Wage Justice for Early Childhood Education and Care Workers (Special Account) (Extending Support and Strengthening Safety) Bill 2026
Senator O'SULLIVAN (Western Australia—Deputy Manager of Opposition Business in the Senate) (11:25): I rise to speak on the Wage Justice for Early Childhood Education and Care Workers (Special Account) (Extending Support and Strengthening Safety) Bill 2026. I want to begin by saying that I acknowledge those wonderful early childhood educators and teachers who care for and educate Australian children every day.
They certainly do an outstanding job and important work, and I thank them very much indeed. Parents trust these educators with the people they care for more than anyone. They depend on them to keep their children safe, help them learn and give them a stable and caring environment.
A stable early childhood workforce is essential for many families. Without it, those parents cannot return to work, pick up that extra shift, study or run their businesses. So the opposition welcomes the opportunity and the certainty that this bill provides and will not oppose its package.
We recognise the importance of workforce stability and we do not want families, educators or providers facing a sudden funding cliff when the current worker retention payment expires in November. But we will be bringing forward some important amendments because, while the government has got the headline that it wanted, there are serious problems buried beneath it.
This bill provides another $3.6 billion for the worker retention payment. It extends the payment from 30 November 2026 to 30 June 2028 and extends the wage justice special account until the end of 2029. That provides certainty for the next two years, but it does not provide the long-term answer that I know many in the sector are looking for.
We've been here before. What we've got from this government is no long-term plan. When the original scheme came before the parliament in 2024, the coalition did not stand in the way of the legislation, but we warned the government that a temporary taxpayer funded payment was not a substitute for a sustainable workforce plan.
We asked what would happen when the funding ended. Two years later, the government's answer is another two years. This government does not have a plan.
It simply reacts. The worker retention payment was supposed to be a bridge while the Fair Work Commission completed its gender based undervaluation review and the government considered a longer term funding model. The Fair Work Commission has finished its work, and it's determined new classifications and minimum award rates under the children's services award, which are now in place.
The government knew from April 2025 that significant award increases were likely, and the commission handed down its final decision in December. So the government's had time to develop a sustainable plan, but instead it's come back to the parliament asking for another $3.6 billion to extend the same temporary grant program. That's not a funding model; it's another funding delay and a very expensive one.
We welcome the certainty that this extension provides today, but changing the expiry date from 2026 to 2028 does not answer the obvious question: what happens after 2028? The Front Project, which supports the bill, told the Senate inquiry that the question of long-term structural funding has not been resolved; it's simply been extended. The Y Australia warned of another funding cliff in 2028 and the risk of sudden fee increases if the support is withdrawn.
Educators also deserve to know whether the current arrangements will last. Providers need to know how they're expected to plan their businesses. Parents need to know whether these costs will eventually be passed on through increased fees that they will need to pay.
And taxpayers deserve to know what another $3.6 billion will achieve in the long run. That brings us to the broader economic problem. The government is using successive taxpayer funded grants to manage the symptoms of high inflation, rising operating costs and historically weak productivity.
It's not addressing the economic conditions that are eroding real wages, squeezing providers and driving up costs for families. Annual childcare inflation is now 7.3 per cent, more than twice the inflation rate of 3.5 per cent. Average centre based day-care fees have increased from $11.35 an hour in the June quarter of 2022 to $14.50 an hour in the March quarter of 2026.
This government is presiding over a cost-of-living problem. This is an increase of approximately 28 per cent. Almost 40 per cent of services now charge above the hourly childcare subsidy rate cap.
These figures matter around the kitchen tables of Australia. They matter to the mother deciding whether to return to work and whether their family would be better off. They matter to the father deciding whether the family can afford another day of care.
They matter to the shift workers, the small-business owners and the families already being squeezed by housing, groceries and electricity bills. The government can't keep pointing to how much taxpayer money it is spending and call that success. Families do not judge the childcare system by the size of the government's announcements; they judge it by whether or not they can find care, whether they can afford it, whether their children are safe and whether the care actually suits their family.
Another temporary grant may provide some short-term certainty, but it's not a substitute for stronger economic management or a sustainable plan beyond June 2028. There is another major problem with this bill. When the government announced the extension, it said that family day care and in-home care would finally be included, after being excluded from the original scheme.
The coalition welcomed that announcement. We thought, 'This is good; the government is taking the right step.' But family day care and in-home care are not secondary forms of child care. For some children, a smaller family day-care setting actually works best.
For families in regional and remote communities, it may be the only option that's available. For parents working shifts hours or irregular hours, or for families with complex needs, maybe with children with special needs, in-home care is essential. But headline inclusion is not the same as genuine eligibility.
Under the government's settings, services are only eligible if all educators are engaged as employees under a compliant workplace instrument. Services that use lawful independent contract arrangements are excluded. This is not a small technical problem.
Family Day Care Australia told the Senate inquiry that virtually all of Australia's approximately 8,500 family day-care educators operate as self-employed sole traders and independent contractors. So the government has announced that family day care is included while retaining a rule that locks out its predominant workforce model. For many educators, the benefit exists in the press release but not in reality.
Forcing these services to convert their entire workforce to an employee model may be commercially unviable. It would impose significant and substantial costs and undermine the flexibility that makes home-based care work. The result is a divided system.
Educators in eligible centre-based services can benefit from the Commonwealth funded wage premium while contractor educators doing equally—and I want to stress that: equally—important work in other approved settings miss out. That's not fair, and it doesn't make sense. A workforce retention program should reflect the workforce that actually exists, not the workforce model that the government prefers, not the 'one size fits all' system that this government is forcing upon Australian families.
That is why the opposition will move amendments in the Senate. That's why we're moving these amendments that will prevent eligibility for the payment being made conditional on a particular workforce instrument or industrial arrangement. They will provide a practical pathway for otherwise eligible family day care and in-home care services using lawful contractor models to access the payment.
Of course, providers must comply with workplace laws and demonstrate that the funding reaches eligible educators, but access to Commonwealth funding should not be used to pressure providers into adopting a particular industrial arrangement. The government already permits labour hire workers to receive the payment without requiring providers to prove that the labour hire agency has a compliant workplace instrument.
Instead, providers must demonstrate that the funding has been passed through to eligible workers. The government has not explained why a similar auditable pathway cannot be developed for family day care or in-home care educators. It has not explained why a similar auditable mechanism cannot be developed for family day care and in-home care educators.
This bill also allows grant agreements to include conditions linked to quality area 2 two of the national quality standard, which covers children's health and safety. The coalition supports strong and enforceable standards because the safety of children must always come first. But conditions attached to a temporary wage grant are not a substitute for comprehensive and nationally consistent child safety reform across the entire sector.
The government must explain how these conditions will work in practice and ensure that they do not produce unintended consequences for educators, providers or children. As I said in my introduction, the opposition will not oppose this bill. We have amendments that we hope can be supported, but we recognise that the certainty that this extension provides and the importance of avoiding a sudden funding cliff for educators, providers and families is important.
We will not ignore the economic problem that sits behind it. We will not pretend that extending another temporary program is a sustainable plan, and we will not accept that having family day care and in-home care included in the government's announcement but excluded by the fine print is OK. These amendments are practical.
They reflect the workforce that exists and ensures that family day care and in-home care educators are not shut out simply because they work under lawful contractor arrangements. Educators deserve certainty, providers deserve workable rules and families deserve care that is safe, affordable, accessible and flexible, and that is what the program should deliver.