By I. Hansana, Jadetimes News

Early childhood education workers are set to receive a 15% pay increase funded by the government, contingent on childcare centres capping fee increases. This wage rise, initially aligns with the Albanese government's commitment to addressing wage inequities in this vital sector.

The pay increase will be implemented over two years, starting with a 10% raise in December this year, followed by a 5% increase in December 2025. For an average worker earning the award rate, this will result in an additional $103 per week by the end of the year, increasing to $155 per week by December 2025. The funding will also extend to centres providing outside school hour care, aiming to create more spaces for working parents with primary school aged children.

To qualify for the $3.6 billion funding package, childcare centres must ensure that their fees do not rise by more than 4.4% over the next 12 months, starting from Thursday. Additionally, the entire funding must be allocated to staff pay increases. This fee increase limit was determined by combining inflation and the wage price index, with the goal of preventing unnecessary fee hikes beyond the yearly growth. The two year funding period allows the Fair Work Commission to complete its gender undervaluation priority awards review, which is anticipated to revamp the care and health sectors.

Determining the eligibility criteria was a key challenge for the government when formulating the policy. Last year, parents reported that an increase in their subsidy payments was offset by concurrent fee hikes by childcare centres. By requiring centres to limit fee increases to receive funding, the government aims to protect parents from further price shocks.

The Productivity Commission has submitted its final report on the early childhood education and care system, including fee structures, to the government, though a response date has not been announced.

Prime Minister Anthony Albanese, who prioritizes a universal childcare system, celebrated the policy as a significant achievement for childcare advocates. Treasurer Jim Chalmers emphasized that the pay increase enhances access to affordable care while boosting productivity and workforce participation.

Education Minister Jason Clare and Early Childhood Education Minister Anne Aly also commented on the announcement. Clare described the policy as a dual benefit, raising wages for workers while keeping fees stable. Aly highlighted the importance of valuing the early childhood education workforce to attract and retain staff, thereby supporting children's development and broader economic participation.

Advocates have praised the pay increase but continue to urge the government to eliminate the activity test, which restricts the number of subsidized early childhood education hours a child can receive if one parent works less than 15 hours a week. Approximately 126,000 children from low income households are believed to be excluded from early childhood education due to this test.