Former education minister Alan Tudge has put forward a comprehensive proposal aimed at reshaping Australia’s childcare landscape, urging the Coalition to adopt measures that would increase flexibility and financial support for families. The plan, outlined in a report released through the Menzies Research Centre, calls for significant changes including tax relief for young parents, a grandparents allowance, and the expansion of in-home care services.
The report follows recent comments by Angus Taylor, the new Coalition leader, who has emphasized childcare as a priority and pledged to present an alternative to Labor’s centre-focused childcare approach. Tudge’s proposal focuses on giving parents more freedom in choosing care arrangements while easing family expenses.
Among the key recommendations is raising the tax-free threshold to $45,000 for single parents and one-earner couples with children under six. According to the report, this increase would save affected families approximately $4,020 annually, effectively acting as an “annual baby bonus” through the tax system by eliminating the lowest tax bracket for these parents.
Tudge also suggested introducing a grandparents allowance equivalent to the current fortnightly Carer Allowance of $162.60, payable to grandparents who provide at least 20 hours of childcare per week. Additionally, he calls for the deregulation of family day care and the widening of eligibility criteria for in-home care providers, which would include university students, early retirees, and family members. The report notes that the existing in-home care program is limited by a cap of 3,000 places and requires “qualified educators,” restrictions Tudge recommends relaxing.
The in-home care model, inspired by systems in France and Scandinavian countries, could allow care to be provided for children from multiple families at a single household or workplace. The report envisions workplace-based care arrangements where businesses could facilitate childcare subsidized through the Commonwealth, potentially enhancing convenience for working parents.
Tudge highlighted gaps in current childcare provision, citing that 700,000 Australians have “effectively no access to childcare,” and noted that only 1.7 percent of long day care centres operate beyond 6:30 p.m. To better target government spending, he proposes maintaining current childcare subsidies without increasing them, reinstating an activity test that guarantees subsidies only for the first 72 hours of care per fortnight, and lowering the income threshold at which subsidies phase out from the current $53,820.
The report also recommends targeted investment to encourage childcare centre establishment in regional and remote areas, describing the system’s primary challenge as a lack of choice rather than a shortage of funding. With childcare expenditures now reaching approximately $4 billion per quarter, the suggested measures aim to both improve affordability and generate cost savings.
The Coalition has previously considered options such as vouchers for nannies and home carers but moved away from that idea in favor of proposals emphasizing tax relief, income splitting, and expanded parental choice. Opposition spokesman Matt O’Sullivan has criticized Labor’s approach as a “one-size-fits-all” model, arguing for greater flexibility grounded in tax incentives.
However, the call for deregulation faces opposition from childcare advocates concerned about oversight and quality assurance. Following reports of abuse and misconduct in the sector, there are calls for stronger regulation rather than loosened standards. Jen Flemming, spokeswoman for the advocacy group Childcare Choice, echoed themes from the report, asserting that the issue is not a lack of funding but a lack of trust in parents, with the current system funneling most resources into a limited care model rather than offering real choice.
The proposals reflect an ongoing debate over how best to balance affordability, quality, and parental autonomy in Australia’s evolving childcare framework.