Lack of spaces may reduce impact of Activity Test reforms, regional advocates claim

The Federal Government’s recent decision to abolish the childcare activity test  and provide more subsidised days of early learning for parents is ‘unlikely to change anything’ for regional families if they can’t find a place, regional advocates have shared with The ABC.

Crucial changes to legislation underpinning the early childhood education and care (ECEC) landscape passed through Parliament on 14 February, during what some anticipate to be the final parliamentary sitting day before the election, which must be held by 17 May 2025.

Under the changes parents and families will have access to three days of guaranteed subsidised childcare (sic.) The changes will commence from January 2026, and will remove the current Activity Test to guarantee subsidies for families earning up to $530,000 in a bid to lay down the foundations for a universal early education system.

From January 2026 families can get at least 72 subsidised hours of care each fortnight for each child regardless of how much work, training, study or volunteering they do.

Families caring for First Nations children will get 100 hours of subsidised care each fortnight for each child.

While welcomed by the sector as a whole, advocates with a specific interest in the regional and rural families they represent have said that these changes will only help those who can get their child into care in the first place. 

“If you don’t have that service to access, then it changes nothing,” Regional Australia Institute CEO Liz Ritchie shared with The ABC. 

Jack and Nikki Kennedy, who live in regional Victoria, are one of the many families who are struggling to access care for their daughter, who was added to waiting lists before she was born. 

At the time of her first birthday, she was number 88 on the waiting list, and Jack was left with no choice but to take on responsibility for little Mara’s care. 

“It was better for [Nikki] to go back to work for both money and time,” Mr Kennedy said.

“She works, you know, a 38-hour week and I was working like a 60-hour week and she gets paid a lot more than me so there’s no point in me going back to work.”

The Kennedy’s experiences are familiar ones to Ms Ritchie, who said she wasn’t surprised to learn of their story, and that while the activity test changes were welcomed, more needed to be done to address workforce issues in the ECEC sector, which she believes are impacting. 

“Our research has clearly told us there were plenty of qualified childcare workers who had left the industry because, not only was the pay not adequate, but they felt a lack of pride about being a childcare educator, or, as they termed it, a ‘babysitter,'” she said.

“We need to be building some sort of rapport with the future generations to be enticed to take that role on, to help them understand that being a childcare educator is one of the most important things you can do for society.”

Sector claims that there are plenty of spaces in most areas

Providers however claim that there are plenty of spaces across Australia in most markets, with the Early Learning and Care Council, after consulting its members, estimating there is current capacity to accommodate around 360,000 additional children to attend three days a week.

The Government is to establish a $1 billion Building Early Education Fund to support the development of ECEC services in communities with undersupply, particularly in rural and regional areas. 

The Parenthood has strongly supported the establishment of the Fund, with its spokesperson Maddy Butler saying more needs to be done for regional communities as a one size fits all system was failing families in those areas.

“Anecdotally, what we’ve heard is that there has to be at least an enrolment of 75 children to ensure that a provider can be sustainable and viable,” she shared with The ABC.

“In a lot of smaller, rural and remote areas, there aren’t necessarily those numbers, but even if there are 16 or six children who need care, that’s still a legitimate need.”

“What we really need is for the federal government to step up to take on a public management role of the system and ensure that there are services everywhere for every single child.”

This, she believes, will likely require supply side funding to shore up services in terms of sustainability, regardless of the number of children enrolled. 

“That means probably supply side funding … to ensure their sustainability so that services can continue to run no matter what enrolment numbers they have.”

Access the original coverage of this story here.