Government extends childcare wage subsidy with $3.6B
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- The Albanese government announced a $3.6 billion injection to extend its childcare wage subsidy for an additional two years.
- The extension aims to lock in a 15% pay rise for early childhood educators that was previously scheduled to expire this year.
- Funding eligibility will require childcare providers to cap fee increases and meet national quality standards from mid-2027.
The Albanese government has committed $3.6 billion to extend its childcare wage subsidy for two years to secure a 15% pay rise for early educators.
The original funding package was scheduled to expire in November ahead of the 2025 federal election.
“Only child care centres who agree to limit their fees for parents will be eligible to receive funding for this wage increase for workers,” said Prime Minister Anthony Albanese.
The United Workers Union stated that 60,000 sector workers faced wage reductions of 5% to 6% without this intervention, prompting over 20,000 educators from 1,000 centres to plan a walkout on July 15.
Following the announcement, the government confirmed that early childhood learning centres must limit fee growth to qualify for the ongoing financial support.
The legislative extension follows a multi-employer agreement designed to retain staff amid chronic nationwide workforce shortages within the early education sector.
The broader federal policy framework includes a separate $426.6 million initiative that replaces the traditional activity test to guarantee families three days of heavily subsidised care each week.