australian Institute of Family Studies found that detailed activity testing was making the system more difficult to navigate—and it is not a simple system; it never was. Even back in my day it was complicated and confusing. When you're a young mum with young kids, the system is even more challenging to try and get your head around when there's so much else going on. When you're trying to get out the door in the morning with the kids while you're on your way to work, that's really the focus of the way you start each day.

The Institute of Family Studies also found that children in low-income families who didn't meet the activity test were not getting enough access to early childhood education. These were the children who, as we all know, often need it the most—not always, but often. When you look at the consequences of that down the line, you see that when kids get to primary school—in New South Wales in their first year they do kindergarten—if they haven't had that early learning there are big differences within that class. This means big challenges for teachers, who of course do an extraordinary job in our schools to cater for it. It's actually a benefit to every parent of a child in those first years of school to have all the other kids having had a fantastic quality early childhood education background.

All of this is backed by research. This is not just something where we say, 'I've been a mum and I know.' The analysis by the Institute of Family Studies has been backed in multiple ways, and I want to quote Dr Angela Jackson and Impact Economics, which found:

The current activity test—

and this is talking about the Liberals' activity test—

for the Child Care Subsidy limits access to subsidised child care and is contributing to … children from the poorest households missing out on critical early childhood education and care. As a result, these children are more likely to start school behind their peers, with many never catching up.

And these are choices that the Liberals made, choices that have consequences for kids who are now in school. They have consequences for our system now and in years to come. That's why this reform is so important.

The three-day guarantee is about making sure that every family and every child can access subsidised early learning. We want to make sure every single child gets the best possible start in life. They have a right to go to early education, to help make sure they don't start school behind other kids. This Labor government is going to make sure that is possible.

This bill replaces the activity test, and the three-day guarantee will essentially increase entitlements for more than 100,000 families, with more than 66,000 families expected to be better off in the first full financial year of the implementation of this policy and no families worse off. This reform is part of our next steps to continue building a universal early education and care system where we see expanding access to quality care across the country. It obviously builds on cheaper child care, which cuts the cost of early education and care for around a million families. It also builds on our efforts to get a 15 per cent pay rise for early educators. It's part of a package that establishes a $1 billion Building Early Education Fund to build and expand childcare centres in areas of need, including the outer suburbs and regions.

That brings a big smile to my face because, as someone who represents an outer suburb and region—the Hawkesbury, the Plains and the Blue Mountains—we really need help getting access to childcare places. I know mums who can't work or who can only work a small amount of time but not the amount they'd like. That's because we are one of those deserts where the actions of the previous government did nothing to help increase access to early education. It's the height of hypocrisy for those opposite to now suddenly discover that there are problems and a bit tricky to get childcare places if you're a new mum. This has been going on for years, and, under their watch, they did absolutely nothing. They chose to ignore it completely.

The Building Early Education Fund is going to include $500 million in targeted capital grant rounds focused on quality, not-for-profit early childhood education and care providers and state and local governments to establish new services and increase the capacity of existing services. Grants will be targeted—as Labor always does—to priority and underserved markets, including regional locations and outer suburbs. I certainly know I am advocating hard for my community on these matters.

That's how this piece of legislation fits into a bigger picture. It's not a one-off—let's just do this and give it a tick, and that'll fix everything. We recognise the breadth of work there is to do. I acknowledge in the chamber the Minister for Education, who, along with his assistant minister, works so hard to ensure that we have an education system that will have universal access and treats people across Australia with dignity and respect and recognises that it's not just those who live in posh parts of cities who deserve the best; it's everybody.

The key to this legislation is that all families will be guaranteed three days, 72 hours, of childcare subsidy each fortnight. Families caring for First Nations children will be guaranteed 100 hours each fortnight. Families who work, study or train will continue to be eligible for 100 hours of subsidised care each fortnight. This is a fundamental difference to the existing status quo. To those who argue that this is something we can't afford to do: this is something we can't afford not to do. The benefits of educating children early in a quality way flow through their entire lives. The benefits flow through to the rest of society. These are things that people will look back on and say, 'That was transformational.' This legislation will also help with cost-of-living pressures. Our whole focus has been on trying to alleviate cost-of-living pressures wherever we can.

