Finance Minister Katy Gallagher announced that the federal government is striving toward universal early childhood education, following the recent $3.6 billion wage increase for workers in the sector.
The 15 percent wage boost will be rolled out in stages over two years, starting in December, aimed at addressing wage disparities in this predominantly female-dominated field.
On Friday, Senator Gallagher indicated that this wage increase serves as a temporary measure to enhance staff retention while the Fair Work Commission continues its review and efforts are made to integrate affordable childcare into the broader education system. “We are also doing a significant amount of work to make early childhood education universal,” Gallagher told reporters. “There’s more work to be done.”
The government has received a report from the Productivity Commission on universal childcare but has not yet made it public. The draft report suggests that expanding the sector’s workforce is crucial before other steps toward universal early childhood education can be successful.
Prime Minister Anthony Albanese described the wage increase as a “first step” toward universal childcare, noting that achieving this goal will be a gradual process. The taxpayer-funded 15 percent increase is contingent on early childhood education providers not raising fees by more than 4.4 percent in the first year of the policy. Gallagher indicated that any fee hikes beyond that would be monitored closely. “If providers did increase fees significantly, many families would likely switch to other centers,” she said.
Opposition Leader Peter Dutton criticized the wage increase as a “one-off sugar hit,” questioning the long-term impact. “The government needs to clarify whether this pay rise will continue beyond the first year or if workers will face a pay cut after the election,” Dutton said.
Gallagher dismissed concerns that the wage increase would exacerbate inflation. She responded to former Reserve Bank assistant governor Luci Ellis’s comments, which suggested that higher wages could contribute to inflation. Gallagher countered that the policy had been factored into the May budget and the Reserve Bank’s considerations. “Wages for the lowest-paid workers are not a significant driver of inflation in this economy,” she stated.
Prime Minister Albanese also downplayed inflation concerns, emphasizing that the wage increase is crucial for attracting and retaining essential workers in the sector. “We are ensuring that workers in this sector receive a fair wage so that the sector can continue to operate,” he said. “Underpaying workers would threaten the viability of the sector.”