Labor’s Plan for Cheaper Child Care

An Albanese Labor Government will deliver cheaper child care to almost every family in the system after locking in a more generous subsidy rate for families with more than one child under six if Labor forms government.
 
In his first Budget Reply speech as Leader, Anthony Albanese announced Labor’s plan to deliver cheaper child care by increasing the maximum subsidy rate to 90 per cent for families up to $80,000, removing the annual subsidy cap, and smoothing the taper rate down more gradually from the new 90 per cent rate.
 
Scott Morrison was dragged into making modest changes to the system in the 2021 Budget, which matched Labor’s policy to remove the subsidy cap and introduced a higher subsidy for families with more than one child under six – changes which meant hundreds of thousands of families missed out on more support.
 
Labor will lock this higher rate in – meaning under Labor, 96 per cent of all families in the system will be better off. 1.26 million families will be better off – five times more than under the Morrison Joyce Government.
 
Labor’s plan for Cheaper Child Care will:

  • Lift the maximum child care subsidy for one child care;
  • Increase CCS rates for every family with one child in care earning less than $530,000 in household income; and
  • Lift CCS rates for the second and more children in care.

Importantly, Labor’s policy extends to outside school hours and vacation care – which miss out under the Liberals.
 
Labor also get the ACCC to design a price regulation mechanism to drive out of pocket costs down for good, and the Productivity Commission will conduct a comprehensive review of the sector with the aim of implementing a universal 90 per cent subsidy for all families.
 
Scott Morrison’s child care system has completely failed Australian families.
 
The cost of child care has never been higher than it is now.
 
Over the past 12 months, child care costs soared by 6.5 per cent – almost double the rate of inflation. Fees have increased by 41 per cent since the Liberals formed government. For the average family, this means they are paying almost $5,000 more in fees.
 
Child care costs are eating a bigger and bigger hole in household budgets and are putting more financial strain on Australian families.
 
Under Scott Morrison’s recent changes to the subsidy, hundreds of thousands of families will miss out on relief compared to Labor’s Cheaper Child Care Plan. And the Government still has no plans to control fees in the future.
 
Only Labor has a plan to fix child care.
 
We also know that improving our child care system is a fundamental economic reform that will boost workforce participation and drive productivity growth.
 
Conservative estimates show a return on investment of $2 for every $1 invested, and economists have estimated a GDP boost of between $4-$11 billion per year.

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