Child care in Australia has an extensive history, with the use of child care accelerating, in particular from the 1980s onwards. This expansion was driven by and contributed to increasing levels of workforce participation by women, including mothers and an increasing number of couple families with both partners employed. Key features of the expansion include:

• substantial increases in Commonwealth funding – commencing in the 1970s but building rapidly over more recent periods along with significant changes in the forms of financial support provided
• changes in the composition of child care provision including the growth in for profit providers and outside school hours care for school‑aged children
• a stronger focus on the quality of care, and in more recent periods on the role of pre‑school education
• ongoing cost pressures with the cost of child care provision rising much more rapidly than prices overall. The impact of this on the cost to parents has been mitigated by increasing levels of assistance

The new Child Care Package introduced in July 2018 comprises:

• the replacement of existing payments with a single more generous, but more tightly income and activity tested Child Care Subsidy
• a Child Care Safety Net designed to reduce barriers to child care for disadvantaged families and communities
• enhanced information technology systems designed to simplify processes for parents and providers.

A key objective of the new Child Care Package is to boost participation in employment and employment enhancing activities.

This early monitoring report is the first formal evaluation report. In addition to presenting early data about the transition for services and families it provides context for the reform package through a review of the history of child care in Australia and a detailed overview of child care provision and the nature and objectives of the Child Care Package at the point of implementation of the package. This context will be increasingly important as the evaluation progresses as a point of reference for understanding the progress and impacts of the reforms.

This report also provides baseline data on families with children and services, their expectations of about how the new system might work, their assessment of their readiness for the changes and some very initial data on the transition including parental labour supply responses and the costs of child care for families. The timing of this report means that it is only considering the immediate post‑implementation period. It also means only limited administrative and other program data were available to the evaluation, and thus it is too early to assess the medium to long term effects.