Early childhood education and care workers are set to receive a 15 per cent pay rise over the next two years, courtesy of a federal government funding boost.
The $3.6 billion package will provide workers in the sector with a 10 per cent raise from December, followed 12 months later by a further 5 per cent.
Prime Minister Anthony Albanese said the pay rise was "justice" for their important work in educating and caring for young Australians.
"They deserve our thanks, but they also deserve decent wages and that's what this will be doing," Albanese said.
Early childhood education and care workers on the average wage will get a pay rise of $103 this year, increasing to $155 more per week in December 2025.
For staff to receive the wage boost, childcare centres must agree to cap fee increases to parents at 4.4 per cent.
"That will make a difference for families, but it's also good for our economy because what this will do is increase workforce participation — make sure that more women can return to work earlier, make sure that so many women cannot be [financially] disadvantaged by working an extra day or two," Albanese said.
"This is good for children, good for workers and good for families, as well as being good for our economy."
Opposition leaves door open to scrapping second phase
The next federal election must be held by May next year, months before the second part of the pay rise is due to come into force.
Opposition leader Peter Dutton didn't say if the Coalition would commit to extending the payment if it won the election.
"We need to consider the fiscal circumstances at the time," he said.
Opposition leader Peter Dutton has been critical of Labor's pay rise plan for childcare workers. Source: Getty / Tracey Nearmy
"It's only a short-term payment proposal, and as I understand what the government's proposed ... there's no future provision for a continuation of that payment," he told reporters on Thursday.
"The government has to explain whether or not these workers are going to get this pay ongoing, or whether they will get a pay cut after the election."
The Greens' early childhood education and care spokesperson, Senator Steph Hodgins-May, said the government should have gone further.
"Obviously, paying our educators more is a step in the right direction, but the unions have consistently been calling for a 25 per cent pay increase for our educators, and really, that's the bare minimum that they should be accepting," she told reporters on Thursday.
"They've been doing this backbreaking care work and educating our kids in those formative years under really tough circumstances, and we really need to ensure that we've got those wages in place to ensure the workforce is there to educate our kids and provide that really critical education in those formative years."
'A very positive step'
The Australian Childcare Alliance (ACA) said the wage increase was a "significant moment" for the early childhood education and care sector.
"We have been working for a long time for this announcement and while there is a lot more for us to determine, this is a very positive step in the right direction," ACA president Paul Mondo said in a statement.
"The only meaningful way to implement improved wages for our workforce is through government funding to ensure that families are not left out of pocket."
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Advocacy group The Parenthood said the "historic" wage rise was a crucial step towards a quality and universally accessible early childhood education system.
"Early childhood education is one of the lowest paid professions in the country, and the sector is currently facing severe workforce shortages," CEO Georgie Dent said in a statement on Thursday.
"Access to early learning will only improve with more educators being incentivised to stay in the profession.
"It is also momentous for gender equity as it directly addresses the chronic undervaluing of a highly feminised workforce, and bolsters a critical enabler of women's workforce participation."
With reporting by the Australian Associated Press.
