Childcare fees would cost families $30 a week through wage rise, industry warns

A 25 per cent pay rise for daycare staff would cost working families about $30 a week – but childcare operators want taxpayers to foot the bill instead.

Early childhood teacher Shannyn Block with children Sebastian Matic, 3, Jensen Harris Cumming, 17 months, and Demi Hunt, 3, in Sydney’s Surry Hills. Picture: John Feder/The Australian

Daycare fees will jump 18 per cent unless taxpayers cover the 25 per cent pay rise demanded by childcare unions, the industry has warned.

Short-staffed childcare operators want taxpayers to spend up to $2.2bn a year to directly fund wage rises through multi-employer bargaining.

As families struggle with the soaring cost of living, the Australian Childcare Alliance has calculated centres will have to increase fees by 18 per cent unless taxpayers directly fund the pay rise.

The federal government, childcare operators and unions have agreed to negotiate a sector-wide pay deal through the Fair Work Commission this year, after the government agreed to fully fund a 15 per cent pay rise for aged care workers from July 1.

The Australian understands that the government will “come to the table” on any pay rises that arise out of the application, as employers and union officials moved to ensure the early childhood sector is the first to use the multi-employer bargaining provisions.

Economic modelling for the ACA by Dandolo Partners, obtained by The Australian, shows that a 25 per cent pay rise will cost $2.2bn a year if granted to all staff, including teachers and centre directors paid above-award wages.

This would equate to an 18 per cent increase in out-of-pocket costs for families, ranging from $34 a week for a low-income single parent to $20 a week for a low-income couple both working part-time, and $33 a week for a couple working full-time on an average wage.

The ACA research shows if the wage increase is confined to childcare staff earning award wages, which now range from $830 a week for junior staff to $1500 a week for centre directors, it would add up to $1.7bn a year.

A 15 per cent pay rise, matching that granted to aged care staff this year, would cost childcare centres between $900m and $1.3bn a year – or $1600 per child.

A 5 per cent pay rise would cost between $200m and $400m.

The concerns from the childcare industry came after The Australian revealed Labor has been directed to fund only 11.5 per cent of its trumpeted 15 per cent pay rise for nurses in aged care by the government’s independent pricing adviser.

ACA president Paul Mondo said childcare operators needed to pay workers more money to tackle staff shortages made worse by the soaring cost of living.

“We need at least 10,000 more educators and early childhood teachers across the country,’’ he said on Sunday.

“The whole point of a direct wage subsidy is there is integrity in the system, in that the funding gets distributed to employees.

“We want to make sure families are not left carrying the bill.’’

Sydney early childhood teacher Shannyn Block, 29, said she would welcome a pay rise as her living costs soar.

Ms Block, who has a university degree in teaching, earns about $82,000 a year – well below the $120,000 salary for experienced teachers working in government primary schools.

“I’ve come to terms with the fact I probably won’t be able to own my own house any time soon,’’ she said on Sunday.

“I know a lot of people who love working in early childhood but end up leaving because there are other jobs they can do that aren’t as demanding, or even better.

“If we could get (government) subsidies for a pay rise, that would be amazing, otherwise families will be impacted if fees go up, and it’s already expensive enough.’’

Early childhood teacher Shannyn Block – with Sebastian Matic, Demi Hunt and Jensen Harris Cumming – knows “a lot of people who love working in early childhood but end up leaving”. Picture: John Feder/The Australian

Ms Block said she enjoyed working at the Mary Street Early Learning centre in Surry Hills because she was a “big kid at heart’’.

“I love working with young children – it’s a passion for me and it’s so much fun,’’ she said.

“I find it fulfilling to build their relationships and confidence and curiosity.’’

Mr Mondo said the government should pay for wage increases because childcare was “an essential part of the social infrastructure’’.

“Very few families can afford to survive on one income in today’s world,’’ he said.

“The benefits of children’s participation in early childhood education is really clear, and there are economic benefits to the government.’’

The ACA analysis shows that a direct subsidy paid to centres would cost the government $7.5m a year to administer, but would ensure the money goes into workers’ wallets.