Federal Budget 2021

The Australian Childcare Alliance (ACA) NSW is pleased to advise that the following were announced in the Federal Budget released on 11 May 2021:

• $1.7 billion over five years from FY2020/2021 (and $671.2m per year ongoing) to assist families by reducing out-of-pocket costs and supporting parental choice through increasing the Child Care Subsidy (CCS) rate by up to 30% for the second child and subsequent children aged five years and under in care, up to a maximum CCS rate of 95% for these children, commencing on 1 July 2022 and removing the CCS annual cap of $10,560 per child per year commencing on 1 July 2022. [See Budget Paper No.2, Part 2 - Payment Measures, Page 81]

• Guaranteeing Universal Access to Preschool funding increases from $156.4m (FY2021/2022) to $472.2m (FY2022/2023), $486.7m (FY2023/2024) and $523.3m (FY2024/2025). Funding will be contingent on the states and territories agreeing to a robust reform timeline focused on increasing participation and school readiness. From 2023 this will include ensuring that every child enrolled in an approved preschool program will see the full benefit of Commonwealth funding (around $1,340 per child in 2022) regardless of the preschool setting. From 2024 payments to states and territories will be tied to attendance targets. A preschool outcomes measure will be developed and trialled for introduction in 2025. [See Budget Paper No.2, Part 2 - Payment Measures, Page 91]

• The above Universal Access measure also includes $33.6m over five years from FY2021/2022 (and $2m per year ongoing) to improve preschool data collection and underpin a new preschool framework to support the reform. This includes funding to develop and trial a method for testing the degree to which preschools achieve the outcome of getting children school-ready. [See Budget Paper No.2, Part 2 - Payment Measures, Page 91]

• Addressing Workforce Shortages in Key Areas (JobTrainer Fund) extension – $300m (FY2021/2022), $200m (FY2022/2023), to be matched by contributions from the states and territories, to deliver around 163,000 additional low fee and free training places in areas of skills need. [See Budget Paper No.2, Part 2 - Payment Measures, Page 88]

• $16.9m over four years from FY2021/2022 (and $0.6m per year ongoing) to streamline the child care regulatory system by building a single government website to better inform families’ choice of care, to reduce the administrative burden on providers and families that can arise from changes in Child Care Subsidy eligibility, and to pilot with two state or territory governments a more aligned approach between regulators. [See Budget Paper No.2, Part 2 - Payment Measures, Page 68]

• $5.1m over four years from FY2021/2022 (including $1.8m in capital funding in FY2021/2022) to expand eligibility and flexibility of the Family Support Package which provides services to support veterans and their families in crisis including child care, child psychology and home help services. [See Budget Paper No.2, Part 2 - Payment Measures, Page 195]

Other announcements relevant to Early Childhood Education and Care service providers include:

• the Federal Government extending temporary full expensing for an additional year until 30 June 2023. Temporary loss carry-back is also being extended to include the FY2022/2023 income year. 

• assisting small businesses to pause or modify Australian Taxation Office debt recovery actions, the Federal Government is broadening the Administrative Appeal Tribunal’s (AAT) powers to pause or modify such actions until the underlying dispute is resolved.

• the wage subsidy scheme for apprentices is being expanded by 100,000 places. Under the program, employers will be reimbursed 50% of an apprentice’s or trainee’s wage for the first year, up to a cap of $7,000 a quarter.

The Federal Budget 2021 announcements will also be further explained during upcoming ACA NSW Network Meetings.

For further information/clarification, members of the Australian Childcare Alliance (ACA) NSW can contact the ACA NSW office on 1300 556 330 or nsw@childcarealliance.org.au.

PUBLISHED: 11 MAY 2021