Expanding access to high‑quality early education

The Government is committed to building a universal early childhood education and care system where every child is eligible for at least 3 days per week of subsidised early education and care and where child care is simple, affordable and accessible for every family.

The Government is investing $5 billion towards building a universal early childhood education and care system. Investments include:

• $3.6 billion to lift the wages of early educators through the Worker Retention Payment, benefitting up to 200,000 early childhood educators and teachers.
• $1 billion to establish the Building Early Education Fund to increase the supply of high‑quality early childhood education and care places across Australia, especially in priority and under‑served markets. This is expected to support 160 new or expanded early childhood education and care services in areas of need, including the outer suburbs and regional Australia, located on school sites where possible.
• $426.6 million for the new 3 Day Guarantee, which replaces the Child Care Subsidy Activity Test to ensure families are eligible for at least 3 days a week of subsidised early childhood education and care. In its first full financial year, the 3 Day Guarantee is expected to result in 100,000 families being eligible for additional hours of subsidised early childhood education and care.

Investing in schools

The 10‑year Better and Fairer Schools Agreement will see the Commonwealth increase its school funding contribution to put every public school on a path to full funding under the Schooling Resource Standard.

The Agreement ties new Commonwealth Government funding for public schools to reforms to help lift education standards across the country. This includes:

• mandating evidence‑based teaching practices including explicit teaching
• Year 1 phonics and early years of schooling numeracy checks to identify students who need additional help
• more individualised and intensive supports for students
• more mental health support in schools.

In this Budget the Government is providing $407.5 million over four years from 2025–26 (and $7.2 billion from 2029–30 to 2035–36) to jurisdictions that have signed Better and Fairer Schools Agreement (Full and Fair Funding 2025–2034) bilateral agreements. The Government is finalising agreements with other jurisdictions to put all Australian public schools on a pathway to full and fair funding.

Permanent Free TAFE

Over the next decade, nine out of ten new jobs will require post‑secondary qualifications and almost half will come through vocational education and training (VET) pathways.

The Government is delivering Free TAFE to drive better access to vocational training opportunities and to help to deliver on Australia’s skills needs. Between its commencement in January 2023 to September 2024, there were close to 600,000 Free TAFE enrolments in courses linked to priority areas across the economy.

The Government is investing to make permanent 100,000 Free TAFE places every year from 1 January 2027, subject to the passage of legislation. Ongoing Free TAFE will ease cost‑of‑living pressures for students while supporting them to train in priority sectors and obtain secure and rewarding employment.

Investing in universities, students and graduates

Reforming university funding

The Government is continuing to implement reforms in response to the Universities Accord.

It is providing an additional $2.5 billion over 11 years from 2024–25 for investments in a new higher education funding system. This will provide more Commonwealth Supported Places and extra support for disadvantaged students.

Supporting students and graduates

The Government will cut student debts by 20 per cent with effect before indexation is applied on 1 June 2025, wiping $16 billion from outstanding student loans. The Government is also making the student loan repayment system fairer.

These changes follow moves to make student loan indexation fairer and reduce the indexation applied in 2023 and 2024, which has already reduced student debt by $3 billion.

Combined, these reforms will cut around $19 billion in student debt for more than 3 million Australians.