Mid year economic and fiscal outlook – early childhood measures
The Australian Government has today announced next steps to building a universal early education and care system.
The new measures will build on:
- the 2023 Cheaper Child Care package, which reduced out-of-pocket expenses for families using early childhood education and care (ECEC)
- the 15% pay rise for ECEC workers announced in August 2024 and rolling out in December this year.
The next step is to build more services in the regions and the outer suburbs to give more families access to quality early education.
Building early education fund
A new $1 billion fund to build ECEC centres including in the outer suburbs and regional Australia. The fund will give more families access to quality ECEC in areas where it is needed most.
The fund includes:
Targeted capital grants
$500 million in grants for providers and state and local governments to establish new services and increase the capacity of existing ECEC services. Grants will be targeted to priority and underserved markets including :
- on school sites
- in regional locations
- supporting First Nations children.
Business case for Commonwealth-owned services
$2.3 million to develop a business case for the Commonwealth to invest in owning and leasing ECEC centres to increase supply.
Three-day guarantee
From January 2026, all children will be entitled to at least 3 days’ subsidised ECEC each week.
The measure:
- represents an investment of $297.6 million over 4 years from 2024–25
- guarantees all families at least 72 hours of subsidised care per fortnight, regardless of their activity levels.
Service delivery prices
A $10.4 million project to establish a data-driven understanding of the reasonable costs for ECEC service delivery.
The project is a key part of the government’s commitment to universal, affordable ECEC. Findings will inform future reforms to the sector.
Worker retention payment
The Australian Government is investing $3.6 billion for the worker retention payment to support a 15% wage increase for ECEC workers over 2 years from December 2024.