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Cheaper Child Care delivers major cost of living relief, with more reform on the horizon
Fiona Alston
Jun 27, 2025
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More than one million Australian families have seen a tangible reduction in the cost of early childhood education and care, two years into the Albanese Government’s Cheaper Child Care reforms.
According to federal ministers Jason Clare and Dr Jess Walsh, the reforms have already saved families thousands and the government is now rolling out additional workforce, access and infrastructure measures to further ease cost-of-living pressures and strengthen the early learning system.“For a family earning $168,000 with one child in care for 30 hours a week, out-of-pocket costs are now around $7,440 lower than they otherwise would have been,” Minister Clare said.
“This is good for children, good for families, and good for Australia.”A sector transformed but more to come
Since the 2022 election, the early childhood education and care (ECEC) sector has seen measurable growth. There are now:
- 1,200 additional early learning services in operation;
- 95,000 more children enrolled in early education programs; and
- 48,000 new early childhood educators and workers across the national workforce.
To support this growth and improve affordability, the government is:
- Delivering a 15 per cent pay rise for early educators;
- Capping annual fee increases for families; and
- Investing in targeted infrastructure and safety reforms to support quality access for all children.
From January 2026, the current Activity Test will be replaced with the 3 Day Guarantee, a major reform to the Child Care Subsidy system that will ensure eligible families receive at least three days per week of subsidised care, regardless of work or study status.
This change is expected to benefit more than 100,000 families. Those earning between $50,000 and $100,000 will save, on average, an additional $1,460 per year.
“The 3 Day Guarantee will ensure more children, particularly those from lower income households, have access to the learning, care and support they need,” said Minister for Early Childhood Education Dr Jess Walsh.
“Easing the family budget is one part of our reforms but we’re also focused on ensuring every child has the opportunity to thrive through quality early learning.”Infrastructure and child safety
The government is also launching a $1 billion Building Early Education Fund, aimed at increasing availability of care in high-demand areas, particularly outer suburban and regional communities where supply has not kept pace with demand.
In parallel, new mandatory child safety measures have been introduced to ensure safer environments for children and families reinforcing the importance of protective practices in ECEC settings nationwide.Toward a universal early education system
Minister Clare confirmed that the Cheaper Child Care reforms form part of a broader vision for universal access to early education in Australia.
“We’ve made child care cheaper for over one million families,” he said.
“We’re lifting wages to build and retain the workforce. And next year, we’ll roll out the 3 Day Guarantee to give more families access to subsidised care. This is a key part of our plan to build a universal early education system.”
Access the full media release here.
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