The cheaper childcare reforms cut the cost of child care by about 17 per cent for the typical family—that's more than a million families receiving about 17 per cent relief. Today, the average out-of-pocket costs for early education and care are not only lower than before cheaper child care came in but lower than they were when the former Liberal government introduced the childcare subsidy in 2018. This is significant for families. Our three-day guarantee will deliver additional cost-of-living relief for more than 66,000 families after the changes commence in January 2026. As an example, families earning from $50,000 to $100,000 will be better off under the three-day guarantee to the tune of about, on average, $1,460 a year, so I'm very pleased to be here to talk about these changes. The regime that we are replacing has been described by Jay Weatherill from the Minderoo Foundation as 'punitive and unfair'. We are making this fairer. We're not punishing families and particularly not punishing children for the circumstances that they are in.

I want to leave you with some of the words of those who know this sector way better than me. I come to it as a parent, and hopefully grandparent, not only thinking about how my children might interact with this system but watching my many friends' children coming to grips with how they navigate work, child care and early education. Dr Ros Baxter, the CEO of Goodstart, who knows a thing or two about child care, says:

This will change lives. It will boost our nation's productivity, ensuring Australia's children don't fall behind. And it will support more parents into work, study and training.

That's the change we make. Georgie Dent, the CEO of The Parenthood, someone who speaks to many families and particularly to women, describes the 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'. She says:

The evidence shows the main people who will benefit from scrapping the Activity Test are single mothers and their children, First Nations families and casual and shift workers.

So I'm very proud that this policy change to bring affordable, accessible and quality child care within the reach of more people is going through this parliament, and I would really urge those opposite to support it. There's nothing better that we can do than invest in our young people. We all know that investing in things that prevent problems down the track is such a better use of taxpayer dollars than dealing with issues later down the track. This is exactly what this bill will do. It will ease things for families, and I commend it to the House.

Allegra Spender (Wentworth, Independent) Share this | Link to this | Hansard source

Early education is absolutely critical to Australian families and to Australian children. Having accessible and affordable early childhood education makes a massive difference, a huge difference, to community members and their families and certainly to people in Wentworth. Affordable and high-quality child care allows parents, particularly women, to return to the workforce, contribute to the economy and boost productivity. As someone who at some stage of my life was dropping off three children at the same time to my local early education child care up in Paddington, I couldn't have done it without them. The confidence with which I could drop off my children, knowing they would have a day of fulfilment, would be safe and would be learning, and with which I could then go and do my job—which I loved—was not only integral to my mental health and to my ability to pay the bills but also to the lives of my kids.

Research from the University of Chicago and Stanford estimated that between 20 per cent and 40 per cent of our rise in living standards since the 1960s has been a direct result of increased female workforce participation. So much of that has been about how our children can be looked after. But let's not forget the demonstrable impact that great, high-quality early childhood education has on kids, because you see that from children participating in child care. The first years of a child's life are about setting them up for success, and, if they have access to high-quality child care, it improves language, motor skills and social skills during this critical time of their lives.

This bill makes an important contribution to our childcare system by modifying the flawed activity test that determines the number of hours of subsidised child care for families based on recognised work, training or study. Under this legislation, families will have access to a guaranteed three days of care regardless of their activity. Now let's look at the context of this. This activity test was introduced in 2018, but, ever since then, the activity test has been criticised. In particular, the Productivity Commission, in its most recent report, agreed that the activity test has disproportionately impacted low-income families and kept children from disadvantaged backgrounds from fully receiving the benefits of the childcare system. Impact Economics and Policy estimates that around 126,000 children from low-income households, from the poorest households, are missing out on child care. In particular, they could find no evidence that the activity test had the effect of increasing workforce participation, which was the major argument for the activity test. In fact, research by the Economic Inclusion Advisory Committee attested the opposite: that the test complicated the system, created uncertainty around funding and impacted employment decisions, around the margins, leading to a decrease in workforce participation. I think that's the context we need to see this question in.

The activity test was there to increase workforce participation. It appears that it has done the opposite. The activity test is restricting access to high-quality early learning for kids from our most disadvantaged backgrounds. We know the numbers. We know that the kids who are most likely to be behind when they start school are those kids from the most disadvantaged backgrounds. Those are the ones we need to be investing in the most to make sure they start school with the skills that will allow them to succeed and go through the school system with those skills, and that means having great access to high-quality early childhood education. That is why the removal of the activity test is so important, and that is why I'm supporting the bill.

