Wage Justice for Early Childhood Education and Care Workers (Special Account) (Extending Support and Strengthening Safety) Bill 2026

Ms BOELE (Bradfield) (12:13): This bill extends a government grant to subsidise childcare workers wages called the worker retention payment. The grant has been around since the end of 2024, and it's helped many childcare workers across the country receive a decent wage for the important work of caring for our smallest Australians while capping fees for families.

I will be supporting its extension in this bill—a $3.65 billion extension out to 30 June 2028. I also support the government's decision to attach the grant to quality and safety conditions. It's very important to note that, first of all, the worker retention payment was originally introduced as a temporary mechanism to deliver a quick wage increase and stabilise the childcare workforce.

It's not a substitute for the kind of wider, systemic reform of the childcare sector that we so desperately need. This bill doesn't answer the question that this sector has been asking the government for years: what is the actual long-term plan for reforming the childcare system? Early childhood educators do some of the most important and undervalued work in our community, and no member of this House should vote against a bill that keeps money flowing to their pay packets.

The government reports that, since the grants began, the sector has added around 20,000 more educators—an eight per cent increase in the workforce. It reports that job vacancies have fallen by almost a third and that the rate of services relying on staffing waivers has more than halved. The grant has made a difference for many educators and providers and, in turn, the children they support, but it hasn't fallen equally across the sector.

Much of the benefit has gone to larger for-profit operators who have adjusted well to the administrative requirements. When it comes to the not-for-profit and community based providers—the providers who often take on the children other services turn away, who staff above ratio and who invest properly in professional development—they have carried the heaviest burden and have been least able to benefit from the grant.

To access this payment, a provider must sign up to a fee cap from the day they apply, but the payment itself is delivered in arrears on a payment cycle that can run months behind. For a large, well-capitalised operator, that cash flow gap is manageable, but, for a small community centre operating on thin margins, it just may not be a viable business decision.

Additionally, despite their extra expenses, many of the small community centres have deliberately kept fees lower than average, but, once they signed up for the worker retention payment, they were barred from making even modest or deserved changes to their fees due to the fee cap. Many of these not-for-profit providers want to do the right thing by their staff, but they're prevented from doing so by a scheme that was designed without them in mind.

The result is that some of these providers never apply for the worker retention payment at all or can't make the settings work for their organisation. The sector broadly supports extending this payment, and I understand why. A government grant is certainly better than nothing, But broad support for an extension is not the same thing as proof that this mechanism is capable of addressing the systemic challenges facing the sector.

Workers need wage certainty and a durable wage increase, but the bill leaves them only a temporary payment—a rolling, time limited grant that the provider can choose whether to apply for. It sits on top of an award wage that the Fair Work Commission is separately working to lift, potentially, on some estimates, into alignment with this payment by 2028. But it's unclear whether the payment has helped stabilise workforce shortages in areas of need, whether childcare deserts have shrunk or whether the nonpay reasons educators leave the sector, like burnout, undervaluation or inadequate support for children with extra needs, have improved at all.

More than half of all childcare jobs still last less than one year, according to the Mitchell Institute. Turnover across the sector still runs well above the national average, according to the Front Project. Over a quarter of qualified educators are still employed casually, compared to a fifth in the general workforce, and 110 services remain stuck at lower quality ratings, disproportionately for-profit providers, small providers and providers in disadvantaged and remote communities.

We see these systemic issues playing out on the ground in Bradfield, which is one of the most expensive electorates for child care. ECEC workers often can't afford to live locally, exacerbating workforce shortages, and providers face higher locality based operating costs, including rent, insurance and wages. Families face substantial out-of-pocket costs, while daily fees frequently exceed the maximum fee covered by the childcare subsidy, creating spiralling economic disadvantages to workforce participation and reducing demands for services.

We're seeing for-profit providers exit the local market in Bradfield, as parents pull children out because of high fees. At the same time, we see in-demand, not-for-profit providers closing their doors because they can't make ends meet, despite being at capacity and with long waiting lists. If we are serious about genuinely sustainable and universal early learning systems, we need to move towards needs based, supply side funding.

Existing childcare funding through the childcare subsidy needs to flow through to parents rather than to services, and the costs need to not vary when caring for a baby versus a school-aged child or with a service in a remote community versus a capital city. Instead, we need a baseline level of funding tied to the community a provider serves, with additional loadings for regional, remote and additional needs settings.

I acknowledge that the government is doing work on this. It has commissioned Deloitte to do a comprehensive study of what safe, quality child care actually costs to deliver. So, while I vote for this bill, I ask the government to do two things.

Firstly, direct the department to ensure that low-fee, community and not-for-profit services can access the payment and are not adversely affected by the fee cap rules. Secondly, guarantee that this extension of the worker retention payment will be accompanied by a firm timeline and road map toward a needs based, supply side funding model. Another grant can buy the sector time, but what it really needs is new architecture to underpin its future.

This bill is a welcome step, but it's a stopgap, and it should not be mistaken for the finish line.