Early childhood education workers in Australia will receive a 15% pay increase over two years, starting with a 10% raise in December 2023, funded by the government.

This initiative is part of a $3.6 billion investment aimed at addressing workforce shortages in the childcare sector and will also apply to centers providing outside school hour care.

The wage increase reflects the Albanese government's commitment to tackle wage inequity in the sector, which has struggled to attract and retain educators due to low pay.

The low wages have contributed to a shortage of childcare places, prompting the government to act to ensure better compensation for these essential workers.

To qualify for funding, childcare centers must limit fee increases to no more than 4.4% over the next year, preventing the new costs from being passed on to families.

This funding strategy is designed to ensure that the wage increase does not lead to higher childcare costs for parents, while also addressing the gender pay gap in the industry.

This announcement comes in response to previous frustrations from parents, as subsidy increases were often negated by rising childcare fees, prompting the need for fee limits.

Overall, this initiative marks a significant achievement for childcare advocates and aims to enhance access to affordable care while promoting workforce participation.

Prime Minister Anthony Albanese emphasized the importance of valuing early childhood educators, who are predominantly women, and ensuring they receive fair pay.

The pay rise follows a multi-employer bargaining process and is supported by a significant budget allocation, highlighting the government's recognition of the crucial role of early childhood educators.

In addition to the wage increase, the government is exploring the possibility of universal childcare and has tasked the Productivity Commission to investigate this initiative.

The Productivity Commission has submitted its final report on early childhood services, which is expected to be publicly released soon, potentially influencing future childcare policies.