I do want to acknowledge that, while we are working on the childcare system in this parliament, there are some fundamental issues with the entire system. I think it is incumbent on the parliament in the next term, whatever form it takes, to really fundamentally address them.

Let's look at the numbers. Gross childcare fees in Australia are the third highest in the OECD; after the inclusion of the CCS, they are still the seventh highest. Those are the statistics. Around my electorate, which is an economically advantaged electorate, higher childcare costs are stopping people from having more children. I was doorknocking the other day and I met a young woman. She's got two kids. Her family are really good earners; they've just bought a house, and she and her husband have great jobs. Despite both of them literally earning well into the six figures, she said, 'We can't afford to have another child right now because of the cost of child care.' If you are not receiving the Child Care Subsidy, you're spending around $60,000 of post-tax income on childcare fees alone, and that's just for three days a week. For families in my area, some of whom are at the edges of the Child Care Subsidy, this is stopping them from having more kids. It's wrong for families in our country to have to choose not to have children because they can't afford the child care.

It's also bad economics. We know that we've got a birth rate that is at a record low at 1.5. It's historically low, but it's not a surprise given how much child care costs at the moment. Even with the subsidy, the average family in my electorate of Wentworth is still spending around $40,000 on out-of-pocket childcare fees to put two children into child care just four days a week. That goes up to $60,000 if they're not getting the Child Care Subsidy. We're talking about $120,000 of income that is required to pay for child care. Research by the New South Wales Productivity and Equality Commission showed that a one per cent increase in fees paid by a family led to a 0.16 per cent fall in the number of hours worked by the primary carer, which, in 80 per cent of cases, is the mother. As I said, it's no wonder that Australia's birth rate is so low.

We do need to look at broader reforms. As well as looking at how we fund this, how we make sure that we address childcare deserts and how we increase access, as we are looking to do through this removal of the activity test, we also need to look at supply-side factors that are driving up the cost of child care for Australian families.

When I talk to my local childcare centres, they tell me time and time again that some of the quality and compliance that is put in place—which is there for good aims, good reasons, in relation to maintaining childcare quality—is turning into a tick box that is not actually adding a lot of value. It has just become an administrative burden. In some cases they are pulling workers away from their kids because of all this documentation and the pressure to provide parents with updates constantly through the day, with photos and things like that. There are some rods that we've created for our own backs, with parents getting all this information. The system as it stands is making it more expensive and harder for childcare centres to offer high-quality child care at a price affordable to families and affordable to the government.

Similarly, I talk to them about training in relation to early childhood education. I was speaking to a woman who had been involved in early childhood education as a nanny for eight to 10 years. She had entered her training with a great desire to learn new skills and learn more about child development, but she spent her time learning about the compliance. That is ticking the boxes but not building her skills, and it's making it harder for her to continue with her childcare education because she's earning a lower wage but not feeling like she's building her skills. I think we need to look at the education system and also the compliance system, and say, 'How do we make sure that these are well-targeted to deliver high-quality but more affordable child care into our country?'

Finally, we need to look at the complexity of the system for parents. I've had numerous contacts from people in the community talking about the challenges in accessing the system, where young families are being caught out because they're unaware of the convention and the necessity of applying for childcare positions when the child hasn't yet been born. After 12 weeks of pregnancy I was calling all the childcare centres in my area, and I still struggled to get my children into a childcare centre. Families are seeing their hourly fees skyrocket well above the rate cap that's meant to be adjusted, and families are stuck and unaware of their eligibility because the application process for child care is archaic, complicated and inflexible. I remember trying to apply for the CCS myself and finding it notoriously complex; I'm well-educated and happy to deal with government systems, but this is a difficulty. For people in my area, an area that is relatively well served with child care compared to many parts of the country, the idea of shopping around for child care is a joke because families are completely beholden to the availability of places and often take whatever hours they can get—and that doesn't start to deal with shift workers and other complexities.

