The Albanese government will spend almost $15 billion extra to reduce the cost of childcare for families, expanding the total budget expenditure on the Child Care Subsidy (CCS) by an extra year taking it to $55.31 billion over the four years from 2023-24.
The government said the extra spending on childcare - announced a day after the Reserve Bank's pre-budget move to lift its official cash rate to 3.85 per cent - is a crucial cost of living and women's economic equality move which will benefit 1.2 million families, including 30,400 families in the ACT.
The extra $14.96 billion for the CCS for the 2026-27 financial year comes as the Treasurer Jim Chalmers has hinted, but not confirmed, that Tuesday's federal budget will increase the JobSeeker rate for workers over the age of 55.
There have been widespread calls, including from Labor ranks, to increase welfare payments, particularly JobSeeker, to get vulnerable people above the poverty line and counter cost of living pressures.
"Our budget will be carefully calibrated to ease the cost of living for families without adding to inflation," Treasurer Jim Chalmers said in a statement.
"Making childcare cheaper is one of the single most important things we can do to take pressure off working Australians in a way that won't make the job of the Reserve Bank more difficult."
The pre-budget announcement is the funding for the government's childcare changes which passed Parliament last year but is due to take effect from July. The CCS is increasing for families earning up to $530,000 a year. Families earning up to $80,000 will get an increased maximum CCS amount, from 85 per cent to 90 per cent.
"Cheaper childcare is cost-of-living relief with an economic dividend," Dr Chalmers said. "It's good for parents, good for productivity and good for posterity."
Earlier, the Treasurer admitted unemployed women over 55 were the "most vulnerable cohort" in Australian society.
"Well, you'll see on budget night what we intend to do about this but I think the work of both of these committees, that have reported to Katy Gallagher and I, have made it really quite clear that one of the troubling developments is that the growth particularly in women over 55 in our unemployment numbers, and we do think that's a problem," he told reporters.
"It is something that concerns us, particularly for women over 55 who find it harder to get back into the workforce, particularly for the long term unemployed. If you're over 55 it's harder to find a job even when unemployment nationally is a three and a half percent."
The Antipoverty Centre warned increasing JobSeeker only for people over 55 would leave 684,360 people behind.
"Rent is not cheaper for people under 55. Groceries are not cheaper for people under 55. Electricity, phone bill, fuel, clothes - none of the essentials cost us less based on age," the group said in a statement.
But Dr Chalmers said he was also concerned about the cost of living impact on younger Australians.
"We understand that particularly people on payments, doing it tough and that's why our energy bill relief is directed towards people on pensions and payments," Dr Chalmers said. "We understand that there are pressures coming from a range of sources on Australians young and old. We are cognisant of that and respond to that in the budget."
The government is also spending $72.4 million over five years on early childhood education and care sector training and skills development.
The money will allow positions to be backfilled while up to 75,000 early childhood educators, teachers and centre directors undertake professional development opportunities.
6,000 existing educators will also be eligible for financial support to help complete on-the-job teaching placements while 2,000 early childhood educators can get support for getting practical experience at a different service. There would be an extra living allowance for students in a rural or remote location.
"These measures have been shaped by our ongoing engagement with the sector," the Minister for Early Childhood Education Anne Aly said.
"Early childhood education is a wonderful career with a clear path for progression, we're making sure the workforce can access the development opportunities they need."