Chapter 1Committee report
Passage of the bill
1.1The bill was introduced in the House of Representatives on 5 February 2025 by Minister Aly. The provisions of the bill were referred to the committee on 6February 2025 for inquiry and report by 21 March 2025.
1.2On 13 February 2025, the bill passed the House of Representatives and was subsequently introduced and passed in the Senate. The bill received Royal Assent on 20 February 2025.
1.3Notwithstanding the passage of the bill, the Senate resolved that the committee may continue to inquire into the provisions of the bill and present a report.
Purpose of the bill
1.4The Early Childhood Education and Care (Three Day Guarantee) Bill 2025 (bill) sought to implement a universal minimum of 72 hours of subsidised child care per fortnight.
1.5The bill as introduced would amend the A New Tax System (Family Assistance Act) 1999 and the A New Tax System (Family Assistance) (Administration) Act 1999 to modify the Child Care Subsidy (CCS) activity test to allow:
families to access a minimum of 72 hours of subsidised child care per fortnight, regardless of time spent undertaking recognised activities;
families with 48 hours or more of recognised activities per fortnight to access 100 hours of subsidised care per fortnight; and
those caring for Aboriginal and Torres Strait Islander children to access 100 hours of care per fortnight regardless of activity level.
1.6In her second reading speech, the Minister for Early Childhood Education, the Hon Dr Anne Aly MP (Minister Aly), noted that the bill will ensure 'that every child can have the best start in life' whilst recognising that 'high-quality' early childhood education and care (ECEC) 'should be an accessible, affordable option for every family'.
1.7Minister Aly also attested that the bill would also support families struggling with the cost of living by providing financial relief for 66 700 families, with each saving an average of $1370 per annum. According to the Department of Education (department), around 29 per cent of the beneficiaries would be single parent families. The average savings by income bracket are as presented in Figure 1.1.
Figure 1.1Average saving by income bracket
Source: Department of Education, Submission 5, p. 13
1.8Families earning over $533 280 in the 2024–25 financial year are not eligible for subsidised care, as per current legislation.
Context for the reforms
1.9According to the department, the three day guarantee—which has been informed by the recent Productivity Commission and the Australian Competition and Consumer Commission inquiries—is part of the next steps in building a universal ECEC system in Australia.
1.10The reforms in the bill are part of a broader suite of ECEC reforms, including:
the Cheaper Child Care package, which increased CCS rates for families earning less than $530 000;
a workforce package to support the skills and training of ECEC workers;
support for a 15 per cent wage increase over two years for eligible ECEC workers (via the ECEC Worker Retention Payment);
the Building Early Education Fund to build and expand ECEC centres in areas of need, including outer suburbs and regional areas; and
the development of a data-driven understanding of the reasonable costs of quality ECEC service delivery throughout Australia.
Consideration by other parliamentary committees
1.11When examining a bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
1.12At the time of writing, neither the Scrutiny Committee nor the Human Rights Committee had considered the bill. However, the statement of compatibility with human rights in the Explanatory Memorandum states that the bill is 'compatible with human rights because it promotes the protection of human rights'.
Financial implications
1.13According to the Explanatory Memorandum, the bill would have an estimated cost of $426.7 million over five years from 2024–25.
Conduct of the committee's inquiry
1.14The committee advertised the inquiry on its website and invited submissions by 28 February 2025.
1.15At the time of reporting, the committee had accepted and published 18 submissions, which are listed at Appendix 1. The public submissions are available on the committee's website.
1.16There was widespread support for the bill's aim to replace the activity test and guarantee three days of subsidised ECEC per week for children who need it, as well as provide increased hours of subsidised care for Aboriginal and Torres Strait Islander children.
1.17There was also praise for the bill's passage through both houses of Parliament on 13February 2025. In relation to the passage of the bill, The Parenthood stated:
We commend the committee and Parliament for recognising the overwhelming evidence in support of this reform and for taking decisive action to ensure more children and families can access the early learning they need to thrive.
1.18While supportive of the bill, submitters also provided commentary on a range of issues such as:
the availability of ECEC in thin markets, including regional, rural, and remote areas;
the potential impact of workforce shortages on ECEC availability; and
the affordability of ECEC, including for lower income families.
1.19The committee thanks those organisations and individuals who contributed to this inquiry by preparing written submissions.
Senator Tony Sheldon
Chair
Senator for New South Wales