While I think we should celebrate each of the incremental steps in improving the childcare system as progress, I think we need to be honest with ourselves; history tells us the joy will be short-lived. I support the government's direction on child care and believe the Productivity Commission's recommendations provide a modest reprieve to working families. We need to accept these modest changes but look at a redesign of the system. We need to prioritise this issue in the next term of parliament and work out how we can get better outcomes at an affordable price both for families and the taxpayer. Having such high childcare and early learning costs compared to other countries around the world is hurting families and hurting the economy as well. We are tinkering on the demand side, and I think we need to look at meaningful and substantive supply-side reform.

Jason Clare (Blaxland, Australian Labor Party, Minister for Education) Share this | Link to this | Hansard source

Ask any parent, and they'll tell you early education and care is an essential service. It helps them get back to work and helps their children get ready for school. Under the Liberals the cost went through the roof and the rules were tightened to make it harder for some children to get the start in life they deserve. We're fixing that.

Over 10 years the cost of child care exploded by more than 49 per cent—double the OECD average—under Abbott, Turnbull and Morrison. We said we'd cut the cost of child care and we have, for more than one million families right across the country. As a result of the changes we made and passed through this parliament two years ago, a family on a joint income of about $120,000 has saved $2,768 since July 2023. That's helped a lot of parents get back to work and put more money in their pockets, and it's meant more children are now getting the benefits of our early education system. The number of children in our early education system is now about 100,000 more than it was when we were elected 2½ years ago. That's a good thing. There are also 1,000 more centres and more services. That's good, too.

When we came to office 2½ years ago, something else was happening. The people who educate and care for our children were leaving the sector in droves. They were leaving the job that they loved. The attrition rate was through the roof. That's now changed, too. The reason for that is the 15 per cent pay rise that we're now rolling out. The best example of that is what's happening at Goodstart Early Learning, the biggest childcare operator in the country. At their centres, across the country, job applications have now jumped by 35 per cent. Expressions of interest have jumped by 50 to 60 per cent, and vacancy rates are down by a massive 28 per cent. We're seeing that right across the country. Vacancy rates right across the sector are now down by 22 per cent. It turns out that, if you pay people more, more want to do the job. Early educators are some of the most important workers in this country and some of the most underpaid. They were leaving the job that they love, the job that we need them to, not because they didn't want to do it but because they couldn't afford to keep doing it. That 15 per cent pay increase is fixing that.

The next step in making our early education system better and fairer is making sure that more children who currently can't get access to it get that chance. In February 2023, we asked the Productivity Commission to comprehensively review our early education system. We asked them to help build a blueprint for reform and tell us how we can build a truly universal early education system. We got their final report in June of last year. One of the things it says that we have to do if we want to build that universal early education system is build more centres where they don't exist, what are sometimes referred to as 'childcare deserts'. We're doing that. In December, the Prime Minister announced that, if we win the next election, the government will create a $1 billion Building Early Education Fund. This will be the single biggest ever investment by an Australian government in new childcare services. It will build or expand over 160 early education and care centres where they're needed most.

I want to thank GrainGrowers, who said that this is positive step and that this fund will help expand and build new childhood education and care centres in areas of need. I want to thank the National Farmers Federation too for imploring the Liberals and the Nationals to match what we're doing. They get it. Unfortunately, the Liberal Party and National Party haven't heard them, because they don't support this. They've spent 2½ years in this parliament talking about childcare deserts. They spent a decade in government doing nothing about it. Now there is a $1 billion fund on the table that they could support, but they choose not to. It's unbelievable.

The Productivity Commission also recommended something else that we need to do next. That's to get rid of the Liberals' activity test. This is a real barrier that was purposefully put in place by the Liberal Party to limit access to early education for a lot of children—in particular, a lot of disadvantaged children and kids from poor families. It is deeply unfair. A test to determine if your child is worthy of accessing early education is one that no family should have to pass. The Productivity Commission report gives us a definition of what a universal early education and care system could and should look like. It says it's a system where every child can get access to affordable early education and care three days a week or 30 hours a week. This bill gets rid of the Liberals' activity test and replaces it with a guarantee of access to three days a week of government supported early education and care for every child who needs it. It's still means tested, but it means that families will not be left out because parents are looking for work or preparing to go back to study. It means that over 100,000 families will be able to get more subsidised hours of early education and care. And it means real cost-of-living relief for 66,700 families in the first full financial year alone. Those families will save an average of $1,370 per year on their childcare costs. About half of those families earn less than $100,000 per year. Lower-income families will save even more: an average of $1,460 a year.

