Workers pocket a pay rise as childcare centres lock in fee hikes

Childcare centres have locked in 12-month price rises that will negate the federal government’s bid to cap daycare fees in return for higher staff wages.

Anthony Albanese greets children at the Styles Street Children’s Community Long Day Care Centre in Leichhardt in Sydney’s inner west, after announcing a 15 per cent pay rise for childcare workers. Picture: NewsWire / John Appleyard

Childcare centres have locked in 12-month price rises that will negate the federal government’s bid to cap daycare fees in return for higher staff wages.

More than 200,000 childcare workers are eligible for a 15 per cent pay rise that will cost taxpayers $3.6bn over the next two years.

In return, childcare operators must guarantee that they will not increase their fees more than 4.4 per cent over the next 12 months. The government’s pay rise deal comes barely a month after many childcare centres announced fee hikes for 2024-25.

Goodstart Early Learning – a not-for-profit operator of the nation’s biggest childcare chain of 654 centres – increased its fees by 5.8 per cent on July 1.

Its chief executive, Dr Ros Baxter, said Goodstart already paid its staff above-award wages, and directed its fee increases to improved pay and conditions.

“We could not ask families to pay the steep increase in fees which would have been required to provide a pay rise of this magnitude,’’ she said.

“With the investment in wage increases announced today, we are confident we can work with the government to operate within a fee cap.’’

G8 Education – the biggest for-profit chain of 430 centres, where fees usually rise twice a year – increased its fees by 4.5 per cent in January but refused to disclose the extent of any July fee increase.

G8 Education chief executive Pejman Okhovat, who is paid $3m a year, welcomed the pay rise for his company’s 10,000 staff.

He said G8 was “committed to providing high-quality early learning for Australian children and families, and we will continue to work with the federal government and those in the sector to address workforce challenges, access and affordability’.’

A spokesman for federal Education Minister Jason Clare confirmed that the fee cap would not be backdated – meaning parents will still have to pay the higher fee increases for the next 11 months. Nationally, childcare fees rose 8.4 per cent in the 12 months to March this year.

Childcare unions and employers hailed the federal government’s decision to fund a 10 per cent pay rise for childcare workers in December this year, with another 5 per cent pay rise in December 2025.

Karen Moran, who works as an educator at Goodstart Caloundra, said the average $103 per week pay rise in December “will change people’s lives’’.

“It means that early childhood educators who’ve been relying on Foodbank to feed their own families won’t have to do that anymore,’’ she said.

“And those who work two and three jobs just to make ends meet will be able to spend more time with their families.’’

The Australian Childcare Alliance, representing centre operators, welcomed the taxpayer-funded pay rise as “a very positive step in the right direction’’.

“The only meaningful way to implement improved wages for our workforce is through government funding to ensure families are not left out of pocket,’’ the ­alliance said.

“We await further detail as to how the fee restraint mechanism will work in practice.’’

Announcing the pay rise as a “cost-of-living win’’, Mr Clare said on Thursday that centres would be given grants to cover the pay rise only if they signed a legally enforceable agreement with the federal Education Department “that they won’t increase fees by more than 4.4 per cent’’.

“That’s important because we want to pay workers more but we also want to keep prices down for families,’’ he said.

“Centres or providers will (also) need an industrial agreement registered with the Fair Work Commission to make sure the money goes to the workers.’’

Mr Clare said the pay rise should ease staff shortages in early childhood education.

“People who’ve left the job to go and work at the supermarket will think, ‘I can go back to doing the job I love’,’’ he said.