Labor Pledges $3.6 Billion to Fund 15 Percent Pay Rise for Childcare Workers

The package will lift weekly pay by $255 for educators and $410 for teachers relative to December 2024 levels.

A child plays with LEGO bricks in Melbourne, Australia, on April 15, 2021. Darrian Traynor/Getty Images

The Albanese government will spend an additional $3.6 billion (US$2.5 billion) over the next two years to fund a 15 percent wage increase for early childhood educators, extending a policy it says is helping address workforce shortages and keep childcare costs under control.

According to the government, the package will lift weekly pay by $255 for educators and $410 for teachers relative to December 2024 levels, when the pay rise was first introduced.

Prime Minister Anthony Albanese, however, said only childcare centres that agree to limit fees for parents will be eligible for the new round of funding.

While the government argues the latest investment will strengthen workforce stability and improve care quality, the package comes amid ongoing concerns about inflation and budget pressures.

Following the Reserve Bank’s latest interest rate decision, Shadow Treasurer Tim Wilson accused Labor of fuelling inflation through higher spending, saying Australians are already facing increased living costs, taxes and interest rates.

“The reason the Reserve Bank cannot cut rates is because inflation is still too high, it is homegrown, and it started long before a shot was fired in Iran. Until the treasurer stops pouring debt petrol on the inflation fire, there is no path back to lower interest rates,” he said in a statement on June 16.

Workforce Gains and Fee Controls

Meanwhile, the government said the wage subsidy had helped attract and retain workers in a sector long affected by staff shortages.

“The payment has worked to bring more people into the early education workforce and to keep costs down for families,” said Education Minister Jason Clare.

Government figures showed that since the policy was introduced, the number of early childhood education and care workers has increased by about 20,000, representing an 8 percent rise.

In addition, job vacancies in the sector have fallen by almost 31 percent, while the proportion of services operating under staffing waivers has also fallen from 8.9 percent to 5.1 percent.

New Safety Conditions Linked to Funding

The government will also tighten safety requirements attached to the funding.

From July 2027, childcare services that fail to meet safety-related components of the National Quality Standard could have their funding reduced or suspended.

Currently, about 95 percent of early learning services meet the safety standard, according to government figures.

The move follows heightened scrutiny of the childcare sector after allegations emerged against former childcare worker Joshua Dale Brown, who is alleged to have abused eight children, including a five-month-old infant, between April 2022 and January 2023.

The incident prompted federal and state governments to introduce measures aimed at strengthening oversight in the sector.