This article has been syndicated from our national masthead, the National Account, with additional reporting. Read more here.

Ninety percent of human brain development happens by age five. Access to affordable, high-quality childcare is critical — not just for kids, but for Australia’s future economy.

As part of Labor’s election pitch, the party is promising to scrap the “activity test” for subsidised childcare, starting January 2026.

With those changes, households earning under $533,280 annually will be eligible for three days of subsidised care a week — regardless of work, study or volunteering hours.

The Coalition on the other hand has announced it will provide $100 million to expand the childcare sector if it is elected this weekend.

The state of childcare in Gippsland

Even if there were subsidies to care for children, there is no guarantee that children would have a spot at a childcare facility. Nowhere is this more the case than Gippsland.

Research released in September 2024 by advocacy group The Parenthood told of mothers in rural Australia quitting their jobs at schools and hospitals due to a dearth of childcare, or even re-training in early education to fill the gap themselves.

The Parenthood polled 855 regional, rural and remote parents. Eighty-six percent struggled to access care and said the lack of access caused financial stress.

The Isolated Children's Parents' Association (ICPA) has also called on commitments from all sides of politics.

In Traralgon, between 2.52 and 3.99 children compete for each childcare place, depending on the neighbourhood, according to a report by the Mitchell Institute at Victoria University.

Greens senator Steph Hodgins-May said “in South Gippsland, like in so many communities across Victoria, children are slipping through the cracks.”

Price Tag of Labor’s plan

Labor estimates that the cost of scrapping the test will be $427 million over five years.

The Productivity Commission, however, forecasts a much bigger price tag: $1.1 billion a year.

Despite the cost, the commission still backed the removal of the test in its final report.

Labor's position

The Labor government believes scrapping the activity test will help low-income families the most. 

Labor argues affordable and consistent childcare is critical for helping parents – especially women – return to work or study.

Critics of the Coalition’s stance argue the Activity Test would trap those lower-income groups of the population in a cycle of under-or-unemployment. Under the Activity Test, not having a job would mean you are not applicable for the childcare subsidy. However, without childcare, it would also remain harder to get a job as you must look after your children.

The Labor government is pushing to a broader goal of pushing the country to universal, free childcare, treating early education as a fundamental public service.

Labor claims 66,000 families will benefit from scrapping the test and will look to continue improving access for Australians.

The Coalition’s policy

The Coalition has pledged to reinstate the activity test if elected. It argues the test “rewards effort and aspiration” by linking childcare subsidies to participation in work, study and volunteering.

“Families working hard to create a better life for their children get nothing [under Labor’s plan],” said Angie Bell, the Coalition’s early childhood spokesperson.

Last week the Coalition announced that it would deliver $100 million to help fund the expansion of the childcare sector.

Leader of the Nationals, David Littleproud said in a statement that “Labor’s policies have completely neglected this reality. The guarantee of child care three days a week means absolutely nothing if you live in a community where you can’t even get one day a week.”

The Coalition says that under its plan funding will be available to support the set-up or expansion of flexible alternatives to the long-day care model, with potential models including;

• Allowing family day care educators to run care out of a community space, such as a town hall or library;

• Delivery in nature, such as bush kindy;

• Mobile day care; or

• Employer-supported models in workplaces.

Indigenous Child Care

The Secretariat of National Aboriginal and Islander Child Care warns that reinstating the test, as the Coalition wishes, would disproportionately harm Aboriginal and Torres Strait Islander families.

“Removing the test has the potential for wider impacts, with recent studies showing interventions in ECEC [early childhood education and care] settings with vulnerable children and their families may be the key to reducing youth crime,” said Catherine Liddle, CEO of SNAICC.

Economic impacts

Consultancy firm Impact Economics and Policy says nearly 40,000 women — could rejoin the workforce, as they’ll have time to search for work.

The GDP benefit could run into the billions of dollars, if barriers to childcare are removed, said Impact Economics and Policy.