Sector welcomes worker retention payment extension but calls for continued reform

Australia's early childhood education and care (ECEC) sector has responded with rare unity following the Federal Government's decision to extend the Worker Retention Payment (WRP) through to June 2028, describing the $3.6 billion commitment as a critical investment in educators, children and families.

While providers, unions, peak bodies and advocacy organisations have welcomed the continuation of the 15 per cent wage increase introduced in 2024, their responses also carry a consistent message: workforce investment is essential, but it is only one part of the broader reform agenda needed to build a sustainable early learning system.

Across the sector, stakeholders pointed to three key outcomes of the extension, improved workforce stability, better outcomes for children, and stronger foundations for quality and safety.

Workforce stability remains the priority

The most consistent theme emerging from the sector's response is the importance of retaining experienced educators and attracting new staff into the profession.

G8 Education Managing Director and Chief Executive Officer Pejman Okhovat described the extension as "a welcome relief" for families, educators and providers, noting that more than 7,000 G8 employees will continue to benefit from the payment.

"The extended funding is a welcome relief for families, our dedicated team, and the sector, as it will help the sector retain experienced educators who are integral to providing high-quality and safe learning environments for children around the country," he said.

The Australian Childcare Alliance (ACA), which represents more than 3,000 independent providers, echoed those sentiments.

ACA President Paul Mondo said supporting educator wages remained essential to addressing workforce shortages and maintaining stability across the sector.

"This is an important investment in the early learning workforce, and a positive step toward recognising the critical role educators play in the lives of children and families across Australia," Mr Mondo said.

Independent Education Union NSW/ACT Branch Secretary Carol Matthews said the extension would prevent educators from effectively facing a pay cut when the original funding period ended.

"They are no longer facing a pay cut later this year that would have seen many leave the sector," Ms Matthews said.

The union noted that the payment now supports approximately 200,000 workers across more than 10,000 services nationally.

Stable educators mean better outcomes for children

While workforce challenges featured prominently, organisations consistently linked educator retention to children's learning, development and wellbeing.

Goodstart Early Learning CEO Dr Ros Baxter said children are ultimately the greatest beneficiaries of workforce investment.

"Children are the biggest winners from the subsidy as keeping our highly trained educators ensures that they can build stable relationships with the children they care for, that relationship is the foundation of all high-quality early learning," Dr Baxter said.

Dr Baxter noted that educator vacancies across the sector have fallen significantly since the subsidy was introduced and said Goodstart had reduced its reliance on agency and casual staff as a result.

The Front Project also highlighted the connection between workforce stability and quality outcomes, drawing on findings from its Staying Power report.

Chief Executive Officer Dr Caroline Croser-Barlow said high staff turnover disrupts the continuity of relationships children need and can undermine quality outcomes.

"The most influential factor in a child's learning and development in their early years is when they experience warm, reciprocal relationships with the adults around them," Dr Croser-Barlow said.

Recognition for a historically undervalued workforce

Several organisations described the extension as an important acknowledgement of the value of early childhood educators and teachers.

Uniting NSW.ACT Head of Early Learning Nadia Petrovski said the decision recognised the central role educators play in children's lives.

"A strong, fairly paid workforce is foundational to quality early learning and our educators are the heart and soul of our sector," she said.

The Independent Education Union and Goodstart also highlighted the significance of the decision for a workforce that remains overwhelmingly female.

Dr Baxter noted that women make up around 96 per cent of the ECEC workforce, while Ms Matthews described the extension as an important step towards addressing gender-based pay inequity.

The comments come as the Fair Work Commission continues to implement outcomes arising from its gender-based undervaluation review, which found early childhood educators have historically been underpaid relative to the value and complexity of their work.

Strong support for linking funding to quality

The Government's decision to link Worker Retention Payment eligibility to Quality Area 2 of the National Quality Standard from July 2027 also received broad support.

Services that do not achieve at least a Meeting NQS rating in Children's Health and Safety may face reductions or suspension of funding under the new arrangements.

The Front Project welcomed the move, describing it as a practical example of connecting public investment with quality outcomes.

"When the government says: you will be funded to pay your workforce fairly, and in return your service must be safe and excellent, we connect investment with standards and outcomes," Dr Croser-Barlow said.

The Independent Education Union similarly supported the decision, arguing that child safety must remain central to future reforms.

Goodstart also pointed to reductions in staffing waivers since the subsidy commenced, suggesting workforce stability and quality outcomes are closely connected.

Continued reform needed

Despite widespread support for the extension, stakeholders were clear that additional reforms remain necessary.

Uniting NSW.ACT highlighted the need to address barriers that continue to prevent some children from accessing early learning, including disability, language barriers, transport challenges and family violence.

SNAICC welcomed the extension's benefits for Aboriginal Community Controlled early learning services, particularly in regional and remote communities where workforce shortages remain acute.

Chief Executive Officer Catherine Liddle said the payment had already helped ACCO-operated services retain valued educators and strengthen outcomes for Aboriginal and Torres Strait Islander children.

Meanwhile, the ACA cautioned that fee caps associated with the funding must remain sustainable for providers operating in increasingly challenging financial environments.

"It is critical that fee restraints are sustainable and support the maintenance of service viability at a time when the sector is experiencing significant vulnerability," Mr Mondo said.

A rare point of agreement

At a time when policy debates within the ECEC sector often generate differing views, the response to the Worker Retention Payment extension has been notable for its consistency.

Providers, unions, peak bodies, advocacy organisations and community-controlled services have all welcomed the continuation of wage support as a necessary investment in the workforce.

Their collective message is clear: fair pay, quality early learning and workforce sustainability are inseparable. The extension provides important certainty for the next two years, but stakeholders agree the work of building a truly universal, high-quality and sustainable early learning system is far from complete.