Plan for Cheaper Child Care

The Australian Government has committed to measures to make child care more affordable, protect Child Care Subsidy (CCS) against fraud and non-compliance, and to improve conditions for the early childhood education and care (ECEC) sector.

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Changes to Child Care Subsidy

The Australian Government announced in the Federal Budget on 25 October 2022 it will spend $4.5 billion* to deliver more affordable child care, including by increasing Child Care Subsidy (CCS) rates from July 2023.

Under the Plan for Cheaper Child Care, the Government will:

  • lift the maximum CCS rate to 90% for families earning $80,000 or less
  • increase CCS rates for around 96% of families with a child in care earning under $530,000
  • increase transparency in the sector by requiring large providers to report revenue and profits, and commercial leasing information
  • crack down on fraud and non-compliance
  • invest $33.7 million to increase subsidised ECEC to a minimum of 36 hours per fortnight for families with First Nations children.

These measures will take effect from July 2023, subject to legislation passing through the Australian Parliament.

Read more about what was announced in the Federal Budget in our announcement.

*This figure is the net cost of the measures in the Cheaper Child Care Bill. The Budget Papers refer to an investment of $4.7 billion, which includes all new spending measures on early childhood education and care. It does not include savings from measures to increase integrity.

First Nations

The Government announced in the Budget it will spend:

  • $33.7 million to increase subsidised ECEC to a minimum of 36 hours per fortnight for families with First Nations children
  • $10.2 million to establish a partnership between Australian governments and First Nations representatives to develop community-led policies and programs.

Australian Competition and Consumer Commission price inquiry

The Australian Government announced in the Federal Budget on 25 October 2022 it will spend $10.8 million to fund the Australian Competition and Consumer Commission to investigate the drivers of early childhood education and care costs.

Read more about the 2023 ACCC price inquiry.

Productivity Commission review

The Productivity Commission will conduct a comprehensive review of the ECEC sector, with the aim of implementing a universal 90% subsidy for all families.

Integrity measures

The Australian Government will deliver the following measures to protect CCS against fraud and non-compliance:

  • Implement electronic funds transfer payment of gap fees (subject to the passage of legislation).
  • Strengthen whole-of-government collaboration to identify, investigate, disrupt and prosecute fraudulent and criminal operations.
  • Deliver increased education and early intervention activities to help providers who are trying to do the right thing to better understand their regulatory obligations and work to address any compliance concerns.

We are also taking action to improve transparency of child care costs by:

  • ensuring StartingBlocks.gov.au includes
    • every approved provider
    • real-time child care fee data and quality ratings
    • average year-on-year fee increases.
  • stopping providers from offering non-educational enrolment inducements.

StartingBlocks.gov.au is a free national website that helps parents choose the best education and care for their children. It’s the only place to find information about approved early childhood services.

Early Years Strategy

The Early Years Strategy will create a whole-of-government approach to the early years. It will set out the government’s vision for the future of Australia’s children and their families.

The strategy will examine programs and funding delivered by the Australian Government that impact early childhood development. It will identify ways to:

  • reduce program and funding silos across departments
  • better integrate and coordinate functions and activities across government
  • deliver better outcomes for young Australians and their families.

The Minister for Social Services, the Hon Amanda Rishworth MP, and Minister for Early Childhood Education, the Hon Dr Anne Aly MP, will jointly lead the development of the strategy.

Read more about the Early Years Strategy on the Department of Social Services website.