Staff at criticised care firm to reap millions

A childcare ­operator criticised by Labor for awarding its boss a hefty pay rise would be a winner under the party’s wages policy.

G8 Education, which raked in more than $850 million in taxpayer-subsidised revenue last year, is among a raft of publicly listed and privately held companies that will benefit from Labor’s promise to increase wages for childcare workers.

A large commercial childcare ­operator criticised by Labor for awarding its boss a hefty pay rise and bonus could attract tens of millions of dollars in government-funded pay rises for its workers under Bill Shorten’s unprecedented wages pitch.

The Gold Coast-based G8 Education, which raked in more than $850 million in taxpayer-subsidised revenue to post a $72m profit last year, is among a raft of publicly listed and privately held companies that will benefit from Labor’s promise to increase wages for childcare workers 20 per cent over eight years.

The cost — estimated at $537m over the first four years alone — would be funded by the government and not the industry, which is also set to benefit from Labor’s $4 billion boost to childcare subsidies paid to low- and middle-­income families.

Education Minister Dan Tehan yesterday hit out at the multi-billion-dollar plan as “a fast track to a socialist, if not communist, economy”.

G8 Education ­attracted the wrath of Labor’s early childhood education spokeswoman, Amanda Rishworth, in March, when she described chief executive Gary Carroll’s $905,290 salary, including a $145,000 bonus, as “unacceptable” given the sector receives about $8bn a year in government backing via the childcare subsidy: “While it is up to these companies to justify to parents and educators the pay rises they are giving to their CEOs, parents and educators have a right to be angry.”

The sharemarket-listed G8 is the largest for-profit player in the sector, operating 519 centres across Australia and in Singapore.

While it spent $50m acquiring new centres last year, its single largest cost was staff, with a government mandated 3.5 per cent staff pay rise taking its wages bill to $507.4m last year.

Under Labor’s policy, childcare workers, who can be paid as little as $22 per hour, would see their wages rise $11,300 on average in the next eight years. Based on the 7698 full-time-equivalent staff currently employed at G8, a 20 per cent rise could cost the government about $87m.

The nation’s largest not-for-profit operator, Goodstart, which brings in more than $1bn a year in revenue, last year spent $615m on wages. It employs 14,900 workers, and would likely be the biggest beneficiary of Labor’s plan. While the industry and unions welcomed the initiative, concerns have been raised about the lack of detail and potential flow-on to other low-paid professions, such as aged care.

Australian Childcare Alliance president Paul Mondo said the group, which represents long daycare centres, had been arguing parents could not afford to meet the bill for staff wage rises.

Ms Rishworth yesterday defended Labor’s policy, arguing a world-class early-education system was dependent upon proper investment in its workers.

She conceded a mechanism to ensure additional sector funding didn’t result in higher fees for families had yet to be developed.

A spokeswoman for G8 said the board had set the executive team’s remuneration package using independent expert advice and utilising market benchmarks in line with businesses of comparable size and complexity. She said the remuneration framework had been supported by shareholders.