The Coalition’s plan if elected, to reinstate the abolished childcare subsidy Activity Test has been slammed as poor policy that would see Australian parents lose guaranteed subsidised access to childcare. 

Reinstatement of the Activity Test could set Australian families back by restricting over 126,000 children, mostly from vulnerable backgrounds from accessing early learning. 

The Activity Test, introduced by the Coalition in 2018, requires parents to disclose how many hours they spend in recognised activities like work or study in order to be eligible for subsidised childcare each fortnight through the childcare subsidy (CCS). 

In effect, it has created a system where families need to already be working to access affordable childcare, ignoring the reality that many families first need affordable childcare to be able to re-enter work. 

“The Activity Test is an obsolete policy that has long prevented tens of thousands of children, especially those from vulnerable backgrounds, from accessing early learning,” said Maddy Butler, Campaign Director of advocacy organisation The Parenthood.

“It’s abolition has been supported by every corner of society, from business groups to unions to health advocates and beyond.”

The Productivity Commission, the Australian Competition and Consumer Commission, and the Women’s Economic Equality Taskforce all called for the Activity Test to be abolished. 

Federal Labor passed laws to abolish the Activity Test, guaranteeing families three days of subsidised early learning per week, regardless of their working conditions. The measures were not supported by the Opposition. 

Introducing three days of guaranteed childcare and removing the activity test is aimed to help to lift women’s participation in education and workforce participation, particularly in outer suburbs and in regional areas. 

Poor policy 

Bringing back the activity test for parents was poor policy and would hurt parents by cutting the cost-of-living relief measure, said ACTU Secretary Sally McManus.  

“The Coalition’s approach to taking this away will hurt thousands of women because the reality is that women still shoulder most of the caregiving load while families seek more flexible work arrangements.”

The Greens slammed the Coalition’s plan to reinstate the Activity Test as a failed Morrison-era policy that disproportionately hurts single parents, families in insecure work, and those already out of the workforce.

“Reinstating it would be cruel and a massive step backward away from universal access to childcare,” said Australian Greens spokesperson for early childhood education and care, Senator Steph Hodgins-May.

“The activity test unfairly punishes low-income families, especially those in insecure work or trying to re-enter the workforce, by creating a catch-22 where parents can’t get childcare without a job and can’t get a job without childcare.” 

The Greens have committed to making free, universal early childhood education and care a priority in the next Parliament, with a plan to provide 50 hours of free care a week for every child and to treat early education like public schooling, moving away from the complex and broken CCS altogether. 

“We know that accessible, high-quality early education benefits children, strengthens the economy, and eases cost-of-living pressure – especially for women,” said Senator Hodgins-May.

The Minderoo Foundation described the Opposition’s childcare plan as “one step forward, one step back”. 

“Investing $1 billion to expand early childhood education and care options for families living in childcare deserts will be a gamechanger for rural families and all those who cannot currently access care,” said Griffin Longley from Minderoo Foundation’s Thrive by Five campaign. 

“However, we have serious concerns that bringing the activity test back would penalise single parents, First Nations families and others who experience disadvantage.

“The Activity Test was designed as an incentive to get into work but it did the opposite. It made life harder for families already facing significant hurdles and that is why it was abolished.” 

It would also prevent up to 40,000 primary carers, predominantly women, from re-entering the workforce, he said.  

Research by Impact Economics in 2023 showed that removing the activity test would boost women’s employment and lift GDP by an estimated $4.5 billion a year. 

Cutting fee-free TAFE

The Coalition has committed to cancel free TAFE if elected, which already has 40,000 students enrolled in courses on early childhood education and care. 

“In addition, they are scrapping free TAFE, which is essential for workers in the early childhood sector. This decision will not only have a big financial impact on the care workforce, it will also make accessing childcare harder for all families, as centres will struggle to employ qualified workers,” said ACTU Secretary Sally McManus. 

View The Parenthood election scorecard here