Meanwhile, centres are barred from raising parent fees by more than 4.4 percent over the next year.
The government has announced a $3.6 billion (US$2.36 billion) pay boost for early childcare workers, set to be distributed over two years from funds set aside in the budget in the May budget.
It represents an increase of 15 percent, but is still significantly less than the 25 percent that was sought.
The first 10 percent will be added to pay packets in December, followed by a further five percent increase a year later. This means early childhood workers on the average wage will receive a pay rise of $103 a week this year, rising to $155 more a week after the December 2025 increase.
To qualify for the additional pay, centres will be barred from increasing fees paid by parents by more than 4.4 percent over the next year.
Announcing the move, Education Minister Jason Clare said the pay rise would help to boost the number of workers in the industry, describing it as a “cost-of-living double whammy—wages up for workers and keeping prices down for families.”
“A pay rise for every early childhood educator is good for our workforce, good for families, and our economy.”
Productivity Commission Report Due for Release
Prime Minister Anthony Albanese, also present at the announcement, said the pay rise reflected the proper value of educators in childcare, who are predominantly women.
“What [childcare workers] do is to create better, smarter, more capable Australians, and they deserve recognition for the hard work and commitment that they put in,” he said.
“Knowing your child is safe, happy, and learning alongside their friends is priceless. Giving the next generation the best start in life is essential.
“Today, we deliver fair pay for the people who make this possible.”
He also mentioned that the Productivity Commission’s inquiry has shown that wage adjustments are necessary to maintain a stable workforce.
“The inquiry has shown that unless we do something about wages in the sector, we won’t have a workforce,” he said.
Despite falling short of what was asked for, the increase was welcomed by the president of the Australian Childcare Alliance, Paul Mondo.
“We have been working for a long time for this announcement and while there is a lot more for us to determine, this is a very positive step in the right direction,” he said.
“The only meaningful way to implement improved wages for our workforce is through government funding to ensure that families are not left out of pocket.”
Education Unions: More Funding Needed
The Australian Education Union, while welcoming the move, argued for more funding.
“Early childhood teachers and educators are also looking to the federal government for additional investment for the inclusion of entitlements that address workload,” said its Victorian branch president, Meredith Peace.
“With 11,000 more teachers and educators required in Victoria over the next decade, professional pay and good working conditions are key to attracting and retaining this growing workforce.”
But opposition shadow treasurer Angus Taylor expressed reservations, saying it needed time to “work through the specifics.”
“We want to see higher real wages for all Australians right now, and we know the primary way to achieve that is to beat inflation,” he told the ABC.
“And if we’ve got a situation with real wages going backwards—which it has been the case for Australians since Labor came to power—then we’re not getting the outcome …
“The principle of higher real wages for all Australians is one we will always support, but you can’t achieve that if prices continue to go up at the rate they have been.”
The Greens criticised the increase as insufficient, with early childhood education spokesperson Steph Hodgins-May calling for the government to meet the union’s original request for a 25 percent rise.
“This is a workforce in crisis,” she said. “For too long, educators have been underpaid and as a result are leaving the industry in droves.
“Labor must commit to going that step further and paying our educators what they’ve been calling for and what they deserve, for doing the most important work imaginable—educating and caring for our kids.”
Places Withheld Due to Workforce Shortage
According to the most recent government figures from 2021, over 216,000 staff are employed in the early childhood education and care sector, with an average age of 32.
Ninety-two percent were female, and 85 percent had an Early Childhood Education qualification, while 12 percent had a bachelor’s degree. They provided early learning services for 850,000 families across Australia.
A November 2023 report from the Australian Childcare Alliance showed that half of the 477 centres surveyed had capped enrolment numbers, withholding a total of 11,123 places from families within the week of the study due to inadequate staffing.
At the time, Mondo said families are being unfairly impacted when there are not enough workers to meet demand and regulatory requirements for child-education ratios.
“The workforce crisis will not be resolved without targeted initiatives for educator attraction and retention,” he said.
“Importantly, we need to do this without increasing the cost to working parents, who continue to struggle under the weight of the rising cost of living.”
AAP contributed to this report