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Post-election: What Labor’s win means for early childhood education and care
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May 06, 2025
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The Australian Labor Party’s re-election delivers policy continuity and renewed momentum for early childhood education and care (ECEC). With a second term now confirmed and a strong mandate from voters, Prime Minister Anthony Albanese is expected to advance the next phase of his early years reform agenda.
Labor's first term brought landmark changes in affordability, workforce conditions and access. Now, the sector is looking ahead to how these reforms will be embedded, scaled and strengthened. The Prime Minister has previously stated he wants universal early learning to be a defining legacy of his leadership.With major measures already legislated, including cheaper child care, educator wage support and the Three Day Guarantee, the next phase of reform will focus on implementation. Attention will also turn to how these changes intersect with national priorities on education, equity and workforce participation.
For the ECEC sector, this result provides an opportunity to plan with greater confidence. After a decade marked by fragmented policy, the continuation of Labor’s early years platform offers rare stability and positions early learning as a sustained national priority.
What has happened: Labor’s early years reforms in motion
Since taking office in 2022, the Albanese Government has introduced significant reforms to early learning affordability. Child Care Subsidy (CCS) rates have increased for more than one million families, while the annual subsidy cap has been scrapped. As a result, average out-of-pocket costs have dropped by more than 13 per cent.
The government also introduced the ECEC Workforce Retention Payment, a federally funded wage subsidy that delivers a 15 per cent pay rise for early educators over two years. Designed to help services retain staff, the initiative has contributed to easing educator shortages that followed the COVID-19 pandemic.
Legislated in early 2025, the Three Day Guarantee will take effect from next year. The reform entitles every child to 72 hours of subsidised early learning per fortnight, regardless of their parents’ work or study status. This marks a significant change in how entitlements are structured.
The removal of the Activity Test for these hours has also been widely welcomed. Long viewed as a barrier for low-income and vulnerable families, the test’s removal supports broader participation and aligns with evidence on the long-term benefits of early learning.
What comes next: equity, access and implementation
With the election outcome now settled, focus shifts to how the next wave of reform will unfold. The final reports from the Productivity Commission and Australian Competition and Consumer Commission (ACCC) are expected to help shape policy decisions in this term.
Both reviews have identified ways to strengthen the current system. Recommendations include providing 100 per cent CCS for low-income families, increasing oversight of provider fees and improving transparency around quality and pricing. The government is now expected to consider these proposals in its next phase of policy design.
Access continues to be a critical issue. Nearly one in four families live in child care deserts, areas where care is scarce or unavailable. This remains especially pronounced in regional, remote and lower-income communities, where many families face long waitlists or must travel to find a place.
The government’s $1 billion Building Early Education Fund is intended to help address these shortages. Close coordination with state governments and the not-for-profit sector will be essential to ensure new places are created where they are most needed and that service quality remains strong.
Looking ahead: Labor’s long-term vision for early learning
While key reforms for the next 12 months have already been legislated, questions remain about Labor’s longer term direction. One area of interest is whether the government will revisit proposals for supply side funding models, including a $10 a day price cap. These ideas were raised prior to the Productivity Commission’s call for more gradual change.
Prime Minister Albanese has made clear his commitment to building a universal early learning system. He has previously described early education as core national infrastructure and said that access to child care should be as natural and accepted as access to a public school.
Whether that vision includes a shift away from the current market-based subsidy model is not yet known. However, with strong parliamentary support and continued public backing, the government is well positioned to pursue further reform if it chooses to do so.
For now, the sector is likely to benefit from a period of rare policy stability. Providers, educators and families can plan around known reforms, even as broader questions of access, funding and system design remain on the table.
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