ECEC sector responds to 2025 Budget, welcoming commitments to early learning

The early childhood education and care (ECEC) sector has responded to Tuesday’s Budget announcement, with some terming it “foundational for universal early learning and care.”

Australian Education Union (AEU), Independent Education Union of Australia NSW/ACT (IEU), the Australian Council of Trade Unions (ACTU), Early Childhood Australia (ECA), Uniting NSW.ACT, HESTA, and the Early Learning and Care Council of Australia (ELACCA) had all submitted responses to The Sector at time of press, congratulating Federal Treasurer Jim Chalmers, Federal Minister for Education Jason Clare and Federal Minister for Early Childhood Dr Anne Aly on the investment outlined in the Federal Budget for early learning and care. 

Budget builds on changes flagged in MYEFO

Much of the significant investment provided for the ECEC sector in the Federal Budget featured in the 2024-25 Mid-Year Economic and Fiscal Outlook (MYEFO) including:

• $3.6 billion to support a wage increase for the early childhood education and care workforce through the Worker Retention Payment.
• $1.0 billion over five years from 2024–25 to establish the Building Early Education Fund, including provisioning $500 million for future investments.
• $426.6 million over four years from 2025–26 for the 3 Day Guarantee, softening the Child Care Subsidy (CCS) Activity Test from January 2026 to ensure families are eligible for at least three days of CCS per week for early childhood education and care. (Noting ELACCA supported legislation passed by Parliament last month enabling this change).
• $10.4 million over three years from 2024–25 to develop an Early Education Service Delivery Price to enable the Government to better understand the cost of delivering services around the country.

Positioning of early childhood as foundational 

Respondents overwhelmingly welcomed the positioning of early childhood as being a foundational aspect of the education system, noting the inclusion of the following statement in the budget papers: Children’s participation in quality early childhood education and care has important developmental, social and educational benefits. It lays the foundation for children’s lifelong development and learning and supports long term productivity by increasing educational attainment.

Services Australia funding underpins system level change 

A number of respondents noted the additional $4.5 million funding allocated to Services Australia to make system changes to ensure consistency, following the passage of the 3 Day Guarantee legislation.

Building Early Education Fund

Tamara Pararajasingham, Director of Impact and Innovation at Uniting NSW.ACT welcomed the announcement of a $1 billion investment for early learning supply with a Building Early Education Fund to build more early learning services, especially in regional areas or areas experiencing under supply of early learning.

“However, addressing affordability and building new early learning centres alone is not enough to achieve universal and equitable access to quality early learning for all Australian children. There are one in 10 children who will still miss out on early learning due to non-financial barriers to enrolment,” she added.

“Uniting NSW.ACT is calling on both major parties to invest in a pilot program providing system navigators at 10 sites across Australia to help families overcome non-financial barriers and support them to engage with, enrol and participate in quality early learning.”

AEU Federal President Correna Haythorpe also welcomed the $1 billion funding for the Building Early Education Fund, noting that building and co-locating these services with public schools will ensure seamless educational experiences for young children.

“This forward-thinking approach acknowledges the importance of early childhood education in providing every child the educational foundations needed for their schooling journey,” she said.

“By building these facilities alongside public schools, the government is making a clear commitment to supporting the development of the whole child, from their earliest years through to their final years of schooling.”

Better outcomes for educators 

HESTA welcomed measures focused on improving outcomes for women, who make up the majority of employees in the ECEC sector, and providing further cost-of-living relief, as well as progress of key reforms to pay super on Commonwealth paid parental leave and at the same time as wages.

Speaking on behalf of the NSW/ACT Branch of the IEU Branch Secretary Carol Matthews described the Budget as one which would “help build and maintain a sustainable, high-quality education workforce,” at all levels including in ECEC. 

The ACTU noted the Budget commitment to ban the use of non-compete clauses in employment contracts which the union projects will further boost the wages of millions of low and middle-income working Australians, including those in ECEC.

Specifically, the union expects the ban is projected to increase wages by up to 4 percent, or $2,500 per year on average for affected workers.

“Three million workers are now looking forward to more freedom and higher wages because of the ban on non-compete clauses in employment contracts,” ACTU President Michele O’Neil said.

Missed opportunities for inclusion and child safeguarding

ECA was ‘disappointed’ to see no additional investment in inclusion support or inclusion capability, something which the advocacy body said is “widely recognised as an area of underinvestment and an impediment to universal access.”

A lack of investment in what ECA termed “system stewardship mechanisms,” such as the ECEC Commission proposed by the Productivity Commission, was also a disappointment, with the organisation saying such measures are “necessary to move us from a market-based model to a universal system with shared responsibilities for addressing supply, inclusion and equity.”

Finally, a lack of investment in stronger child safeguarding measures or regulatory enforcement in response to concerns about poor practice by some providers was noted, with the organisation saying such measures would be welcome by those committed to child safety and high-quality practice.