ACA calls for direct wage subsidies to educators “so families don’t foot the bill”

The Australian Childcare Alliance (ACA) has released a report which calls on the Federal Government to provide a direct wage subsidy to educators to avoid additional costs flowing through to families.

 

Commissioned by ACA, the Dandolo Partners report compares several options for administering a government-funded wage increase, including increasing the hourly rate cap for families accessing the Child Care Subsidy and a direct wage subsidy.

 

The report analysed the funding model options across six impact areas: 

 

• Administrative cost and burden
• Families
• ‘Leakage’ of money through the system
• Service viability
• Risk of fraud
• Workforce.

 

Overwhelmingly, the direct wage subsidy had the most positive outcomes, with no risk of out-of-pocket costs for families and better likelihood that all teachers and educators would see the benefits from a pay rise.

 

A direct wage subsidy would involve additional cost and administrative requirements to develop a new system to process payments, and new requirements for early learning service providers to manage and document the subsidy. However, the report found the alternative of increasing the hourly rate cap would not efficiently deliver a funded wage rise and would also lead to higher fees for families.

 

The early childhood education and care (ECEC) sector, ACA President Paul Mondo said, “needs a funded wage increase to attract and retain more workers in a highly competitive labour market amid a critical workforce shortage across the country.”

 

“Our educators and teachers are the heart of any centre, and it is vital they are supported at work and paid fairly. But families are also struggling under the rising cost of living pressures and cannot afford to have additional out-of-pocket costs passed on to them,” he said.

 

ACA has consistently advocated for additional government support to help attract and retain more early learning educators, as the sector faces a critical national workforce shortage.

 

“Our shared mission is to ensure that every child in Australia has the best start in life,” Mr Mondo said. 

 

“There are two key factors for quality education and care to be available for every child — a workforce that is supported and paid fairly and a viable and sustainable sector.”