Universal childcare outlined
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The Productivity Commission has laid out the path to universal childhood education.
The Productivity Commission has released a landmark report on Early Childhood Education and Care (ECEC), providing a detailed roadmap for the creation of a universal system in Australia.
The report (PDF) covers the significant reforms needed to make ECEC more accessible, affordable, equitable, and inclusive, particularly for children from disadvantaged backgrounds.
It proposes ensuring every child aged 0-5 years has access to at least 30 hours or three days of high-quality ECEC per week, for 48 weeks a year, by 2036.
The goal is to remove existing barriers, improve developmental outcomes for children, and enable greater workforce participation by parents.
“Children experiencing vulnerability and disadvantage benefit the most from quality early childhood education and care, but they are currently the least likely to attend,” Associate Commissioner Deborah Brennan said.
Among the report’s key recommendations is the removal of the activity test, which currently ties access to childcare subsidies to parents’ work or study.
The report found that this test acts as a barrier for low-income families, limiting their ability to access ECEC.
“A child’s entitlement to at least three days of ECEC a week should not depend on how much their parents work,” Brennan said.
The report also addresses the issue of affordability, recommending an increase in the Child Care Subsidy (CCS) to 100 per cent of the hourly rate cap for families earning up to $80,000, benefiting nearly one-third of all Australian families with young children.
Additionally, it suggests raising the Higher Child Care Subsidy (HCCS) for families with multiple young children.
Modelling predicts a 10 per cent increase in demand for ECEC services, largely from low- and middle-income families, while also encouraging higher labour force participation, particularly for mothers.
To address workforce shortages in the ECEC sector, the report recommends better training, career pathways, and professional development, alongside the recent government-announced 15 per cent wage increase for ECEC workers.
“Improving pay and conditions is critical but more can be done to improve career and qualification pathways for ECEC professions,” Commissioner Martin Stokie said.
Federal Minister for Education Jason Clare has welcomed the recommendations, saying that the government’s recent Cheaper Child Care changes have already reduced costs for over one million families.
“We are building a bigger, better, fairer system where more children and families can benefit,” Clare said.
“The report makes clear that more needs to be done to make sure children from poor families, who would benefit the most from high-quality early education, are not missing out.”
Minister for Early Childhood Education Dr Anne Aly echoed this sentiment, saying; “All children should be able to access the transformational benefits of quality early childhood education and care, no matter their background or postcode”.
Dr Aly highlighted the importance of accessible and affordable early learning in enabling parents, particularly women, to pursue work, study, or increased hours of employment.
The report also addresses service availability, calling for further investment in establishing ECEC facilities in under-served areas, particularly in regional and remote communities.
It says more funding will be needed to address these persistent service gaps, which often affect families in disadvantaged or rural areas.
Early Childhood Australia (ECA), a key sector stakeholder, praised the report’s emphasis on access, quality, and inclusion.
“We applaud the Productivity Commission’s diligence in addressing the cost and availability barriers to early childhood education and care,” said ECA CEO Sam Page.
Page also supported the report’s call for removing the activity test and simplifying the subsidy system, stating that ECEC should be an entitlement for every child, not dependent on parental activity or location.
The report concludes with recommendations for expanding access to outside school hours care, improving service quality through better regulatory support, and fostering inclusive ECEC environments for all children, including those with diverse needs.
“The system can only be universal if every child is welcome,” said Commissioner Stokie, calling for greater support to ensure services are inclusive and culturally responsive, particularly for Aboriginal and Torres Strait Islander children.
The report follows a 16-month inquiry, informed by consultations with the public, ECEC professionals, and advocacy groups.
The commission is urging federal and state governments to sign a new national agreement to commit to these reforms.