“A GREAT EQUALISER”: ADVOCATES BACK GOVT’S CHILDCARE LEGISLATION, SAY 126,000 CHILDREN FROM LOW-INCOME FAMILIES WILL BENEFIT
3 February 2025 – Scrapping the Child Care Subsidy “Activity Test” will allow 126,000 children from low-income families to access early education and 40,000 parents to reenter the workforce, injecting $4.4. billion into the economy.[1]
The Government announced today it would introduce legislation to remove the test – which determines eligibility for government-subsidised childcare – in the next fortnight.
Minderoo Foundation’s Thrive by Five campaign, which has been advocating for the move, said it was long overdue.
“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,” said Thrive by Five’s Jay Weatherill.
“Early childhood education is a fundamental building block for children’s cognitive, social and emotional development. Together with the care and guidance they get at home, attending childcare and kinder supports children’s development and gets them school-ready.”
As prep students around the country start school for the first time, data from the Australian Institute for Health and Welfare suggest one in five will already be at risk, or considered ‘developmentally vulnerable’[2].
“Early childhood education is the great equaliser,” Mr Weatherill said.
“Together with other services to support families in the early years of a child’s life, early childhood education has the potential to give all children the tools to succeed.
“But currently in Australia, thousands of children are missing out because of how much their parents work, how much they earn, and where they live.”
The Activity Test requires parents to be working, studying or volunteering in order to receive the Child Care Subsidy, with higher subsidies for higher “activity” hours.
This creates a “catch-22”, where parents cannot get childcare until they have a job, but they cannot accept a job unless they have secured a childcare place.
Reforming or removing the Activity Test has been recommended by the Productivity Commission, Australian Competition and Consumer Commission, Business Council of Australia and dozens of other organisations.
“All the experts agree this is a positive move, and we really hope all parties support this legislation. A vote against this would be a vote to deny up to 126,000 Australian children from low-income families a fair start to their education,” Mr Weatherill said.