The proposal has three parts.

• Part 1 has two components that relate to the Preschool Reform Funding National Partnership Agreement (NPA) which determines Commonwealth and state and territory (state) government funding for preschool attendance. The current NPA begins in 2022 and ends in 2025. The Commonwealth has also committed ongoing funding through the 2021-22 Budget measure – Guaranteeing universal access to preschool.
  • Component 1 would make preschool funding for four-year-old children ongoing and would provide free access for up to 24 hours per child per week across all preschool settings. The current roles and responsibilities of the Commonwealth and states would remain unchanged.
  • Component 2 would provide ongoing preschool funding to allow free access to preschool for three-year-old children for up to 24 hours per child per week across all preschool settings. The current roles and responsibilities of the Commonwealth and states would also apply to three-year-old children.
  • Part 1 would also result in a decrease in expenditure on the Child Care Subsidy (CCS) as families substitute from childcare to preschool settings.
• Part 2 would provide to all families 100 hours per fortnight of childcare fully subsidised up to the existing CCS hourly fee-cap. The CCS activity test, income test and annual fee cap would all be removed.
• Part 3 would provide $200 million of grant funding to reduce waiting lists for community and non-profit (including local government-run) childcare centres by increasing the number of spaces they offer. Grants would assist with capital works or increased workforce, depending on the specific needs of individual centres. This funding would be targeted towards high-need areas, where the gap in availability is greatest.

The proposal would have effect from 1 January 2023.