The bill partially abolishes the ‘activity test’ to guarantee three days of subsidies for families earning up to $530,000.
Families earning up to $530,000 a year will be guaranteed three days of subsidised childcare per week free of the previous “activity test,” under a plan unveiled by the federal Australian government on Feb. 5.
The policy, introduced by the Minister for Early Childhood Ann Aly, promises a minimum of 72 taxpayer-subsidised hours per fortnight.
Currently, parents must meet specific work, study, or volunteering criteria to access childcare subsidies.
Labor’s new policy would effectively remove this requirement, opening up free childcare hours for a wider segment of society.
Indigenous Families to Receive Extra 28 Hours Per Week
Aly highlighted that only 34 percent of Indigenous children are developmentally on track when they start school.
Under the proposed law, Aboriginal and Torres Strait Islander children will be entitled to 100 hours of subsidised early education per fortnight (an extra 28 hours more).
Aly quoted Snaicc CEO Catherine Liddle saying, “This can be a game changer for our babies … setting them up for a thriving future. It’s a significant commitment towards closing the gap.”
Activity Test Failed to Boost Workforce Participation: Minister
The childcare subsidy activity test, introduced by the Coalition government in 2018 to encourage workforce participation, has failed to achieve its goal, claimed Aly.
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She said that the test has instead restricted parents’ choices, particularly single parents.
“The Australian Institute of Family Studies found no evidence that it boosted workforce participation, while the Productivity Commission called its effects ambiguous,” she said.
She argued that the test disproportionately locks out disadvantaged children from early learning.
In 2021, only 54 percent of children in the most disadvantaged areas were enrolled in early education, compared to 76 percent in the highest socio-economic areas.
These children are also more likely to be developmentally vulnerable, with just 42.7 percent on track when starting school, compared to 54.8 percent of all children.
Opposition Sceptical of Changes
The Coalition is sceptical of the changes.
Shadow Minister for Early Childhood Education Angie Bell said keeping the activity test was important to ensure subsidies were targeted.
“Our position on the activity test is that it’s a very important measure to make sure that $15 billion worth of taxpayer subsidy goes to those who are working, training, or looking for work,” Bell told Sky News.
Labor’s Minister for Education Jason Clare criticised the opposition for not supporting government-backed pay rises for childcare workers.
“They’re opposed to our pay rise for early educators, they’re opposed to building more centres where they don’t exist. And I expect the Liberals will be opposed to this as well. The only thing that they’ve said that they will do is make cuts right across the board,” he added.
Greens leader Adam Bandt said his party would continue its push for universal childcare.
“If the government wants to get legislation through this fortnight to go some way towards what the Greens have been calling for—and make child care and early childhood education accessible and affordable to everyone in this country—then we’re prepared to work with them and make it happen.”
