The Albanese government is moving to head off a potential exodus of 60,000 childcare workers by preparing a multibillion-dollar wage package in the upcoming federal budget.
The intervention aims to prevent a projected pay cut of up to 6% for educators when a temporary 15% wage subsidy expires this November.
Without federal action, the sector faces a significant hit to its workforce, threatening the Prime Minister’s long-term goal of a universal, flat-fee childcare system.
The urgency follows a Fair Work Commission decision to stagger gender-equity pay rises until 2029, rather than front-loading them as Labor and the United Workers Union had hoped.
UWU Early Education Director Carolyn Smith warned that allowing wages to "go backwards" by over $100 a week would be devastating for a sector already struggling with retention.
Industry leader Goodstart Early Learning noted that the current subsidy has already slashed job vacancies by 20%, providing much-needed stability.
However, the proposed funding comes as Treasurer Jim Chalmers faces immense fiscal pressure.
Recent updates revealed $47.8 billion in existing program blowouts, including surging costs for the NDIS and aged care.
With the opposition, led by Angus Taylor, advocating for a more "flexible" and less expensive alternative to Labor’s universal model, childcare is set to become a primary battleground for the 2025 election.
Cabinet’s expenditure review committee is expected to finalise the package shortly to provide certainty to the highly feminised workforce.