Financing for equity in pre-primary education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
Key financing indicators (UIS Data)
In Australia, the official entry age for pre-primary education is 3 years old based on the UNESCO Institute for Statistics (UIS) definition, while the actual age of entry into pre-primary education varies across states and territories, ranging from 3 to 5 years. Access to affordable pre-primary education of 15 hours/week (600 hours per year) is provided in the year before full-time school, though there is no legal framework mandating the education to be compulsory. Between 2013 and 2023, the net enrolment rate for pre-primary education increased consistently, starting at 88% and rising to 96%.
Governance
In Australia, the financing and administration of pre-primary education is a joint responsibility between the Commonwealth and state and territory governments. Pre-primary education in the year before full-time school is referred to as preschool, or kindergarten in some states and territories. While state and territory education departments allocate and manage preschool budgets within their jurisdictions, the Australian Government supports the provision of preschool through intergovernmental agreements, such as the Preschool Reform Agreement. This provides Australian Government funding to states and territories to support the delivery of 15 hours per week (or 600 hours per year) of affordable, quality preschool education for all children in the year before they start full-time schooling. The implementation and quality assurance of services are further overseen by the Australian Children’s Education and Care Quality Authority (ACECQA). They monitor compliance with the National Quality Framework (NQF) across jurisdictions, which gives a national approach to regulations and assessments.
Tuition-free status
One year of free pre-primary education is granted in legal frameworks.
1. Education resources to subnational governments
The Preschool Reform Agreement (PRA or Agreement) is the current national funding framework for pre-primary education in Australia, signed in August 2021 by the Australian Government and all state and territory governments.
The Agreement, in force from 2022 to 2027, sets the shared national commitment to provide at least 15 hours per week (or 600 hours per year) of quality preschool education in the year before full-time school. Federal funding is provided by the Australian Government to each jurisdiction, with payments linked to participation outcomes. According to the Agreement, 30 percent of annual Australian Government funding is base funding, while 70 percent is performance-based, contingent on meeting key targets such as enrolment of Aboriginal and Torres Strait Islander children, children experiencing disadvantage, and maintaining high attendance in 600-hour preschool programmes. This performance-linked mechanism embeds an equity dimension by rewarding jurisdictions that improve access and participation among underrepresented groups. The exact formula and weight for each student category can be found in the Agreement.
2. Education resources to institutions
Led by the Department of Education, the Australian Government provides grants through the Community Child Care Fund (CCCF) to support early childhood education and care services facing operational challenges, particularly those located in remote areas, Indigenous communities, or disadvantaged regions. The Fund aims to enhance the sustainability of early childhood institutions in vulnerable areas and to increase participation among disadvantaged and underrepresented children. By targeting communities with limited access to quality early learning, the CCCF complements the Preschool Reform Agreement by addressing supply-side inequities and strengthening service delivery in hard-to-reach locations.
While the Australian Government provides intergovernmental funds to support early childhood education, states and territories are responsible for distributing preschool funding. In New South Wales (NSW), Victoria (VIC), and Queensland (QLD), the three most populous states, funding models combine a base per-child or per-service allocation with mechanisms that adjust for attendance hours and local socio-economic conditions. NSW’s Start Strong for Community Preschools programme, Victoria’s Kindergarten Funding Model, and Queensland’s Kindy Funding Scheme each provide core subsidies determined by enrolment and service characteristics, with additional weighting for regional or community-based settings.
Across these systems, a consistent focus on equity loadings ensures that resources reach children facing greater barriers to access. Additional supports typically apply to Aboriginal and Torres Strait Islander children, those from low-income households, children with disabilities or additional learning needs, and those in remote or disadvantaged areas. While the formula and indicators vary by jurisdiction, all aim to make preschool funding more responsive to local needs and to promote equitable access to early childhood education across Australia.
3. Education resources to students and families
Administered by the Department of Education, the Child Care Subsidy (CCS) is the primary federal financial support provided to families to help cover the cost of early childhood education and care, including preschool programmes delivered in approved long day care centres. To be eligible, families must care for a child aged 13 or under and families receive a means-tested subsidy that covers between 0 and 90 percent of childcare fees, depending on household income, hours of work or study, and the type of approved service used. Although payments are made to the service provider on behalf of families, the subsidy directly reduces out-of-pocket preschool costs. The scheme embeds strong equity features, as the subsidy differs depending on the household income. The Additional Child Care Subsidy (ACCS) is also available to eligible families and can cover up to 100 % of fees for children at risk, from very low-income households, or facing financial hardship.
Families with a child enrolled in a preschool programme delivered through a Centre Based Day Care service (CBDC) may also receive fee relief funded by a state or territory government. In these cases, the CCS is applied to the full fee first, then state or territory government fee relief is applied to reduce the remaining gap fee, reducing or often removing out-of-pocket costs entirely for families. The goal of these settings is to increase participation, particularly among children from diverse backgrounds, and ensure equitable access to quality preschool education in the year before fulltime school.
Several states and territories focus on providing free or heavily subsidised access to a set number of hours of preschool each year. For example:
- the Australian Capital Territory fully covers the gap fee for up to 300 hours annually for three-year-olds in CBDC-based preschool programs, typically delivered as six hours per week across 50 weeks.
- Queensland’s Free Kindy program also provides full coverage for up to 15 hours per week for 40 weeks, totalling 600 hours annually.
- In South Australia, the Preschool Plus program launching in 2026 will subsidise the gap fee for up to 30 hours per week, 1200 hours per year, prioritising children identified as being at risk of developmental vulnerability.
Other states and territories provide annual offsets rather than hourly entitlements. This annual fee offset is applied directly to their invoices throughout the year, ensuring there are no out-of-pocket costs and no need to claim reimbursements. The offset is combined with the Australian Government subsidy, CCS, which is applied first, and the remaining balance is reduced by the offset. For example:
- In New South Wales (NSW), eligible families receive the Start Strong Fee Relief payment. This programme is led by the NSW Department of Education and provides up to AUD 4,456 per year in fee relief for children enrolled in community and mobile preschools, and AUD 2,563 for those in long day care services delivering preschool programmes. The programme specifically targets cost reduction for families with preschool-aged children, ensuring affordability and supporting higher participation across socio-economic groups.
- In Victoria (VIC), the Free Kinder initiative, led by the Victorian Department of Education, provides a varying annual offset to families with children enrolled in three and four-year-old kindergarten programmes, including Pre-Prep in participating long day care centres. This offset helps to cover the cost of between 5 to 15 funded hours, depending on the age of the child.
4. Social policies and family support programmes
The Family Tax Benefit (FTB) Parts A and B is a national income-support programme administered by the Department of Social Services (DSS). It provides fortnightly cash payments to eligible low and middle-income families to help with the general cost of raising children. FTB Part A is paid for each dependent child aged 0–19 (16-19 years who meet the requirements) and is income-tested, while FTB Part B provides an additional payment for single parents or single-income couples with a dependent child under 13. Although it is not designed exclusively as an education subsidy, the payment helps families meet education-related expenses, such as school supplies.
This profile was reviewed by the Australian Government Department of Education.
