In short: Early childhood education workers are set for a pay rise after the federal government pledged to increase wages by 15 per cent over two years.
It will be tied to a commitment from childcare centres to limit fee increases.
What's next? The government has now received a report from the Productivity Commission looking into universal childcare, which it says will be "released in due course".
The federal government has announced it will fund a 15 per cent wage increase for early childhood education workers, as part of a $3.6 billion effort to bolster a female-dominated workforce plagued by staffing shortages.
The increase will be phased in over two years, starting with a 10 per cent rise from December this year, and then a further 5 per cent from December 2025.
It would see a typical educator receive an initial pay rise of at least $103 per week, the award rate is currently $1,032.00 for a standard full-time week.
The first 10 per cent rise will lift that to $1,135 per week and $1,187 when the following 5 per cent rise is implemented.
The wage increase also applies to workers in outside school hours services, who care for school children of working parents in increasingly large numbers.
The pay bump is tied to a commitment from childcare centres to limit fee increases.
The government said that is to ensure workers can be fairly paid without the costs being passed on to families.
To be eligible to receive funding for the wage increase, centres won't be able to increase their fees by more than 4.4 per cent over the next year.
"Early educators shape lives and change lives. We can never thank them enough for what they do – but we can make sure they are properly valued and fairly paid," Prime Minister Anthony Albanese said.
"The childcare debate is over. It's not babysitting. It's early education and it's critical to preparing children for school," Education Minister Jason Clare said.
"A pay rise for every early childhood educator is good for our workforce, good for families and good our economy."
Sector facing a staffing crisis
Finer details on how the government will enforce the limit on fee increases are yet to be released, but in a sector so tight on workers ministers are betting operators who don't sign on will lose staff to those that have.
"Any centre that doesn’t sign on will lose their staff to centres around the corner that can pay their staff more," Mr Clare said.
"Through a legally enforceable agreement we’ll provide this money as a grant. And centres and providers will need to make sure they’ve got the necessary industrial instrument registered with the fair work commission to make all of that happen."
The early education workforce – made up of at least 95 per cent women – has been facing a staffing crisis, with workers routinely stretched to the limit and some centres having to close due to a lack of educators.
"This is a wonderful outcome for a highly feminised workforce that has for far too long been neglected and taken for granted," Early Childhood Education Minister Anne Aly said.
"Properly valuing the early childhood education and care workforce is crucial to attracting and retaining workers and vital to achieving the quality universal early learning sector Australian families deserve."
Last year the government spent about $5 billion increasing childcare subsidies for parents and it has now received the final report of an 18-month long Productivity Commission inquiry into universal childcare, which the government said would be released "in due course".
Historic fair work commission talks
The pay rise was negotiated at the Fair Work Commission in the first example of "pattern bargaining" where conditions can be negotiated by workers and business owners across an entire industry.
Previously industrial laws only allowed for individual enterprise bargaining.
The changes are designed to give workers at small businesses, who can lack the bargaining power of larger unionised workforces, more power at the negotiating table.
The government's legislative change was criticised by employers as a sign of the government's capture by union interests, the government dismissed such commentary as "breathless hysteria".
Childcare workers and operators sought to have the government join pay the talks due to its large role in funding the sector.
The pay increase was agreed as part of these Fair Work Commission negotiations but the government's efforts to impose a ceiling on childcare pay rises is separate to those talks.
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