Comparison of childcare reforms

Comparison of Childcare reforms


The Labor Party’s child care changes will begin on 1 January 2017

The Liberal National Parties’ child care changes have been delayed and will not begin until one year later than previously promised - on 1 January 2018


Labor wants to increase the Child Care Rebate cap from $7,500 to $10,000.  This cap amount has been frozen since 2008.

Nearly 100,000 families had already reached their cap by the time the May budget was delivered – meaning that 100,000 families are paying full fees for child care for the months of May and June.  This is a major hit to family budgets.

The Labor Party will also increase the Child Care Subsidy by 15%.

Liberal Party plan to combine the Child Care Rebate and Child Care Benefit to a single, means-tested Child Care Subsidy. The subsidy will range from 85%-20%.

For example:

  • Under Labor’s plan, all 813,000 families that rely on the Child Care Benefit will be better off – an increase up to $31 per child per week, or up to $1,627 per year.
  • Under the Coalition’s plan, families earning between $65,000 and $170,000 are to be around $30 a week better off.

Activity test:

The Liberal Party plans to introduce an ‘activity test’ that will mean child care hours subsidized will be tied with the number of hours of ‘activity’ that the parents complete. Fewer hours of ‘activity’ mean fewer hours of subsided early learning.

Labor has rejected the idea of an ‘activity test’ and will guarantee two days a week care.

Valuing early learning

Labor has announced a $150 million investment towards developing the early education workforce – developing a new Early Years’ Workforce Strategy, and establishing a national Educator Professional Development Program. Labor will also make submissions to the Fair Work Commission proceedings in support of professional wages for early childhood educators.

The Liberal Party has indicated they will implement the National Quality Framework. However, their strategy is significantly more focussed on workforce participation rather than early learning.

More information

You can find more information about Labor’s policy here:

You can find more information about the Liberal National Parties’ policy here:

For a detailed look at the winners and losers of the Coalition’s childcare reforms you can find an article by the UNSW on our blog here.