Costly and complex: Why many childcare workers won’t get promised pay rise for Christmas

Thousands of childcare workers head into Christmas without a promised 10 per cent pay increase as only one in five providers have applied for a grant to fund the wage boost.

EXCLUSIVE

Thousands of childcare workers are heading into Christmas without Labor’s promised 10 per cent pay increase as only one in five early education providers have applied for a grant to fund the wage boost amid concerns about the cost and complexity of the process.

The federal government’s $3.6 billion investment announced in August was supposed to deliver up to 200,000 childcare workers a $100-a-week pay rise at the end of this year, but according to Department of Education data only 20 per cent of providers, covering about 40 per cent of services in Australia, have signed up to the scheme.

So far $20 million has been transferred to 1127 providers to cover the extra wages for the low-paid staff, but the bulk of workers across the nation’s 6227 childcare centres remain without the money.

Under Labor’s plan, providers apply for a grant to cover the cost of the 10 per cent pay rise this year, and a further five per cent next year, as well as at least 20 per cent of “eligible on-costs” all backdated to December this year.

To be eligible providers are required to cap annual fee increases at 4.4 per cent as of August, and then 4.2 per cent next year, though they can seek an exemption.

But small and medium centres have warned the complicated process has too many “loopholes” and fear the scheme is not sustainable long term.

Kids World Kindy director Lienna Mandic with kids at the centre.

Kids World Kindy director Lienna Mandic is among the thousands of providers yet to sign up to the grant as she is still seeking information from the department about how the funding would be calculated and what recourse for “top up” payments would exist if more staff were hired as the year went on.

“No one is begrudging a pay increase for our educators, the problem is the application process,” she said.

“I’m sorry to say but it’s a complete stuff up. I don’t understand it and I think that’s why there’s been poor take up,” she said.

Ms Mandic said officials had been deliberately “vague” about the formula used to calculate the grant.

Berry Cottage director John Owens said it would not be economically “rational” for small centres to go through the grant process due to a lack of certainty around the funding, the cost of administering the program, and the financial risk of forgoing fee increases if other expenses, like food or electricity, went up.

He said the pay rise also did not address other factors contributing to the childcare staffing crisis, such as “oppressive regulation, lack of respect and red tape”.

Coalition early childhood education spokeswoman Angie Bell. Picture: Portia Large

Education Minister Jason Clare. Picture: NewsWire/Martin Ollman

Coalition early childhood education spokeswoman Angie Bell said it was “not surprising” early childhood education providers were “unimpressed by Labor’s wage plan”.

“It has been exposed as another policy on the run which continues to raise more questions than answers,” she said.

A spokesman for Education Minister Jason Clare said some of Australia’s biggest early education employers had already applied for the grant to provide pay rises to staff, and the government was “confident that more and more will continue to sign up” to the payment, which would be backdated.

“We want all workers to benefit from this pay rise and will continue to work with all providers through this process,” he said.

Originally published as Costly and complex: Why many childcare workers won’t get promised pay rise for Christmas