This is going to make a real difference for a lot of young families. It will help with the cost of living but it will do more than that. Fundamentally this is about helping every child get a great start in life—what every parent wants for their children and what every child deserves—helping them to get ready to start school, helping to make sure they don't start school behind. That's what early education does. This is not babysitting; it's early education. The evidence is clear: children who get access to early education and care are more likely to start school ready to go, ready to learn. They're also more likely to finish school and then go on to more study. Former US president Joe Biden often made the point that a child who goes to preschool is 50 per cent more likely to go to college.

At the moment, while lots of Australian children get the benefit of this life-changing opportunity, not all do. As the Productivity Commission pointed out in its final report, at the moment it's children who need it most who are least likely to access early education and care. In 2021 only 54 per cent of children in the most disadvantaged areas were enrolled in early education and care, compared with 76 per cent of children in the highest socioeconomic areas. The most recent Early Development Census report found that only 42.7 per cent of children experiencing the highest level of socioeconomic disadvantage were on track when they started school, compared with 54.8 per cent of all children. That's what this is about: helping them, helping to make sure more children are ready to start school.

This bill does something else, too. As part of our commitment to closing the gap we are setting a target of ensuring that at least 55 per cent of Indigenous Australian children are developmentally on track. At the moment it's 34 per cent. That's a big gap. Not unsurprisingly, Indigenous children's attendance at early education and care is way below the national average, and the activity test is one of the reasons for this. That's why this bill increases the base entitlement to 100 hours for Indigenous children. It's a really important change—one that Indigenous families and communities have been calling for since the activity test was created. And we have listened. You only have to listen to the words of the CEO of SNAICC, Catherine Liddle, after the Prime Minister announced this policy to know how important this is. This is what Catherine 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's just one part of the work we need do to close the gap, and I am so very proud that it's part of this bill.

I want to thank the Prime Minister for his leadership in driving reform in this area, and I know how personally important it is to him to see these changes being made. I also want to thank my dear friend and colleague the Minister for Early Childhood Education, the awesome Anne Aly. I also want to thank our offices, and I want to thank our department for the work they have done in preparing this legislation. And I want to thank our early educators and our teachers, and I hope you see in this bill how this government values the important work you do.

I also want to thank everyone who has called for this for years and years and years—groups like the Parenthood, whose CEO, Georgie Dent, called this 'a paradigm shift'; people like Ros Baxter, the CEO of Goodstart, who said, 'This will change lives'; Jay Weatherill at the Minderoo Foundation, who called this 'a momentous step'; the Centre for Policy Development, who said that this guarantee 'is a game-changer' and that it demonstrates 'a real dedication to delivering a universal system'; or the Business Council of Australia's Wendy Black, who said that they have 'long called for an early childhood education guarantee based on quality, universal access to give children a strong educational foundation'.

This is important reform for an essential service for more than a million families across the country. It helps parents get back to work, but, even more importantly than that, it helps the next generation of Australians to prepare for school, to prepare for their life ahead. That's what makes this reform so important, and I am so happy to commend it to the House.

Carina Garland (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

This legislation is important, because every family deserves to have access to quality and affordable education. In speaking on this legislation, the Early Childhood Education and Care (Three Day Guarantee) Bill 2025, I reflect on how significant an issue early childhood education and care is for the people in my electorate of Chisholm. I've recently undertaken a survey with my electorate on the importance of education and care for their children, had a forum with the magnificent minister, Anne Aly, in my electorate and made a submission to the Productivity Commission on behalf of my community.

I think what is before us today is the building blocks of a really important institutional and structural change in this country. It will make our country better to have universal education for our youngest Australians. It will make our communities stronger and more prosperous.

What I really want Australians to understand, and what I really want the people of Chisholm to understand, is that this work that we as a government are doing is delivering something really good here, and those opposite are standing against it. They are not part of this positive change for our country. We know education opens doors. Those opposite want to keep those doors closed. As the Minister for Education has reminded us here in this chamber, those who need early education the most are the least likely to be able to access it, and this legislation ensures that those who need early education the most will be able to receive it. Again, I emphasise: I really want the people of Chisholm to understand and to know, and the people of Australia to understand and to know, that the Liberal Party do not support this—they do not support universal access to early education for all Australians. I think that is a really damning reflection on what the modern Liberal Party is. 'Modern Liberal Party' does feel a little like an oxymoron.

