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Childcare centres will have funding stripped if they’re not ‘up to scratch’. Is this enough?

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Author: 
Harper, Erin
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Article
Publication Date: 
23 Jul 2025
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Childcare centres will lose their eligibility for fee subsidies if they don’t meet safety standards, according to a new bill introduced to parliament on Wednesday.

As Education Minister Jason Clare told parliament:

"It will give us the power to cut off funding to childcare centres that aren’t up to scratch."

The bill follows recent allegations a Victorian childcare worker abused children in his care. There have also been allegations of abuse in centres in New South Wales and Queensland. Labor has warned lower house MPs it can expect late nights next week, to try to get this bill and the governments’ plan to cut HELP debts through parliament.

What’s in the bill? What does it mean for families? And what’s missing?

What’s in the bill?

Clare told parliament the federal government’s childcare subsidy currently covers about 70% of the average cost of running a centre.

This legislation gives the federal education department the power to suspend or cancel that funding if a centre “is not meeting the quality, safety and other compliance requirements,” according to the national system of early childhood regulation.

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What about the impact on families?

We also need to think about the practical consequences of the bill. If the childcare subsidy was removed from any service – whether they are private or not-for-profit – they would quickly become unviable.

Without the subsidy (which reduces out-of-pocket costs for parents), many families would not be able to afford childcare.

If a service is going to have access to the subsidy taken away, how much notice should families get? These details need thoughtful consideration.

If the federal education department is going to have a team of people doing checks on services, we also need to ask, how will this work? How quickly will they be able to do these checks? One of the issues with the current system is there are long delays between assessments. This suggests it will need careful planning and it will also cost some money.

The bigger picture
Beyond these questions, there is the bigger picture of childcare quality in Australia. The system is complex but people who educate and care for children are at the heart of it.

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Heavy and distracting workloads, along with widespread reports of understaffing and breaches to minimum staff-to-child ratios, makes it difficult for educators to keep children safe.

So meaningful reform must consider educators’ experiences, and include strategies to increase support for educators to do their jobs well.