Historically, the Australian Early Childhood Education & Care (ECEC) sector has had the perception of relatively low pay rates compared to other industries.
Early Childhood Educators/Teachers have often faced challenges regarding their wages and conditions. However, it's important to note that there have been ongoing efforts to address this issue.
When the current Federal Government was elected, one of their primary election promises was to increase lower-paid employment, particularly female-dominated paid employment which places the ECEC sector clearly in the crosshairs. Admittedly, while there were a lot of other sectors on their radar, the ECEC sector was already in the spotlight.
In 2018, the government announced a ten-year reform plan for the ECEC sector, which included a focus on improving pay and conditions. The plan aimed to create a more sustainable and equitable funding system, to support higher wages for Educators.
Additionally, in 2020, the Australian Government introduced the Early Childhood Education and Care Relief Package in response to the COVID-19 pandemic. This package included temporary funding measures to ensure that early learning (childcare) remained available for families, while also providing financial support to assist them in keeping the lights on, their doors open, and staff retained.
We also can't forget the Significant changes to childcare that came out of the 223/2024 Federal Budget
Striking a balance
While the ECEC sector has been calling out for more male educators, it's still a highly female-dominated, and the perception is that it’s lower paid, the Government needed to focus on their attention where they laid its promise.
With the mission set and the goals laid out, it was time to hatch a plan, but it had to be a two-pronged approach.
Brent Stokes Approved Provider Beach Kids Early Learning & Preschool and Natural Elements Early Learning Centre Eagleby says, “Increasing affordability for early learning while increasing wages is a challenge. I am so grateful for my amazing team of passionate Early Childhood Educators/Teachers who I value and respect."
Image: Beach Kids Bogangar Campus
What does a wage rise look like?
Brent believes that somewhere in the next 12 months, Early Childhood Educators /Teachers will receive a funded increase in salary significant enough to ensure our Educators can be substantially better off whilst not impacting affordability for families.
He states, “There earliest that anything might happen will be around January 2024, but a more realistic timing is July 2024. We can all hope for something sooner.”
Brent adds, “While lifting wages and recognising our valuable Educators is imperative, early learning owners understand that any increase in expenses results in higher fees for families. Service providers can’t absorb that increase in cost, and we feel in this current environment, parents can’t afford to either, so there has to be some type of delivery method that adequately rewards the Educators while not negatively impacting our families and making sure that the ECEC sector remains viable and sustainable.”
Delivery methods
There are several ways to deliver an increase in wages. The Australian Childcare Alliance (ACA) has engaged The Dandolo Partners who have worked tirelessly, modelling different mechanisms to understand the positive and negative impacts on all stakeholders.
We take a look at some of the methods discussed and the impact they will have across the multiple parties involved.
Increase in Child Care Subsidy Hourly Rate Cap
The hourly rate cap in early learning (childcare) refers to a limit set on the amount of money that can be funded per hour for early learning services.
While an increased rate cap may benefit some families, there is a high probability that others may face higher financial pressure. If providers raise their rates in line with the new cap, families who may have previously been able to afford care may find themselves facing increased costs.
If the rate cap is increased alongside wages, childcare providers will be urged to pass on the increased labour costs to families in the form of higher fees. This will result in an increased financial burden for families seeking childcare services, making it more challenging for some to afford quality care.
Increase in Child Care Subsidy
Seemingly, one of the easiest ways would be to look at the existing mechanism that's already in place and that would be to increase the Child Care Subsidy. While this may be the most obvious and simplest mechanism, Brent speaks to his deeper understanding that it is, in his words, “a very blunt instrument”.
“What I learnt during Covid times was that the Child Care Subsidy is a very blunt instrument. While some families may potentially access up to 90 per cent subsidy in July, others could see nothing. So, it seems to be an unfair tool with too many winners and losers to use. This is why it’s essential to have frank and fearless conversations with all stakeholders, including sector experts, unions, and the Government and while those discussions are often robust, they’re likely to deliver an outcome that all parties can support.”
Unfunded wage increase
An unfunded wage increase in childcare refers to a situation where wages for Educators are raised without a corresponding increase in funding or financial support for childcare programs or subsidies. This can have significant implications for families, including:
- Increased financial burden - When wages for childcare providers increase without additional funding, childcare services may have to offset the higher labour costs by increasing fees.
- Affordability challenges - Families already struggling to afford childcare will find it even more challenging with an unfunded wage increase.
- Limited availability - With an unfunded wage increase, many childcare providers who will be unable to absorb the higher labour costs and be forced to reduce their capacity or even close their doors.
- Quality impact - Unfunded wage increases can potentially impact the quality of childcare services. Providers may struggle to attract and retain qualified Educators if they cannot offer competitive wages.
- Workforce disparities - The financial strain caused by unfunded wage increases may disproportionately affect lower-income families. Affordability challenges may prevent these families from accessing high-quality early learning, exacerbating existing disparities in educational opportunities and access to early childhood and development programs.
Directly funded methodology
A directly funded wage increase provides financial support and resources specifically designated for covering higher labour costs. By directly funding the wage increase, policymakers can ensure that the burden of higher wages does not fall on families, preventing an increase in childcare fees that may create affordability challenges.
Brent Stokes believes the only appropriate way forward would be to engage a direct fund method.
He says, “If your current wages are required to be ‘x’ and they are now ‘y’, that gap would hopefully be funded by the Government and be legislated to ensure that providers pass that on to their teams. Like me, most providers are desperate to do that, while ensuring that they and the sector remains viable and sustainable.”
This approach allows childcare providers to offer competitive wages, attract and retain appropriately qualified staff, and maintain the quality of care and early learning.
There are a few things we know for sure - our Early Childhood Educators/Teachers deserve the increase for their incredible skill, families can't possibly absorb another increase in the cost of living and providers will struggle to increase wages without passing on costs. The directly funded methodology aims to ensure every party is catered for.
We’d love to know what you think!
Have something to say? Get in touch – editor@careforkids.com.au
