Anthony Albanese announces $1bn fund to build childcare centres, promises families three days of subsidised child care

Anthony Albanese has committed a $1bn cash splash to build early education centres, accompanying Labor’s election pitch to guarantee three days of subsidised child care for most young families.

Revving up Labor’s re-election campaign, the Prime Minister said the $1bn fund would initially be used to build or expand more than 160 education and care centres, with the funding directed at state and territory governments and not-for-profit providers.

“This is the single, biggest investment by an Australian government ever in new childcare services,” Mr Albanese said on Wednesday in a major speech at Brisbane’s Morningside Panthers AFL Club in the Greens-held electorate of Griffith.

Providing Labor maintains government, the Building Early Education Fund will be rolled out from July 2025 and prioritise services co-located at existing school sites.

Mr Albanese said this would allow families to co-ordinate school drop-offs in families with multiple kids and also allow families to access services like maternal and child health at the same place, adding that it was a commonsense proposition.

“Centres on school grounds build a link between early education and primary education. It makes sense,” he said.

“They give children a sense of confidence and connection with their local school and they make life easier for parents doing drop-off and pick-up.”

Mr Albanese also vowed that a re-elected Labor government would also give households with a combined income of less than $530,000 access to three days of subsidised care, replacing the Coalition’s activity test.

Mr Albanese said current measures placed an “extra weight” on parents looking for work and locked children out of early education programs, which are critical for developing social and learning skills before primary school.

“Too often, the children missing out on early education are the ones for whom it would make the biggest difference,” he said.

“Instead by the time they start school, they’re already on the back foot.

“I know this for certain: Parents do not need to work a certain number of hours a week to want the best possible education for their child.”

Wednesday’s announcement follows a Productivity Commission report that charted a path to universal early childhood education and said the activity test did little to increase workforce participation.

It also called for all households to get at least three days of early childhood education and care regardless of their parents’ income.

It recommended a 100 per cent subsidy for households with an annual income less than $80,000 (currently at 90 per cent), and for subsidies to increase for households with incomes between $80,000 to $580,000.

Separately, Labor has passed laws that will boost the wages of early childhood education and care workers by 15 per cent over two years in an attempt to boost workforce numbers.

The $3.6bn policy will increase wages in two stages, with a 10 per cent bump from December 2024 and a further 5 per cent uptick in December 2025.

For centres to access the wage rise funding, they must commit to not increasing their fees by more than 4.4 per cent between now and August 8, 2025, and not increasing costs to parents by 4.2 per cent in the following 12 months.