Parents will have access to three days of guaranteed subsidised childcare after Labor was pressured to bring the new laws forward ahead of the federal election.

In what might be the final parliamentary sitting day before the election, due by May 17, the Albanese government's signature policy passed the parliament on Thursday, February 13, after the Greens brought on a vote.

The changes kick in from January 2026, and remove the current Activity Test to guarantee subsidies for families earning up to $530,000 in a bid to lay down the foundations for a universal early education system.

The Coalition did not back the legislation on the grounds it would replace the Activity Test – a process the party introduced. Opposition treasury spokesperson Angus Taylor said ditching the Activity Test was “not something…the country can afford”.

Activity levels are used to determine how many hours of subsidised childcare people are entitled to each fortnight.

💲Here is the current situation with costs💲

• The current average daily cost for childcare services in the eastern suburbs is about $154.40, before receiving any subsidies.

• From November 2023 to November 2024, early childhood education and care fees have increased by 10.6 per cent.

• The Federal Government has capped fee growth at 4.4 per cent between August 8, 2024 and August 7, 2025. The cap will drop to 4.2 per cent between August 8, 2025 and August 7, 2026.

• Until the new regime begins in January 2026, the maximum amount subsidised per fortnight remains at 100 hours (about 10 days of long daycare), but this requires both you and your partner to work at least 48 hours per fortnight.

• If you (the person with the lowest amount of activity between you and your partner) work or study less than eight hours per fortnight, the maximum you can claim is 24 hours of daycare (about 2.4 days of long daycare).

✅ Changes welcomed

Early Childhood Education Minister Anne Aly told Question Time the sector had been in desperate need of an overhaul.

"We have made significant progress in reforming the sector across those three pillars of affordability, accessibility and a sustainable workforce, towards a vision of a universal early childhood education care sector that is simple, affordable and accessible," she said.

The Secretariat of National Aboriginal and Islander Child Care’s Chief Executive Catherine Liddle said the legislation had removed the "barrier" of the activity test.

"When our children and our families are supported through access to wrap-around services in Aboriginal community-controlled centres, studies show we get better outcomes for those children not only in the early years, but throughout their life," she said.

The Parenthood Chief Executive Georgie Dent said the activity test was "completely misaligned" with reality.

"At least 126,000 children, many from low-income, First Nations or single parent families, are excluded from receiving early childhood education during their most formative years, entrenching inequality and costing the government more," she said.

Expanded subsidies means the amount of support granted for childcare rose to up to 90 per cent of costs for families earning up to $80,000.

👶 How local politicians and candidates are approaching childcare reform this election

Across Melbourne’s eastern suburbs, Independent candidates like Claire Ferres Miles and Jess Ness are both running on election pledges that promise childcare reform. Miles told the Eastern Melburnian in January that 72 per cent of the electorate is classified as a childcare desert, meaning an area where there are more than three children per childcare place, and is campaigning for a wage increase for early childhood workers.

Casey MP Aaron Violi said he has been calling on the government to increase the childcare supply and bring down costs for families.