Anthony Albanese to promise three days subsidised child care without an activity test

Anthony Albanese will promise a re-elected Labor government would guarantee three days of subsidised child care without people having to undertake an activity test.

In an address on Wednesday to an early education event in Brisbane, Albanese will say every family earning up to $530,000 would have access to this guarantee. The plan would cost $427 million over five years and begin in January 2026.

The present activity test determines the maximum number of hours of subsidised care per fortnight. Activities include paid work, studying, volunteering and looking for work. The more hours of activity, the more hours of subsidised care people can receive. There are exemptions for low income earners and some other families.

Under the prime minister’s promise, those accessing subsidised care of more than three days would still have to meet an activity test.

The recent Productivity Commission inquiry into early childhood education and care recommended the activity test be entirely scrapped.

In his speech, released in part ahead of delivery, Albanese says the activity test puts “extra weight on the shoulders of parents who are already doing the hard yards of looking for work while locking their children out of early education.

"Denying them those learning skills and social skills that get you ready for school.”

He says too often those children who miss out on early education are those for whom it would make the most difference.

“Our Three Day Guarantee will ensure every family can afford three days of high-quality early education.”

Labor wants to “build a universal child care system. Simple, affordable and accessible, for every family.”

But Albanese stresses the plan does not mean mandatory attendance. “The choice will be up to parents, as always, as it should be. But we want families to have a real choice. We want to make sure that your decision isn’t dictated by where you live, or what you do for a living.”

Albanese says this term the government has been putting the foundations for a universal system into place. The single biggest commitment it took to the last election was its cheaper child care policy, he points out.

This investment has cut the cost of child care for more than one million families, with the average family saving more than $4.400, he says.

He says next week’s budget update will show Commonwealth funding for child care subsidies w increasing by $3.1 billion over the next four years, supporting an extra 200,000 children.

The Productivity Commission in its report said the activity test was brought in to boost workforce participation. But it had “cemented a view” among some disadvantaged families that early childhood education was “only for people who have jobs”.

“The test was tightened in 2018 to reduce the number of subsidised hours families could access without meeting the activity test. The Child Care Package Evaluation, undertaken after this tightening, showed that it is not clear that labour force participation goals have been achieved,” the report said. “Changes in employment and other activities were small and not necessarily attributable to the activity test.”