The Australian government, led by Prime Minister Anthony Albanese, has commissioned Deloitte to design a universal childcare system, marking the beginning of a two-year study focused on assessing demand and costs.

Albanese has articulated a vision for affordable universal childcare, while recognizing the necessity for a phased implementation approach.

A recent report from the Centre for Policy Development has called for Labor to commit to a comprehensive 10-year plan for universal childcare, highlighting the long-term advantages of quality early education.

Deloitte's analysis will encompass various factors, including service demands, childcare wages, property costs, and insights from operators, lobby groups, and families, which will inform the pathway to universal childcare.

Currently, the federal budget for the childcare subsidy is projected to reach $16.2 billion in the current financial year, with expectations to rise to $18.4 billion by 2028-29, reflecting a growth rate of about 5.5%.

Federal Treasurer Jim Chalmers has indicated that the overall cost of implementing a universal childcare system will depend on the chosen strategy, emphasizing the importance of affordability amid budget constraints.

The Productivity Commission has suggested that a flat-fee childcare model could potentially increase work hours among single parents and secondary earners with young children by nearly 3%, translating to about 17,000 full-time workers.

Previous recommendations from the Productivity Commission estimate that a flat-fee model would incur an annual cost of $8.3 billion, while a plan for free childcare for eligible families would cost approximately $4.7 billion annually.

The Early Education Service Delivery Prices Project, which commenced in June 2025, is expected to yield findings by early 2027, possibly leading to a $10 flat fee for childcare services, similar to a model implemented in Canada.

In February 2025, parliament passed reforms guaranteeing parents a minimum of three days of subsidized childcare, effective January 2026, for families earning up to around $530,000.

The government plans to reallocate billions from the existing childcare subsidy and may introduce a daily flat fee for families, with $10.4 million allocated for research ahead of the next federal election.

Enrollment in early childhood education has surged by 50% since 2013, with nearly half of one-year-olds and 90% of four-year-olds now participating in childcare.