The federal government has announced another A$3.6 billion to boost childcare workers’ pay.
The government says combined with other changes to the minimum wage, this will mean about $255 more per week for a typical full-time educator, compared to December 2024.
The $3.6 billion continues a 15% pay rise for early childhood educators, introduced in late 2024 but due to run out at the end of 2026. The government’s renewed commitment will see educators’ pay continue at the new, increased level over the next two years.
These new funds were not part of the May budget. But the childcare union has been pushing for a renewed commitment around pay and was planning to strike over the matter.
So this is a significant announcement for educators and the sector. But is anything missing?
What happened two years ago?
In 2024, the Albanese government announced it would fund a 15% pay rise for childcare workers over the next two years, with the condition their employers limited fee increases. This was to prevent the cost of educator pay rises being passed on to families through higher fees.
At the time, it was described as an “interim retention payment” and followed the Productivity Commission noting better wages and conditions were a key way to address staff shortages in the sector.
The commission also noted government support for wage increases could help reduce closures and enable services to redirect funds to other measures that also support quality.
It also came as the Fair Work Commission investigated the historic undervaluation of work in female-dominated industries, including early childhood education.
In December 2025, the commission made changes to the children’s services award, including a boost to the minimum pay rates. This has taken longer than initially expected and will now be done in stages between May 2026 and June 2029.
It is understood this will eventually mean services take on responsibility for paying educators at increased rates, rather than the government.
What is happening now?
As with the last payment, this funding boost is contingent on centres not raising their fees above a certain level. But there are also some changes.
Services will now also have to meet national childcare safety standards as a condition of the payment.
The payment will also apply to educators in family daycare and in-home care situations, as well as long daycare centres.
What does this mean?
This is a significant development for early childhood education and follows months of uncertainty around educator pay and how it would be funded. It’s a strong signal the federal government recognises the workforce is undervalued and underpaid.
It is also positive this will minimise educators’ needs being pitted against family budgets — which is always a risk when educator wages are only funded via parent fee increases.
And it’s important the government is now linking this funding to the national quality ratings for early education services. This acknowledges the community’s serious concerns about safety in childcare. And is another way to try and boost the quality of care and education during this crucial period of children’s development. This is on top of measures such as staff safety training and bans on educator-use of personal devices at work.
At a broader level, this funded wage increase will also help make services safer for children, and promote quality more generally. This is because it helps to keep qualified educators in the sector, can reduce educator stress and help services attract and retain educators.
All of this helps with staff-to-child ratios and continuity of educator-child relationships. Research shows these are fundamental to children’s safety and quality of education.
But what is missing?
Of course, it’s welcome the payment is being extended. But is it still kicking the can down the road?
On Wednesday, in a press conference with Prime Minister Anthony Albanese, a journalist asked: “will this be the last round of this particular payment?”
Education Minister Jason Clare responded: “We’ll look at that question as we build the early education system over the next few years”.
This means we don’t have clarity over the future.
There is a legitimate assumption services could end up footing the bill, as pay increases under new minimum wage provisions for early childhood educators roll out.
But if services are forced to limit their fee increases for the time being, this means they won’t be able to incrementally increase fees, to ease into the changes the Fair Work Commission has set out by mid-2029. So it could become a really tricky situation.
At the moment preschools (also known as kinders) are also not covered by this funding. This is a significant gap, as we know these services are crucial in preparing children for school. They are also more likely to provide higher quality care and education than long daycares.
We also know pay is of course crucial, but is not the only thing that matters to early educators. Or the only factor that keeps them in their jobs.
Research – including my own – shows workloads, community respect, and the way educators are treated by managers are continuing concerns across the sector. They are also key factors that could support long-term workforce quality and stability in early education and care.
