Taxpayers will foot the bill for a 15 per cent wage increase for early childhood education and care workers, in major reforms announced by the prime minister.
The Albanese government will tie the wage increase to a commitment from childcare centres to limit fee increases, with hopes the changes will boost women’s workforce participation and productivity. Childcare is also one sector that has struggled to attract workers in recent years due to pay issues. The wage increase will be phased in over two years. It includes a 10 per cent increase from December 2024, and a further 5 per cent increase from December 2025.
This means a typical educator who is paid at the award rate will receive a pay rise of at least $103 per week, increasing to at least $155 per week from December 2025.
Know the news with the 7NEWS app: Download today 
The government says the investment, which will cost taxpayers $3.6 billion, recognises the role workers play in preparing children for school.
To be eligible to receive funding for the wage increase, childcare services will not be able to increase their fees by more than 4.4 per cent over the next 12 months.
Prime Minister Anthony Albanese says knowing your child is safe, happy and learning alongside their friends is priceless.
“Early educators shape lives and change lives. We can never thank them enough for what they do — but we can make sure they are properly valued and fairly paid,” Albanese said.
“Giving the next generation the best start in life is essential. Today we deliver fair pay for the people who make this possible.”
Cost of living will be a key battleground in the lead-up to the next federal election and Education Minister Jason Clare said the announcement is good for families and the economy.
“The childcare debate is over. It’s not babysitting. It’s early education and it’s critical to preparing children for school,” Clare said.
“They lift our kids up and now we are lifting their pay.
“This is the cost-of-living double whammy — wages up for workers and keeping prices down for families.
“A pay rise for every early childhood educator is good for our workforce, good for families and good our economy.”