This is a bill that represents real change for Australian families. We know that, for too long, the Liberals' unfair activity test locked children out of early learning centres, penalising families who didn't meet the rigid work and study requirements. This system hit the most vulnerable families in our communities the hardest—low-income families, single parents and families that lacked support. The result? Thousands and thousands of children missing out on the early education that sets them up for life. I'm so proud that our government is taking a big step forward here and putting an end to that.

This legislation will benefit all of us. Yes, it will benefit families. It will benefit children—of course it will. But we are building something here that will ensure greater workforce participation and an educated workforce of the future, with our youngest minds being exposed to education early so that they can pursue whatever it is they want to and make a bigger contribution to our nation.

This bill replaces the Liberals' outdated activity test with a simple, fair guarantee: three days a week of subsidised early education for every family. This bill redefines how we support our children and their families. There won't be penalties for parents who aren't working a set number of hours—just a simple commitment that every child, regardless of their background, should get the best start in life. I can't believe those opposite cannot support that idea. The three-day guarantee boosts access to early childhood education and care and ensures an opportunity that those on this side of the House believe that every child deserves.

This isn't just about child care. This is about ensuring that every Australian family and every Australian child thrives. This legislation guarantees that families don't need to choose—and they shouldn't have to choose—between their child's education and making ends meet. We know families are doing it tough in our communities, and that's why on this side of the House we've implemented a number of measures to make life easier for Australians. Again, those opposite have opposed them almost every step of the way.

Parents need a fair go. We know that families were forced to cut hours because they couldn't meet the Liberals' outdated activity test. That's still happening. We're changing that. The 2018 childcare package cut down the number of subsidised hours of care that low-income families could access from 48 hours to 24 hours or just one day a week. That's what those opposite did. That's their contribution to early childhood education and care. This bill cuts through their red tape. Under this legislation, more than 100,000 families will have access to more hours of subsidised care, and this is how we are helping to ease the cost-of-living pressures on families and households. Around 66,700 families are expected to benefit from our changes in the first financial year of being implemented. This legislation ensures that the rules work for Australian families, not against them.

We have a strong record when it comes to early childhood education and care. We introduced a 15 per cent pay rise for early educators. They are people who deserve our thanks absolutely, but they deserve so much more than that. We've made child care cheaper, and this bill is a critical step towards continuing our work to build a system that is simple, affordable and accessible for every family. Over 10,800 families are already benefiting from cheaper child care. I know that I've spoken to many families over the course of the last little while who are better off. This has given them the freedom to work, study and support their families without the fear of losing access to early learning. This is a real game changer for Australian families. Through the $1 billion Building Early Education Fund, we're going to support more early learning centres to be built in underserviced areas, ensuring that every single child has access to quality education close to home. Again, that's what we think Australian children and their families deserve.

This is about building strong foundations for our children and their families to thrive. Through our legislation here and in the changes that we've made more broadly to this system, we've demonstrated that we will not tolerate a system that leaves Australian families vulnerable, that leaves Australian families behind or that leaves Australian children behind, frankly. I want to see, and I would hope that everyone in the chamber would want to see, a future where every child can succeed and where every family has the support they need to thrive. We know that the activity test those opposite introduced was never about supporting our communities. It was about cutting access and leaving too many families behind.

I'm really proud—it is a privilege—to be part of a government that is fixing that and building a future for so many through investing in education. This is real reform for families. This is an investment in the future. We don't just talk about the future on this side of the House, although we are ambitious and aspirational for what that future looks like; we invest in it. We make sure that we do everything we can with the privilege of government we have to ensure our communities thrive not just now but into the future. I really do think that this is going to change the lives of so many people in this country. As I mentioned, it will not just help families or children; it will help all of us in Australia to build the kind of prosperous country we all deserve to live in and ensure that every single person in this country has the kinds of educational opportunities that they deserve.

I spoke about the importance of education in my very first speech in this place, and I've witnessed in the term of this government so far the incredible commitment that we have had to making sure that everyone is able to realise aspiration and opportunity through education. This bill is another example of the work that we are doing to achieve that—to open those doors. It is really disappointing that, rather than investing in the futures of our youngest Australians, those opposite want to spend money on free lunches for bosses. That's their priority. On this side of the House, we want to make sure that every child gets the best possible start in life.

