Over a million families paying for childcare are a step closer to more relief after the federal government introduced its long-awaited subsidy legislation to parliament.
Education Minister Jason Clare tabled the $4.5 billion reforms, which were a key promise at the last election, on Tuesday.
It comes as cost-of-living pressures continue to bite families and after the government recruited the competition watchdog to investigate the cost of childcare, which it said had risen by 41 per cent in the last eight years.
So what exactly is the government doing and how are its changes set to impact you and your family?
Here's what you need to know.
What are the new subsidy rules?
Under the legislation, all families would have their childcare subsidy rate increased unless their total income is $530,000 or more.
That's a big deal, given the subsidy currently stops once a family hits the $356,756 mark.
The changes would see families earning up to $80,000 refunded 90 per cent of their first child's fees.
That proportion would decrease by one per cent for every extra $5,000 earned.
Depending on how much a family earns, this could equate to an increase of up to 20 per cent in some cases.
Rates for subsequent children will stay at the same levels they were raised to this year.
In addition, families earning between $356,756 and $530,000 would now attract a subsidy for their subsequent children.
Currently, they do not attract one.
What else is in the legislation?
The reforms also include a number of measures to increase transparency and accountability in the sector.
One key element is requiring all childcare providers operating 25 or more centres to report specified financial information and details on lease arrangements.
Parents will also be made to pay fees electronically, which the government said would help stop providers from earning subsidies from families that do not exist.
What's in it for First Nations families?
Part of the reforms target First Nations families after the most recent Closing the Gap report found the school-readiness of Indigenous children had gone backwards, the government said.
Just 4.3 per cent of kids in early education and care identified as Indigenous, despite making up 6.1 per cent of children aged 0-5 years, it said.
Under the reforms, First Nations families would be exempt from some of the measures that assess subsidy eligibility based on how much parents work.
It would see those families be able to access at least 36 hours of subsidised childcare per fortnight.
The government said it would also spend $10.2 million to create a care and development partnership with the states, territories, and First Nations representatives.
The partnership, aimed at developing community-led policies, will be co-chaired by First Nations peak body SNAICC — National Voice for our Children.
SNAICC CEO Catherine Liddle welcomed the new subsidy measures and said they had been long awaited.
Ms Liddle said while the reforms marked a step in the right direction, changes to a "couple of other things", including expanding the subsidy's reach to 60 hours per fortnight, would make an additional impact.
"Aboriginal and Torres Strait Islander children are more likely to be living in areas described as childcare deserts, so that means the services aren't available in the first place," she said.
"So yes, it's a good step. But do we need more hours? Yes. Do we need more services? Yes."
When will the changes kick in?
The legislation is expected to kick in at the start of July 2023.
But it will still need to clear both houses of parliament, which the government said it hopes will happen by the end of the year.
What do the changes hope to achieve?
Aside from more years of vital early learning for kids and savings for parents, it is hoped the move will allow more parents, particularly mothers, back into the workforce.
Getting more women back into work could also help address critical job vacancies, particularly in female-prevalent sectors like teaching and nursing, the government said.
"Early childhood [care] prepares children for school. It prepares them for life, and we know that when we invest in these early years, we get better outcomes later," Early Childhood Education Minister Anne Aly said.
"But [the reforms] are also about allowing primary caregivers, who are mostly women, to go back to work if they want to."
Treasury has estimated the reforms could add the equivalent of up to 37,000 extra full-time workers to the economy in 2023-24, the government said.
"This is a big and important reform," Mr Clare said.
"It's good for children. It's good for parents. And it's good for our economy."
