Preschool Reform Funding Agreement

The Australian Government and all states and territories have agreed to the Preschool Reform Agreement, a four-year national reform agreement to strengthen the delivery of preschool and better prepare children for the first year of school. The agreement runs from 2022 to 2025.

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About the agreement

The Preschool Reform Agreement, announced as part of the 2021–22 Budget, locks in Commonwealth funding for preschool to the end of 2025. It also commits to reforms to improve preschool participation and outcomes.

Commonwealth funding

Under the agreement, the Commonwealth will continue to provide a per child contribution to states and territories. In 2022, this will be around $1340.

This funding supports the delivery of 15 hours of preschool a week – 600 hours a year – for all children in the year before they start school.

Under previous agreements, states and territories could use Commonwealth funding flexibly to support the provision of universal access. This resulted in different costs for families across Australia.

Under the new agreement, state and territories must pass on the Commonwealth’s per-child contribution to benefit children in the setting in which they attend.  

This reform is designed to create greater funding equity for families and children across Australia.

Improving attendance and outcomes

Under the agreement the Commonwealth and states and territories have agreed to pursue an ambitious reform agenda that aims to lift preschool enrolments and attendance and maximise the benefits of preschool.

From 2024, the Commonwealth will work with state and territory governments to establish new bilateral preschool attendance targets.

The Commonwealth will also work with states and territories to develop, trial and implement a preschool outcomes measure.

To support these reforms, the Commonwealth will spend an additional $28.7 million to:

  • improve the quality and transparency of preschool data available nationally, and
  • develop a new Preschool Performance Framework.

Benefits of the agreement

Children who engage in quality early childhood education are better prepared for school and enjoy better educational outcomes.

Data from the Australian Early Development Census (AEDC) indicates that preschool reduces the number of children who are not ready to start school by about 10%.

Preschool particularly benefits:

  • Aboriginal and Torres Strait Islander children
  • children from disadvantaged families and communities.

In 2019, 96% of children were enrolled in 600 hours of preschool. This was a significant increase from 12% in 2008.

However, enrolment rates do not always translate to full participation or maximum use of the 600 hours. In 2019, only 72% of the families of children enrolled in preschool used the full 600 hours per child. Attendance rates for were even lower for Aboriginal and Torres Strait Islander children and vulnerable and disadvantaged children.

Measuring outcomes

The Preschool Outcomes Measure Expert Advisory Group has been established to advise the Australian Government on how to measure the benefits of preschool.

The group is made up of members with local and international experience in early childhood development and education.


Professor Sharon Goldfeld

Director of the Population Health Theme, Murdoch Children’s Research Institute

Director of the Centre for Community Child Health, Royal Children’s Hospital

Professor Sally Brinkman

Co-director of the Fraser Mustard Centre, an initiative of the Telethon Kids Institute and South Australian Department of Education and Child Development

Professor Leslie Loble

Industry professor, University of Technology Sydney

Fellow of the Paul Ramsay Foundation

Dr Sandra Cheeseman

Chief Executive Officer of Creche and Kindergarten Association, Queensland

Dr Stacey Fox

Manager at Dandolo Partners

Dr Anne Kennedy

Fellow of the University of Melbourne, Graduate School of Education 

Dr Suzan Mentha

Lecturer, University of Melbourne, Graduate School of Education

Professor Manjula Waniganayake

School of Education, Macquarie University

More information can be found in the Preschool Outcomes Measure Expert Advisory Group Terms of Reference document.