ACA calls on Government to provide direct wage subsidies to early learning educators so families do not foot the bill

As reported in The Australian (dated 25 June 2023 (see copy)) and The Sector, the Australian Childcare Alliance (ACA) announced that it has released a report that reveals the best way to increase wages for childcare workers is a direct wage subsidy from the Federal Government, to avoid costs flowing through to New South Wales families already struggling under cost-of-living pressures.

The report by Dandolo Partners, commissioned by the ACA, compared several options for administering a government-funded wage increase: increasing the hourly rate cap for families accessing the Child Care Subsidy and a direct wage subsidy.

The report analysed the funding model options across six impact areas: Administrative cost and burden; Families; ‘Leakage’ of money through the system; Service viability; Risk of fraud; and Workforce.

Overwhelmingly, the direct wage subsidy had the most positive outcomes, with no risk of out-of-pocket costs for families and better likelihood that all teachers and educators see benefit from a pay rise.

A direct wage subsidy involves additional cost and administrative requirements to develop a new system to process payments, and on early learning service providers to manage and document the subsidy. However, the report found increasing the hourly rate cap would not efficiently deliver a funded wage rise and would also lead to higher fees for families.

ACA President Paul Mondo said that the Early Childhood Education and Care (ECEC) sector needs a funded wage increase to attract and retain more workers in a highly competitive labour market amid a critical workforce shortage across the country.

“Our educators and teachers are the heart of any centre, and it is vital they are supported at work and paid fairly. But our families are also struggling under the rising cost of living pressures and cannot afford to additional out-of-pocket costs passed on to them,” he said.

As the peak body for early learning (childcare) services, whose educators care for more than 850,000 families across Australia, ACA has consistently advocated for additional government support to help attract and retain more early learning educators, as the sector faces a critical national workforce shortage.

“Our shared mission is to ensure that that every child in Australia has the best start in life. There are two key factors for quality education and care to be available for every child — a workforce that is supported and paid fairly and a viable and sustainable sector,” Mr Mondo said.

ACA supports the first ever application for a supported bargaining authorisation which was lodged on 6 June and will enable a group of ACA members, the United Workers Union and Federal Government to work together in negotiations for improving wages for the Early Childhood Education and Care (ECEC) sector.

SOURCE: ACA NATIONAL COMMITTEE

PUBLISHED: 26 JUNE 2023