Labor Election win – what will it mean for ECEC in the short, medium and long term?

In light of the Australian Labor Party (ALP) Election 2022 success and the appointment of Anthony Albenese MP as the next Prime Minister of Australia the early childhood education and care (ECEC) sector is likely to get a significant boost, not just in terms of affordability measures for families, but also in focus over all. 

ECEC was a central element of Mr Albanese’s policy agenda  in the run up to the election and will remain central  to overall policy within the portfolio of longtime Shadow Minister for Early Childhood Education and Development Amanda Rishworth MP. 

This article aims to break down the impact the proposed policies might have on the ECEC sector in the short, medium and long term. 

Short term impacts – 0 to 12 months

There will be no immediate direct changes to how the ECEC sector is administered or child care subsidy is calculated in the days and weeks following the Election.

However, in a pre-election interview Amanda Rishworth MP made it clear that should the ALP win Government immediate action would be taken on three initiatives that, although not likely to impact the sector in the near term, could have significant ramifications over the medium and long term. 

• Action recommendations from ACECQA workforce strategy – The recommendations included in the National Children’s Education and Care Workforce Strategy released by the Australian Children’s Education & Care Quality Authority (ACECQA) in October will be examined closely with a view to actioning them to address the workforce shortages impacting the sector. 

• Develop a new whole of Government ECEC strategy – Steps will be taken to begin the creation of a dedicated early years strategy that will deliver on a range of outcomes including ensuring funding programs are appropriately administered and policies, initiatives and plans to help achieve ECEC outcomes are formalised. 

• Instruct the Productivity Commission (PC) to examine 90 per cent CCS subsidy for all families plan – As part of Labor’s Cheaper Childcare Plan the party has pledged to replace the current child care subsidy (CCS) eligibility requirements with a universal 90 per cent subsidy for all families. Accordingly the ALP will appoint the Productivity Commission to conduct a feasibility assessment to examine mechanisms to make this a reality. 

The outcomes of these initiatives and therefore the impact on the ECEC sector will not be known until the respective reviews have been completed. 

Medium term impacts – 12 months to 36 months

There will be important changes, some direct, some indirect, impacting the ECEC sector after 12 months and up to 36 months from now. 

From 1 July 2023 proposed changes to CCS income eligibility levels and subsidy percentages will come into effect with families earning between $354,305 and $530,000 per annum benefitting from the former and families at the lower end of the socio-economic spectrum benefitting from the latter. 

These changes will directly impact long day care, family day care and outside school hours care settings with demand increases expected in communities with concentrations of qualifying  families. 

The indirect changes likely to be felt in this period will be contingent on the outcomes of the Workforce Strategy review, the Early Years Strategy and the Productivity Review which should be delivered in the medium term time window. 

Importantly, with respect to the latter, significant changes may be proposed to current subsidy structures as well as pricing and provider transparency requirements so as to ensure the framework for a 90 per cent subsidy for all is in place which will impact both business as usual practices across the sector but financial dynamics as well. 

Long term impacts – 36 months plus

Over the longer term the ECEC sector can expect to feel the impact of the changes stipulated and recommended in the various reviews above. 

Assuming the spirit of Labor’s vision is visible through policy recommendations from the reviews and or/strategies the ECEC sector should feel a shift away from an affordability emphasis of policy towards a quality emphasis, an increase in overall demand levels as more families benefit from a 90 per cent subsidy threshold and an easier workforce landscape as an ALP focus removes bottlenecks preventing new talent joining the ECEC space.

To learn more about the ALP’s pre-election commitments as they relate to ECEC please see here.