I know how welcome this is going to be in my community, in Chisholm. I know that this is going to change lives. It is going to mean that parents can make decisions to do more work and participate in the economy more. I know that this is going to mean that we have a culture where we value education in our communities and we understand where education can take people. We know that the first five years of a child's life are so significant for brain development. I don't think we would question the right for a child to access education at any other level, and we shouldn't question a child's right to access it from those very early years.

I thank the Minister for Education and the Minister for Early Childhood Education for their work here and in so many other areas. Thank you, on behalf of the children and the families in Chisholm, for the positive difference you are going to make to their lives. I commend this bill to the House.

Rick Wilson (O'Connor, Liberal Party, Shadow Assistant Minister for Trade) Share this | Link to this | Hansard source

I rise to speak on the Early Childhood Education and Care (Three Day Guarantee) Bill 2025. This bill amends the A New Tax System (Family Assistance) (Administration) Act 1999 and replaces reference to the childcare subsidy activity test with a three-day guarantee. The bill is set to commence in January 2026, and the three-day guarantee will provide all families with a combined income of up to $533,000 with access to 72 hours a fortnight of subsidised child care. For Indigenous families, this will be increased to a maximum of 100 hours a fortnight of subsidised child care. The legislation does not guarantee or prioritise access for working families over non-working families. The government estimates that the cost of these measures will be $426.7 million over five years from 2024-25, despite the policy not rolling out until January 2026. This is also in stark contrast to the Productivity Commission's report estimating that the full removal of the activity test would cost $2.3 billion per year.

The coalition will oppose this legislation. There are several issues with this bill, including the removal of priority access for working families. It disincentivises aspiration, increases access without addressing supply issues, does nothing to increase access or flexibility for families and does not address the current cost-of-living pressures. The bill has been referred to a Senate inquiry with a reporting date of 21 March. I'll remind the House that that is prior to the House being scheduled to return for the budget on 26 March. This policy was first announced by the Prime Minister on 11 December 2024, and it's been described as the next step in the Albanese government's plan for a universal early learning system.

The government estimates that over 100,000 families will have access to more subsidised care and more than 66,000 families will be better off overall. This represents only about six per cent of all families currently engaged with the childcare subsidy system. Under the current activity test, parents and carers need to be looking for work or working, studying or volunteering to be eligible for subsidised care, noting that volunteering and looking for work only count towards the first 16 hours of your activity level. To calculate a family's hours of subsidised care, Services Australia uses the lower activity level of a couple, even if one of them has an exemption. In a single-parent household, only their activity levels are used to determine the number of hours of subsidised care.

There are exemptions to the activity test in which parents and carers are eligible for 36 hours of subsidised care a fortnight, including, firstly, if you identify as Indigenous, and, secondly, if you're a parent pathways participant and receive an eligible income support payment. A parent or carer is exempt from the mutual obligations if they receive one of these payments: JobSeeker, the parenting payment and special benefit. Or they're exempt if they have a preschool-age child that attends preschool through centre based day care. Parents and carers can access 72 hours a fortnight if they're receiving a care allowance. Grandparents and some eligible families accessing the additional childcare subsidy, including vulnerable children in the foster system and families escaping domestic violence, are exempt from the activity test. As part of the 2022 cheaper child care legislation, the Albanese government amended A New Tax System (Family Assistance) Act 1999 to provide Indigenous children with a minimum of 36 hours a fortnight of subsidised care.

Removing the activity test for three days a week means parents who require the support of early childhood education while they work, study, train or volunteer will be competing with families who don't work or don't require support in order to work. The coalition's childcare subsidy reforms came into effect on 2 July 2018, including the activity test. Prior to this, parents and carers were required to satisfy a work, train or study test. The activity test was introduced to encourage labour force participation and to ensure priority of access was given to vulnerable and working families.

Australia has a long history of priority access guidelines for child care, which this new legislation removes. This legislation brought forward with this timing is just a political game to create a wedge for the opposition. The policy was initially announced as an election commitment, along with a $1 billion Building Early Education Fund on 11 December, and somehow this legislation just popped up last week. Despite the government claiming urgency and having the numbers to pass the legislation this fortnight, they have agreed to the motion in the Senate to refer it to an inquiry.

