Big wins for Aussie families: What the 2025 federal budget means for childcare
Julia Smith
Julia Smith
If you're a parent to little ones, chances are you’re really feeling the cost-of-living pressures, especially regarding childcare costs.
Between balancing work, parenting, and rising living expenses, it can often feel like something’s got to give. But in welcome news, the Australian Government’s 2025 Federal Budget is bringing in some game-changing support for families, and childcare is a huge part of that.
A guaranteed three days of childcare – no strings attached
Starting January 2026, families across Australia will be entitled to at least three days (or 72 hours per fortnight) of subsidised early childhood education and care, regardless of their work or study hours.
The (much-debated) activity test that previously limited childcare subsidies based on the number of hours parents worked is getting a major overhaul.
This means heaps more flexibility for families working part-time, studying, job-hunting, or even just trying to catch their breath in the early years of parenthood.
For example, a family earning around $90,000 with one full-time and one part-time working parent could see their subsidised care increase from 18 to 36 hours per week – saving around $230 a week or over $11,000 a year (or even more if your daycare charges like mine does!) That’s actually serious relief for the household budget.
Much of the media has criticised how modest this budget is, however, that additional time and money for families with kids in care could be an enormous game-changer.
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Why this matters
Childcare isn’t just about somewhere safe for your kids while you’re at work — it’s about giving children a strong start and allowing parents, especially mums, to stay connected to their careers if they choose to.
These changes open up real options for families: maybe it’s taking on more hours at work, getting back into study, or simply having time to rest and reset. All of these contribute to a healthier, more balanced family life.
Supporting Indigenous families more equitably
Another positive move in the budget is the increase in subsidised care hours for Aboriginal and Torres Strait Islander children. These families will now receive 100 hours of subsidised care per fortnight, no matter the parents’ activity levels.
It’s an important step toward better access and equity in early education.
Other family-friendly budget boosts
While the childcare news is a standout, the budget includes other changes that will help ease the pressure for families:
Tax cuts
From July 2026, there will be cuts to the tax rate for low- to middle-income earners, meaning these families will see more money back in their pockets. It might not look like a huge amount on paper, but every bit helps when raising little humans, especially if your little humans eat as much cheese as mine do (that stuff is expensive)!
Energy bill relief
Expect two $75 rebates to appear on your electricity bills this year, to help offset rising utility costs.
Cheaper medicines
From 2026, the cost of prescriptions under the PBS will drop, making essential medications more affordable for your family.
More bulk billing
From 1 November 2025, bulk billing incentives will expand to include all Medicare-eligible patients. Practices that bulk bill every eligible patient will also receive extra government support. That means more GP visits will be fully covered – less out-of-pocket stress when your little one comes down with something.
Extra Urgent Care Clinics
An additional 50 Medicare Urgent Care Clinics will open, offering bulk-billed, walk-in care for non-life-threatening issues.
With extended hours, seven-day access, and no appointment needed, these are a great alternative to the emergency room for those sudden fevers, cuts, or weekend mishaps. We’re big fans of the Urgent Care Clinics here at Kiindred!
So, what does this all mean for you?
In short, the 2025 Federal Budget promises some real relief for families with small children. With better access to subsidised childcare, reduced cost-of-living pressures through tax cuts and energy rebates, and targeted support for those who need it most, the changes could make a genuine difference in day-to-day family life for lots of Aussie families.
Of course, how it plays out in reality will vary for each family, but for many, it means more choices, less financial stress, and more time to focus on what really matters: raising happy, healthy little humans (and feeding their daily cheese stick habits).
Sources:
Budget 2025-26, Building Australia’s Future, March 2025
Budget 2025-26, Education, March 2025
Australian Government Department of Social Services, Budget 2025–26, March 2025
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Julia Smith
Follow +Julia is a Sydney born-and-raised mum of three girls. With over twenty years in the media industry, including four years with parenting publishers, she’s passionate about creating entertaining content that connects with parents. When she’s not working or parenting, you’ll find her binge watching TV and revenge-procrastinating about bedtime… or nerding out at gigs...