The $1.6 billion policy was passed late on Thursday night after extensive trade offs with crossbenchers to amend the government’s controversial savings bill. The government’s savings measures, which included a two year freeze on the family tax benefit, passed on Wednesday.

YMCA Ballarat chief executive officer Kate Phillips said the government’s increased childcare rebate, from a 50 per cent flat rate to up to 85 per cent, would come at the expense of low income families. The changes will halve subsidised childcare from 24 to 12 hours a week. 

“Childcare is absolutely critical to disrupt intergenerational advantage.

“I do acknowledge that a lot of families will be able to access greater assistance, which is fantastic, but it does leave the most vulnerable behind so what we’ll probably see is more of the lower socioeconomic areas using childcare even less.”

Community Child Care chair Dr Anne Kennedy said reforms put workforce participation ahead of a child’s right to access early learning. The reforms will tie parents’ employment to childcare access through an “activity test" which would require them to complete four hours of job seeking a week. 

“Australia has gone backwards here, we’ve been unique in our commitment to providing access for all families regardless of income, regardless of need. This legislation erodes that.”

Education Minister said in a statement the reforms were designed “with regional and rural childcare in mind”, tackle childcare costs and encourage parents to join the workforce. Prime Minister Malcolm Turnbull said the package would assist one million Australian families. 

Ballarat MP Catherine King said the government’s trade off to freezw the family tax benefit would leave 1.5 million Australians worse off, including 11,500 Ballarat families who relied on family tax benefit A.