The 3-Day Guarantee gives more families access to subsidised early education and care, but universality requires something more fundamental: a guaranteed place and a government responsible for providing it.
The Albanese government has named universal early education and care as a national objective. In December 2024 the prime minister announced $1.47 billion over five years: $426.7 million for a 3-Day Guarantee to replace the activity test, $1.03 billion for a Building Early Education Fund for new centres in outer suburbs and regional areas, and $10.4 million to study what it costs to deliver a service. The 3-Day Guarantee began in January 2026, and in July 2026 education ministers agreed to explore the establishment of a national Early Education and Care Commission.
Together these measures do not explain how a universal system will come into being. The 3-Day Guarantee secures eligibility for 72 subsidised hours a fortnight. It does not secure a place. A family in a growth corridor on Melbourne’s western fringe, or in a Mallee town whose only centre has closed its babies’ room for want of staff, holds an entitlement it has nowhere to spend. The government has universalised a payment and described the result as a universal system.
Australia already has two models of universality. Medicare made payment universal and left supply largely to private practitioners, with the gaps in bulk billing and rural general practice that follow. Public schooling made provision universal by placing a duty on state governments to have a school and a teacher available for every child. Labor borrows the language of the second model and the instruments of the first.
Australia treats early childhood education and care as essential social infrastructure, while organising it as a consumer market. Providers decide where to open, how many places to run, which age groups to take and, within the hourly cap, what to charge. Public money is substantial. Responsibility for whether a service exists at all rests with no public body.
A demand-side subsidy assumes that purchasing power will call forth supply. In childcare, the assumption fails where need is greatest. Children under two require one educator for every four children, so a provider gains little from opening a babies’ room when older children attract similar fees at lower staffing cost. Removing the activity test enlarges eligible demand without adding an educator or a room. Where supply is tight, more subsidised demand produces longer waiting lists and upward pressure on fees, part of which government then pays through the subsidy itself.
The Building Early Education Fund is the first sizeable supply-side instrument. It offers grants to providers willing to build. The government has also said it will explore owning centres and leasing them to operators. A grant program responds to applications. It does not determine where a service is required and ensure that one is built, staffed and kept open.
Every route to universal provision runs through the workforce. A centre with approved places and no educators has no places. Services keep rooms closed because they cannot meet ratios, with the shortage falling hardest on infant rooms, early and late hours, and regional services where a new educator also needs somewhere to live. The 15 per cent pay rise, paid to providers as a grant conditional on restraining fee growth, is a payment within the subsidy system rather than a wage structure. It does not create a career with pay linked to qualifications and a route from certificate to degree that a school leaver in Swan Hill could plan around.
Geography turns the workforce problem into an access problem. A service in a small town may be essential to the local labour market and still lose money every year. When it closes, the market model assumes a new entrant will arrive. In most such towns none does, and the families affected reduce their hours, rely on grandparents or leave paid work.
The children least well served are those whose development stands to gain most from stable early education. Anyone who has worked in child protection knows the pattern: families in insecure housing, affected by violence or mental illness, or moving often are the least able to navigate waiting lists, deposits and enrolment portals. Removing the activity test is a real gain for children of parents outside paid work. A subsidy entitlement means little, though, where no service has the staff to include a child with disability, or where an Aboriginal community-controlled service cannot secure stable funding.
When a community lacks places, which government must act? The Commonwealth funds families. States fund preschool on their own hours and eligibility rules, so that a Victorian four-year-old’s free kindergarten sits beside, and often inside, a long day care service funded on a different basis. Families experience one service; governments administer a set of programs but none holds the duty to provide.
A national commission is the most promising element in the government’s program, because it could give somebody responsibility for strategic service planning and workforce intelligence. But ministers have only agreed to explore the idea, with the impetus coming from child safety after the 2025 allegations of abuse in Victorian centres, when they agreed to reforms to the Australian Children’s Education and Care Quality Authority. A regulator with planning functions attached is a different institution from a steward of supply, and the government has not said which it intends.
Canada’s $10 a day policy rests on federal agreements with the provinces, now worth up to C$36.8 billion for 2026–27 to 2030–31. Its experience is a warning as much as a model: in several provinces, fees fell faster than places grew, and waiting lists lengthened. Denmark and Norway avoid that trap by fixing the parental share and placing on municipalities a legal duty to offer a place. Australia fixes a subsidy rate and leaves the duty unassigned.
What would universality require? The first requirement is to define the entitlement as a place. A child should be able to attend a service of acceptable quality, within reasonable travelling distance, for the guaranteed days, at a known parental fee. Someone then has to be responsible for meeting that entitlement.
The duty would sit most naturally with the states, which already hold it for schools and preschool. It would be backed by Commonwealth funding under an intergovernmental agreement that sets common access and fee standards. A commission would publish where shortages are emerging and report on whether each jurisdiction meets its obligation.
Funding would follow cost rather than attendance alone. The $10.4 million study of delivery costs could become the basis for paying services directly for infant places, inclusion, extended hours and operation in thin markets, with the childcare subsidy retained for the remaining parental contribution. Direct funding would carry conditions: a capped parental fee for the core days, publication of provider finances and a wage structure funded by government rather than conceded by providers. Private and community providers would operate inside a public framework.
None of this is cheap or quick. The government’s measures could form its first stage. Without an account of who holds the duty to provide, each new increase in subsidy will repeat a familiar cycle: demand rises, places fall short, fees climb and government pays again for a system it does not plan.
Tom Keating
Dr Tom Keating is a Melbourne based writer and researcher. He is a former senior executive in health and human services in Victoria and a former senior academic with appointments in various Australian and overseas universities. He played a major role in the reform of disability services in Victoria in the 1980s and 90s. His book, The Evolution of Intellectual Disability Policy and Administration in Victoria: From Care and Custody to Citizenship is forthcoming (De Gruyter Brill, 2026).