Budget 2024–25: Next steps to building universal early childhood education and care

The Australian Government’s investment last year in Cheaper Child Care has seen out-of-pocket costs fall and benefitted more than one million families.

The 2024–25 Budget continues to build on these initiatives by investing in building strong and sustainable foundations for future reforms.

The new measures are expected to deliver net savings of $410.7 million over 4 years from 2024–25 by strengthening the payment and accuracy of the Child Care Subsidy (CCS) program. 

The government has committed to provide funding towards a wage increase for the early childhood education and care workforce. Details will be finalised following consideration of relevant Fair Work Commission processes. The government will invest $30.0 million over 2 years from 2024–25 in IT and payment services to deliver on this commitment.

The government will consider the recommendations of the ACCC’s report into the costs of early childhood education and care alongside the Productivity Commission’s inquiry, which is due to government by 30 June 2024.

Strengthening payment and accuracy

Funding over 4 years from 2024–25 for integrity measures includes:

$84.2 million (and $18.4 million per year ongoing) for the Department of Education to:

  • bolster education, audit and compliance activities
  • mandating direct collection of gap fees by Family Day Care and In Home Care providers from 1 July 2025.

$8.3 million (and $1.2 million per year ongoing) for Services Australia to upgrade the Child Care Subsidy System to support new compliance measures.

$4.8 million for the Australian Taxation Office to ensure satisfactory engagement by ECEC providers with the Australian tax system.

$1.3 million (and $0.3 million per year ongoing) for the Australian Transaction Reports and Analysis Centre to help identify people who have high unexplained wealth with connections to the ECEC sector.

Learn more about strengthening payment and accuracy

Support for children with additional needs

A further $98.4 million will be provided through the Inclusion Support Program (ISP). This funding will help meet expected demand for services to support children with additional needs.

While all ECEC services must be inclusive, some need extra support. ISP helps services implement inclusive practices. One way it does this is by helping services engage additional educators to address barriers to inclusion.

Demand for the program has grown significantly over the last 4 years, with more than 19,000 children and about 5,600 services supported in 2022–23.

This additional funding will ensure the program continues to support services to include children with additional needs.

The government will also consider access and inclusion in its response to the Productivity Commission inquiry into Australia’s ECEC system.

Learn more about the Inclusion Support Program