Election 2025 Education Policy Brief: Early Childhood Education & Care

Early childhood education and care (ECEC) is a key policy battleground for this year's federal election.

The last few years have seen a range of policy developments in early childhood education and care (ECEC) in Australia. Subsidies have increased for many families, educators have received a pay increase, and access has been expanded through recent ‘Three Day Guarantee’ reforms. 

Removing the barriers to accessing care has been central to the most recent policy reforms, signifying that the key legislative foundations for a ‘universal’ system are now in place. Yet ECEC remains in constant flux, with ongoing changes shaping affordability, availability and quality. 

As a result, families, providers and policymakers alike are navigating an evolving system that continues to demand attention and action. Debates over fees, workforce shortages and equitable access have kept ECEC consistently high on the policy and political agenda. As the election heats up, the key battles will be over cost-of-living relief on fees and the role of government in shaping the sector.

Of course, ECEC is not just about childcare, or education, it is also about workforce participation, gender equality, the cost of raising a family and the household budget. That is why it has stayed on the political radar since the last election, and why no party can afford to ignore it. 

The timing of this election comes at a crucial stage for ECEC in Australia, with the outcome likely to determine whether a universal system becomes a reality.

What are the current issues in early childhood education & care?

Inequitable access is still creating barriers for families

For many families, the biggest barrier to ECEC is access. Mitchell Institute research shows that nearly one in four Australian families live in a ‘childcare desert’, where more than three children compete for every available place. These access shortages tend to be most acute in regional areas, outer suburbs, and lower-income communities where private providers may be less likely to set up due to lower profit margins. The result is that access to early learning, along with its lifelong developmental, social, and economic benefits is determined by geography rather than need.

The impact of childcare deserts extends beyond families to workforce participation, particularly for women. When access is limited, families, especially mothers, are often forced to reduce work hours or leave the workforce altogether, exacerbating gender inequities in employment and earnings. Despite widespread recognition of this issue, policy responses to date are only providing stop gaps, not systemic change.

The market-first approach assumes private providers will expand naturally to meet demand, but the data shows this is not happening in many communities. 

Labor has focused on affordability measures, increasing subsidies and workforce investment, but without a targeted strategy to expand services in high-need areas, childcare deserts will persist. 

The Greens have proposed a publicly funded ECEC expansion, arguing that access should be guaranteed rather than left to market forces.

Despite the proposed addition of new 160 centres under Labor, the lack of clear policy interventions to improve equitable childcare supply means that barriers between families and the potential benefits of ECEC will be sustained. 

It also raises a critical question for this election: will any party take on the structural reforms needed to ensure that every child – regardless of postcode – has access to early learning?

Quality is a key issue

In a largely privatised market, families are expected to drive quality through consumer choice. The assumption is that competition will reward high-performing providers and push out weaker ones. However, when places are scarce, families cannot easily switch providers, limiting the effectiveness of market-driven improvements.

Quality in ECEC is overseen by the Australian Children's Education and Care Quality Authority (ACECQA), with centres rated as Excellent, Exceeding, Meeting, or Working Towards the National Quality Standards (NQS). While most meet or exceed the standards, media reports have raised concerns about centres rated below standard, including cases of neglect, underpayment, and poor care.

In response, the Greens have called for a Royal Commission while Minister Anne Aly has announced tougher rules for low-rated centres, including blocking new approvals and increasing compliance checks. The Government is also exploring restricting access to funding to providers not meeting the national standards.

Organisations such as the Australian Childcare Alliance support the strengthening of regulations and prioritising child safety.

The early years system needs to be more integrated

We know that the first three years are crucial to the learning outcomes of children.

ECEC is part of a broader system of child development in the early years that includes maternal and child health care and development. The question that remains largely unanswered is how to bring these parts together to address the needs of children, especially those experiencing disadvantage.

Social Ventures Australia recommend that ‘Early Childhood Hubs’ are needed in communities experiencing high levels of disadvantage and additional needs. These hubs would deliver wraparound services for families, including early childhood education and care, allied health, and family and parenting supports. It is proposed that funding from the Building Early Education Fund could be directed towards hubs, starting with the 131 communities identified in the analysis as high need.

Lowering out-of-pocket costs for childcare 

Labor have described their policies as building a ‘universal’ system, similar to Medicare or the National Disability Insurance Scheme (NDIS). This is especially important, because although the out-of-pocket amount paid by families for childcare depends on a range of factors, the cost of childcare has risen steadily over time. Rather than continuing with a subsidised model, some argue Australia should shift to a flat-fee approach like Quebec’s $10-a-day childcare.

No policy changes have been made yet, but momentum is building around a flat-fee childcare model, with Labor proposing a $10–$20 per day rate if re-elected. The Coalition has not responded directly to this proposal, though it has promised lower out-of-pocket costs and better access in underserved areas. The Productivity Commission estimates a $10 flat fee would cost an additional $8.3 billion annually. The Coalition continues to support the Activity Test, arguing it balances targeted support, a safety net for vulnerable families, and quality learning. 

The ECEC workforce needs more support

Early childhood educators are central to delivering quality ECEC. Under the National Quality Framework, all must hold at least a Certificate III, with half requiring diploma-level qualifications and most centres needing two degree-qualified teachers.

A 2024 Jobs and Skills Australia report found current workforce levels unsustainable. Meeting future demand – especially under the ‘Three Day Guarantee’ – will require workforce growth of 3% annually, and 5.4% for Early Childhood Teachers. 

Research that engages early childhood educators at different stages of their careers highlights that most early career educators with minimum qualifications are motivated to obtain diploma or higher level qualifications, but more study supports are needed. 

To explore and address ECEC workforce challenges, the Government has created the National Children’s Education and Care Workforce Strategy, ‘Shaping our Future’, which proposes strategies related to recognition, attraction, retention, qualifications and pathways, capability, wellbeing and data and evidence. 

What are the parties offering?

We have seen that in a system driven by market forces and competition, the pursuit of profit can push quality down instead of driving it up, leaving young children vulnerable in the process. Will this lead to greater support for non-profits, or will the market continue to dominate the sector’s direction?

As Australians prepare to vote on May 3, ECEC policy will come down to distinct party approaches to funding, access, and equity. 

Labor has put forward a plan to overhaul childcare subsidies and increase funding for ECEC to reduce the financial burden on families, especially low- and middle-income households. They have also made a significant commitment to raising wages for early childhood educators to address workforce shortages and improve care quality. 

In contrast, the Coalition argues that universal schemes are unsustainable, preferring a market-driven approach to support affordability by incentivising competition among private providers. They focus on targeted subsidies, which they argue would ensure that the financial burden on taxpayers remains manageable. Their reluctance to embrace universal access echoes their broader economic philosophy that favours free-market principles over state intervention.

The Greens advocate for a far more progressive, fully publicly funded ECEC system, eliminating fees and providing universal access to all families. They also call for greater investment in the workforce, ensuring fair pay and conditions for educators. The Greens’ proposals would dramatically shift the current system, which they argue is fundamentally inequitable under its current market-based structure.

The debate over workforce reform remains a major point of contention, with Labor and the Greens focusing on raising wages and improving working conditions for educators, while the Coalition suggests more indirect, market-based solutions, including tax incentives for providers. 

The major differences highlighted here reflect a broader philosophical divide between those who see ECEC as a fee for service market and those who view it as a fundamental social and educational right.