Angus Taylor’s Liberal party is considering vouchers for nannies and grandparents as part of an overhaul of childcare in Australia – a policy experts warn could threaten equity and care standards – as the Coalition sets up a clear contest with Labor before the next election.
Matt O’Sullivan, the shadow minister for “choice in childcare and early learning”, has opened the door to government-funded vouchers for nannies, au pairs or grandparents, while the party also considers a broader family tax policy that could look at income splitting, tax and superannuation incentives for families.
The measures, yet to be fully developed or costed, would bring a significant policy fight against Labor’s plans to introduce a new universal childcare model, a policy Anthony Albanese wants to be his legacy.
O’Sullivan has said Labor’s promised policy isn’t “universal” for all families.
“It’s universal in name but not universal in access. It’s universal if you believe that centre-based care is the right path for you and your children,” he said.
Taylor drew battlelines for the fight on childcare by declaring in his first address as leader: “[We’ll] expand childcare choice and give children the best start in life, not force every family into a universal system.”
The policy would be a challenge to Labor’s focus on improving centre-based childcare, which has been rocked by safety scandals, as it moves to expand access and considers models for affordable and quality universal care.
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Labor recently implemented the three-day guarantee, partially abolishing the controversial “activity test”, giving families access to three days of subsidised care, but has promised to go further. The early education minister, Jess Walsh, has said the government has “no plans” to open subsidies for nannies or grandparents.
Advocates raise concerns over vouchers
Experts and advocates have already raised concerns over the equity of a voucher system and the likelihood of rorting.
Georgie Dent, the chief executive at lobby group The Parenthood, said vouchers would raise prices, while expanding less regulated care for nannies and grandparents could risk lowering care standards.
“When children are in more lightly regulated private spaces, in homes, it is harder to safeguard quality and safety,” she said.
“The evidence globally shows that voucher systems tend to advantage families with the most flexibility and the highest income, those who have the means to top up the gap.”
Caroline Croser-Barlow, a policy expert at advocacy group The Front Project, said expanding unregulated services could “wildly increase the chances of fraud”.
Dent and Croser-Barlow agreed the current system does not offer enough flexibility, pointing to the difficulties of the existing in-home care program that provides one-on-one early childhood educators for families who can’t access other care due to shift work, geographic isolation or complex needs. There are 3,200 places available but just 30% of those are used, in part due to administrative burdens.
Where is this policy coming from?
The policy ideas are similar to tax incentives by Hungary’s rightwing government, which legislated income apportionment and lifetime tax benefits for mothers, to incentivise families having children. Women under 40 with at least two dependent children and all other women who have had three children are exempt from personal income tax.
One Liberal said considering the policies would not be part of a “rightwing” agenda, pointing to income splitting in France that benefits families with more children.
The ideas also follow One Nation’s policy for income splitting, announced in January 2025, allowing couples with children to file joint tax returns, lowering their overall tax. The policy states it would “encourage parents to look after their own children” and “encourage home schooling”.
The Parliamentary Budget Office separately costed an income splitting policy by former Liberal senator Gerard Rennick, totalling $12.4bn in forgone income tax revenue.
One expert said that tax incentives in Hungary had not led to a baby boom, and benefited higher-income families.
Australian National University professor Robert Breunig said evidence from the OECD (Organisation for Economic Co-operation and Development) suggests policies including longer paid parental leave, direct financial support for parents and support for early childhood education were better for increasing birthrates. He also suggested a targeted policy for vouchers or subsidies to support shift workers such as nurses and police officers with young children would be beneficial.
One grassroots mothers group, For Parents, has also been a key influencer, Liberals told Guardian Australia. For Parents has advocated for childcare subsidies to be expanded to nannies and grandparents, though not exclusively through vouchers, and says childcare is not “one size fits all”, a phrase frequently used by the opposition.
The group briefed Liberal MPs at a backbench committee last year, and will brief O’Sullivan in coming weeks. One MP said they had seen the influence of the group in policy development. Another MP said the group would put an “everyday face” to the policy and could have a “role to play” in advocating for it. For Parents has also briefed Labor MPs.
The new right pushing for vouchers
O’Sullivan said the ideas have been “socialised” within the party for some time but several Liberals privately said it had gone nowhere under former leaders Scott Morrison and Peter Dutton. The idea was accelerated after a series of safety breaches rocked the childcare industry in 2025.
“Angus is signalling this is a key area that he wants to take things, and a lot of these ideas that we’re exploring with vouchers, whether it’s tax deductions … they’ve all been talked about,” O’Sullivan said.
A newer and younger group of MPs from the party’s right, including O’Sullivan, Garth Hamilton, Aaron Violi and the South Australian senator Leah Blyth have been pushing internally for nannies and grandparents to be included in childcare support.
Supporters are also hopeful the deputy leader, Jane Hume, will bring back her bill allowing one spouse to top up another spouse’s super, to benefit women who have lost out on superannuation while caring for young children.
Putting childcare in focus at the 2028 election could also be central to winning over generation Z and millennial voters. Liberals believe it could win back some teal voters, as well as younger white-collar workers who have deserted the party and migrants with young children, who the party is trying to reach.
“I certainly saw it at the last election, it wasn’t just women that weren’t taking our how-to-vote cards, it was couples, it was families,” O’Sullivan said.
