Advocates have welcomed the federal government's promise to cut the "Activity Test", which will see 126,000 more children able to access early learning.

SNAICC – National Voice for our Children chief executive Catherine Liddle said the announcement by the Prime Minister would see thousands of Aboriginal and Torres Strait Islander children able to access early education and care.

"This can be a game-changer for our babies. It will mean more children developmentally ready for school, setting them up for a thriving future," she said.

"Families will be better supported by having access to wrap around services in Aboriginal community-controlled (ACCO) centres.

"SNAICC has strongly advocated for the removal of the Activity Test for many years. I am very pleased the evidence and strong voices of our sector are being heard. The activity test effectively denied many Aboriginal and Torres Strait Islander children the opportunity to access crucial early learning services."

Ms Liddle noted that Indigenous families are five times more likely to access only one day of care as a result of the activity test, and many families "disengage completely" because of the small amount of subsidised care available.

"All the evidence shows vulnerable children get the most benefits from accessing at least 60 hours of quality ECEC a fortnight. So this announcement of 100 hours of subsidised early education and care removes a significant barrier," she said.

"These reforms to early education and care also have the potential for wider impacts in the community, with recent studies showing interventions in ECEC settings with vulnerable children and their families may be the key to reducing youth crime."

The government also announced a growth fund for new centres in thin markets, marking ACCOs and NRFs as a priority for this funding. Childcare deserts or thin markets exist more acutely in regional and remote areas.

"Outside of the activity test, access to childcare places in regional and remote areas where many Aboriginal and Torres Strait islander families live is a significant factor in early learning," Ms Liddle said.

"We need to see this new growth fund support growth for our ACCOs that are best placed to deliver early learning services to our children. ACCOs are proven to get the best engagement with our families and ensure Aboriginal and Torres Strait islander children grow up strong in culture before they transition to big school.

"Closing the gap starts with our children and that starts in early education and care. If we get support right in the early year, we are setting our children up to thrive in all life stages. Ultimately, we should be aiming for bi-partisan support for this commitment and for a free universal early childhood education and care system that will build a more prosperous, equitable and sustainable future for all Australian children."

In September, SNAICC said the Productivity Commission's report on reforming early childhood systems - A path to universal early childhood education and care - would be a "game changer" if governments are bold enough to implement it. Among the recommendations from the Commission was the abolition of the activity test.

In June, SNAICC's own report called for reforms including an end to the test.

The Minderoo Foundation called the reform "a huge step" towards a universal early education and care system for Australian families.

Jay Weatherill from the Foundation's Thrive by Five campaign congratulated the government, saying the "Activity Test" – which determines eligibility for childcare based on how many hours their parents work – had always been "punitive and unfair".

"If a child turned up to their first day of primary school and was told, 'sorry, you can't get an education here because your parents don't work full time', we would be outraged. Why should this be the case for early learning?" Mr Weatherill said.

"Ninety per cent of brain growth happens in the first five years of life and it is a crucial time for a child's learning and development, so early childhood education is so much more than babysitting. It is fantastic that the government has recognised this and committed to making three days per week of early learning accessible to every child, no matter their parents' work or study situation."

The Parenthood chief executive Georgie Dent said dropping the test is "a profound win for children, equity and the nation".

"The Activity Test is one of the most significant obstacles to universal access to early childhood education and care in the country and has been particularly detrimental to First Nations families as well as children from low-income and disadvantaged households," she said.

"The Activity Test disproportionately locks out First Nations children and children from low-income and disadvantaged households, who are the most likely to benefit the most from early learning, yet are currently least likely to participate. This was a wicked problem clearly articulated by the Productivity Commission in its recent major review of the sector."

Mr Weatherill said the decision to cut the test "is a win for equity, as it will enable the children who are most likely to benefit from early learning to get access".

The Activity Test disproportionately prevents children from low-income families and First Nations children from accessing early learning. A 2023 report from Impact Economics and Policy, commissioned by Thrive by Five, found more than 126,000 children would gain access to early learning if the "Activity Test" was abolished.

MInderoo Foundation noted this could lead to almost 40,000 parents being able to return to work or increase their hours, if they want to.

"The Activity Test has particularly punished single mothers, casual workers and those looking for work. They get trapped in a cycle where you can't get childcare if you don't have a job lined up, but you can't get a job if you don't have childcare lined up," Mr Weatherill said.

He said there was more work to do to ensure the system delivers cost-relief to families and fixes "childcare deserts" – areas where there are not enough childcare places to meet the need.

"This is a momentous step and we are looking forward to hearing more from the government. We know politicians from all sides care about this issue so we hope to see any commitments matched by the Opposition. The wellbeing of children and families should be beyond politics."