Extension of early childhood worker retention payment welcome amid ongoing reform efforts

The Government has today announced it will spend $3.6 billion to extend the Early Childhood Education and Care (ECEC) Worker Retention Payment for a further two years. This means that workers in eligible childcare centres—and now in in-home care and family day care—will continue to receive a 15% pay rise while the Fair Work Commission works to implement a permanent wage increase.

Importantly, this additional funding for centres to pass on to their workers comes with a requirement to limit fee increases, ensuring that costs are not passed on to families.

When I first brought my daughter to childcare, I was a wreck. She was waking every hour overnight, and during the day, she would not sleep unless held. I was also desperate to return to work and feel like I had a functioning brain again. The educators at our centre were nothing short of miracle workers—within weeks, our 10-month-old was napping in a cot for two hours at a time, without tears. Whenever we wondered if a new behaviour was normal, the educators would share their expertise and advice—when to see a doctor, when to adjust things at home, and when to simply ride out the storm. They became a vital part of our village.

Anthony Albanese, laudably, wants universal early childhood education and care to be his legacy as Prime Minister. Universally affordable and accessible early education is urgently needed in Australia, particularly in the many childcare deserts across the country where there are more than three children for every available place. To begin addressing the historic undervaluation of ECEC workers, the Australian Government announced in August 2024 $3.6 billion to support a landmark 15% wage increase. Today, that funding has been extended for a further two years.

The payment, delivered through a grant that eligible ECEC providers must apply for, supports a wage increase of 15% above the current national award rate. To qualify for the Worker Retention Payment, providers must be approved for the Child Care Subsidy, limit fee growth, and engage workers through a compliant workplace instrument that ensures the funding flows directly to workers. These conditions are designed to protect families from higher fees while guaranteeing that workers benefit from the scheme.

More than 268,000 people work in the ECEC sector, and the vast majority (91%) are women. In 2023, the average weekly earnings for early childhood educators and carers was $816—well below the national average of $1,439, and lower than the average earnings of security guards, truck drivers or mechanics, despite comparable qualification requirements. Two-thirds of those in the sector work part-time. ECEC workers are more likely than the average Australian worker to be on fixed-term contracts, to be paid at minimum award rates, and to hold a second job to make ends meet. If we don’t want the people caring for and educating our children to be exhausted from juggling multiple jobs, it makes sense to pay them more.

Last year, there was a shortfall of around 21,000 qualified staff to meet existing demand. A further 18,000 workers are needed to meet the estimated unmet demand in services not yet established, and another 18,000 would be required to fully implement current ECEC and expanded preschool policies. Without a strong, well-paid and supported workforce, many Australian families will be unable to access quality, affordable care, and many people—women in particular—will be unable to work the hours or jobs they want.

Since the introduction of the 15% wage increase, there has been an increase of around 20,000 ECEC workers, and job vacancies in the sector have fallen by about 31%. The number of women unable to work due to a lack of childcare has also begun to decline. Importantly, the share of services operating under a staffing waiver—which allows centres to operate without meeting staff-to-child ratios or qualification standards—has dropped from 9% to 5%. These trends are critical for the safety, wellbeing, and education of our children and communities.

Of course, calling educators “miracle workers” risks understating the skill and training they bring to their work. The women (and some men) in this sector are not simply “naturally good” with children—they are trained professionals who have dedicated time and effort to developing expertise in child development and early education. Their pay should reflect this.

Paying educators what they are worth is an essential step toward a universal ECEC system. The next step is clear: ensuring that providers do not put profit before children, workers and families. With the clock ticking toward the end of the Worker Retention Payment scheme, the hope is that by 2028, we will have a credible path out of the privatised nightmare we currently find ourselves in.