Strike averted after $3.6b top-up to childcare wage rises for two years

Childcare educators will keep their government-funded pay rises for another two years after Anthony Albanese stepped in to plug a looming shortfall he was warned about months ago.

But the $3.6 billion for extending the early childhood educator worker retention payment wasn’t included in last month’s Budget, despite the pay gap being flagged since last year.

Instead, it will include the money – announced just four weeks after the Budget was delivered – in the mid-year update usually handed down in December.

Without the top-up, parents faced a hefty increase in fees, as The Nightly reported in August.

The United Workers Union has now called off a strike by 200,000 childcare educators planned for mid-July.

The union has been calling on the Government for months to extend the payment, a call that was endorsed by more than 1000 childcare centres with some 20,000 educators.

USU national president Jo Schofield said workers had faced a looming pay cliff just before Christmas this year.

“Early educators have repeatedly stood up for quality early education and care, and have backed their demands with action including national walk-offs – a step they were prepared to take over this issue,” she said after the announcement.

The worker retention payment was originally intended as a stop-gap measure to give a 15 per cent pay rise to educators ahead of a Fair Work Commission ruling that the government had hoped would come into effect this year, requiring employers to boost pay rates.

But the Commission rejected the government’s request to frontload the pay increases and instead ruled they should slowly come into effect by 2029.

Childcare centres receiving the payments have to promise to limit fee increases, and must have an approved enterprise agreement in place with their staff.

Education Minister Jason Clare said centres also wouldn’t get funding if they hadn’t met minimum safety obligations.

“This is a substantial investment that we’re making here today, combined with minimum wage increases, a typical full-time educator will earn around $255 more a week than before these changes. That’s a real difference,” he said.

“What was happening was that there were massive vacancies in early learning. People were leaving the sector because they couldn’t afford to stay in the sector, even though they love the work.”

The government is working towards a universal childcare system but a key piece of work it needs to shape that, an examination of the true costs of delivering safe and high-quality care, won’t be finished until the end of this year.