18 Our environment and context Introduction of the Child Care Subsidy The Australian Government’s new Child Care Subsidy (CCS) for long day care services took effect from 2 July 2018. The CCS replaces both the Child Care Benefit and Child Care Rebate, and is a means tested subsidy that applies to a set number of hours based on an ‘activity test’, calculated based on an assumed maximum hourly fee rather than the actual fee. Many aspects of the CCS have been welcomed by SDN, however we remain concerned that low income families, particularly single parents and those in casual or infrequent employment, will not have enough hours of what is being classified as ‘activity’ (including work, volunteering, and study) to qualify for sufficient subsidy. We also believe that the existing hourly fee does not reflect the cost pressures of operating in metropolitan markets such as Sydney. The activity test in particular reflects the current Australian Government’s view that long day care is simply child care, which in turn is about facilitating workforce participation, particularly for women. The reality is that the National Quality Framework now requires qualified teachers and in NSW, 78% of the providers of preschool programs are in a long day care setting. The introduction of the CCS required significant administrative and systems changes for providers as well as the Government, and there continues to be refinement to IT systems. SDN expects that the full impact of the CCS on families and services will become clearer in 2019. NSW Government increases funding for community preschools In June the NSW Government budget announced an extension of subsidies currently given to community preschools for enrolled four year olds to include enrolled three year olds from 1 January 2019. Community preschools are for 3–5 year olds only, and they usually close for school holidays. SDN welcomes this extension, and our pre-schools at SDN Batemans Bay and SDN Crookwell will now be able to offer three year olds a subsidised fee from 2019.