Labor's three-day guarantee is fundamentally unfair and divisive. While it appears that this will only increase access for a small number of families, it will have a wide-ranging effect on all. Families who need early childhood education so they can work will be competing against families who now have extra subsidised access but may not be working, studying or volunteering at all. So, generally speaking, families already in the system are unlikely to be impacted, but working families about to enter the system or trying to enrol a new child will be greatly impacted.

I see this across my electorate where childcare places are desperately short in our regional towns and cities, which haven't seen any new investment in childcare facilities. They are desperately short. These are the towns and the communities that produce this nation's wealth. Across the goldfields, for example, $14 billion of mineral wealth is produced from those towns, yet childcare places across the goldfields and, in particular, the major regional city of Kalgoorlie are desperately short. Families are leaving town because they can't access the sort of child care they need for both partners in the family to work and earn the money they need to earn in a high-cost regional town like Kalgoorlie.

Once again, Labor is at war with aspiration. It's at war with working families, and it's actually at war with working mothers. Over the last three years, Labor has failed to meaningfully address supply-side constraints. That's what I'm referring to, certainly, in the towns and cities in my electorate where there are massive constraints on supply. Modelling from the Productivity Commission shows that most children affected by the activity-test changes live in major capital cities. Families in thin markets and childcare deserts, such as the ones I'm describing across my electorate of O'Connor, who have little or no access to child care at all will be most disadvantaged. There is no point in having access to three days of care if there is no care available. Once again, Labor is dividing the nation—working versus non-working families and metropolitan versus regional families. Labor argue that their $1 billion BEEF policy will boost supply, but history tells us they will not be able to deliver.

Families have the right to choose what their working family looks like, and the coalition respects this choice. Labor's three-day guarantee does nothing for families who choose to remain at home to raise their children until primary school or families who use flexible arrangements, such as grandparents or nannies. The bill also does nothing for parents who need flexibility, such as families who do shift work or non-standard work hours. Once again, across my electorate, there are a lot of shift workers—the mines that produce this nation's wealth run 24/7. There is nothing in this legislation for those families. Again, hardworking families will not benefit from this change, but families who aren't working, studying or training will. It's similar to Labor's other policies. This rewards families who access child care, at the expense of those who aren't able to or choose not to.

There is a significant discrepancy in costings. We believe the $426.7 million over five years is well and truly undercooked, and the true impact of removing the activity test will not be fully known. The department was unable to advise how many families are eligible for CCS but are not enrolling their children nor how many families are completely engaged with CCS. The government costing does not account for these groups. The Productivity Commission's 2024 report A path to universal early childhood education and carecosted the complete removal of the activity test at $2.3 billion per year. I'll repeat that: $2.3 billion, versus the government's costing of $426.7 million, over four years. The Productivity Commission's modelling suggested that the complete removal of the activity test would increase hours of early childhood education by only four per cent. They also estimated that it would lead to a 0.9 per cent decrease in hours worked by sole parents and primary carer parents in coupled families. These are not our numbers; these are the Productivity Commission's numbers.

Some sections of the community have labelled the three-day guarantee a cost-of-living measure, but in reality it is nothing of the sort. Since Labor came to power, the cost of child care has increased by 22.3 per cent. I'll just repeat that in case anybody missed it: since Labor came to power the cost of child care has increased by 22.3 per cent. At this rate, childcare costs will have soared by 124 per cent by March 2032. That is the equivalent amount of time, a decade, that the Labor Party are saying that under the previous coalition government prices rose by 49 per cent—which in hindsight we may look back on as the golden era for childcare costs.

The last time Labor was in government the cost of child care rocketed almost 53 per cent in six years. Since Labor's cheaper childcare policy came into effect, out-of-pocket costs increased by 12.7 per cent. Almost one in three services are charging above the fee cap as providers struggle to keep up with rising regulation and operational costs. We see this, I hear this from my constituents—

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

I move:

That the question be now put.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question before the House is that the question be put.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question now is that the amendment be agreed to.

Question negatived.

The question is that this bill be now read a second time.

Mr Tony Burke (Watson, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

I move:

That standing order 43(a) be suspended until the conclusion of proceedings on the bill.

That means we complete the bill and then do 90-second statements.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question before the House is that the motion be agreed to.