Unpacking the ALPs just released pre-election ECEC policy pledges 

In an important announcement for the early childhood education and care (ECEC) sector Prime Minister Anthony Albanese has outlined a series of new policy pledges which the Australian Labor Party (ALP) will take to the upcoming Federal Election. 

This article will aim to unpack the policy pledges individually as well as provide insights on the implications of each new policy measure should they be enacted. 

Policy pledge #1 – Abolish the Activity test and Introduce a 3 Day Guarantee 

From January 2026 the parents of children attending early learning for up to three days a week will not be required to meet the activity test in order to qualify for the Child Care Subsidy. 

Comment: The removal of the activity test is undeniably a positive step and consistent with not only advocates positions since its creation in 2018, but also to the Productivity Commission which noted in its final report into the ECEC sector that “the CCS activity test should be removed. Children’s participation in ECEC should not depend on their parents’ activity.”

Although the 3 day guarantee will not apply to families seeking more than three days a week of care, the overall impact on demand in communities at the lower end of the socio economic spectrum will likely be a net positive. 

Policy pledge #2 – Create a dedicated $1bn ECEC building fund

From 2025 grants will be made available from a $1 billion fund to providers as an incentive to build and expand services in areas of need, including in the outer suburbs and regional Australia.

Comment: The creation of the Building Early Education Fund is again consistent with a key Productivity Commission recommendation which stated that “in persistent ‘thin’ markets or communities with complex needs, the Australian Government should provide additional funding to enable the establishment of appropriate services.”

This fund will go some way to delivering on this recommendation with Mr Albanese specifically calling out that co-location on school sites wherever possible and on supporting the growth of high-quality not-for-profit providers were a priority.

Policy pledge #3 – Develop an Early Education Service Delivery Price 

In its final pledge the ALP committed to developing an Early Education Service Delivery Price in order to better understand the cost of delivering ECEC services across Australia and “underpin future reform.”

Comment: This third and final pledge is a little less tangible, and impactful, than the prior two but by including it in its policy mix the ALP are signalling that they continue to harbour ambitious reform intentions for the ECEC sector that extend beyond the current system set up.

A thorough understanding of the delivery price of early education across Australia would be an essential precursor for a shift to a supply side funding framework consistent with a fixed price model such as $10 a day care for all children. 

Conclusion – Net positive for Australia’s ECEC sector

The ECEC sector is likely to consider the ALPs policy pledges a net positive as uncertainty around the imposition of a fixed fee $10 a day system has now been removed for the foreseeable future. 

Instead ECEC providers, particularly those serving lower socio economic communities, can look forward to welcoming children that previously would have been excluded from care due to their parents not being eligible to access ECEC services due to activity test constraints. 

In addition, providers, particularly not for profit providers, interested in operating in underserved communities will get an incentive boost via the Building Fund that will ensure that more rural and regional communities will benefit from early learning availability.