Australian Greens' additional comments

Introduction

1.1The Australian Greens thank the witnesses to the Wage Justice for Early Childhood Education and Care Workers (Special Account) Bill 2024 (bill) inquiry and those who made submissions for their time and expertise.

1.2We believe early childhood education and care is an essential service that should be properly funded by the government. We welcome the long overdue recognition of the early childhood education and care workforce and the critical work they do in educating children in their early years.

1.3The Australian Greens strongly support wage increases for the early childhood education and care workforce. While the Wage Justice for Early Childhood Education and Care Workers (Special Account) Bill 2024 does not go far enough to achieve genuine wage justice for early years educators, the Australian Greens support the intent of the bill as it, nonetheless, represents a step in the right direction.

1.4During the inquiry, we heard that many witnesses had not been consulted about the bill, which made the hearing critical to ensuring all experts and advocates had the opportunity to provide feedback.

1.5In response to the evidence provided throughout the inquiry and the notable deficiencies with the bill, the Australian Greens have put forward recommendations to strengthen the bill and to ensure genuine wage justice for early childhood education and care workers.

Wage increase

1.6We believe that this bill is an important opportunity to address one of the key issues of our broken childhood education and care system—that is, the acute workforce shortages.

1.7For too long, early childhood educators have been underpaid and undervalued. They're feeling overworked and burned out, and as a result, they are changing careers, leaving centres struggling to fill thousands of educator roles.[1]

1.8Currently, the sector is facing a shortfall of qualified early childhood educator and care workers. Australia needs 21 000 more qualified early childhood education and care professionals to meet current demand and support sustainable working conditions, and will need more workers to meet future demand.[2]

1.9Australia desperately needs a sustainable workforce to be able to deliver quality early childhood education and care. Two government-commissioned reports in 2024, by the ACCC and the Productivity Commission, confirmed that our country's early childhood education system is in crisis and reform is urgently needed. This was backed up by the testimonies and evidence provided by witnesses to this inquiry. The Greens agree with the experts that investment in remuneration and improved working conditions is critical to ensuring a sustainable workforce and delivering quality early childhood education and care.

1.10This bill follows calls for a 25 percent pay rise by unions representing early childhood education workers, including the United Workers Union, the Independent Education Union and the Australian Education Union.[3] During the inquiry, we heard from many witnesses who stated that while a 15 percent pay rise was a critical step forward, it would not be sufficient to address the acute workforce shortages in the early childhood education and care sector.

1.11As Ms Elizabeth Death, Chief Executive Officer (CEO), Early Learning and Care Council of Australia (ELACCA) explained, even a 25 per cent wage increase would leave early years educators behind.

Twenty-five per cent is where we started the conversation. It is a very important point, but I think we need to not just leave it at 25 per cent; we need to make sure we maintain equity with schools. I've been in the sector for more than 40 years, and I have constantly seen that the early childhood sector is way behind in award rates over the years.[4]

1.12The call for pay parity with schools was raised by numerous witnesses, both in their testimonies and submissions. As Ms Samantha Page, CEO, Early Childhood Australia (ECA), stressed, teachers should not be treated differently:

A teacher is a teacher, whether they work in a school or work in an early childhood centre. They should be paid appropriate professional wages, and there shouldn't be a disparity between the wages paid across sectors.[5]

1.13Pay parity, we heard, is critical to addressing childcare deserts (where there are more than three children per childcare place),[6]particularly in rural, remote and regional areas. Mrs Louise Martin, President, Isolated Children's Parents Association of Australia, said this bill won't address the workforce shortages in areas already acutely understaffed:

Rural and remote settings require more than a 15 per cent wage increase to rectify staffing shortages and to meet the needs of attracting and retaining ECEC staff to rural and remote areas.[7]

1.14The Australian Greens support these views. We recognise that a 15 percent pay rise for educators is an important first step toward achieving wage justice. However, we agree with the many witnesses that a 25 percent pay increase would deliver pay parity and we support the unions' continued commitment to 'pursue their claim for a 25% wage rise in the bargaining'.[8]

1.15Ninety-seven percent of the early childhood education workforce are women.[9] Therefore, improving their pay and working conditions is critical to addressing the gender pay gap. The Australian Greens believe that to address the acute workforce shortages and ensure genuine wage justice for early childhood educators, the government should invest in increasing the wages of early childhood educators to 25 percent and improve working conditions. Addressing these key workforce issues will directly improve the quality of early years education and access for families, which will allow more parents, and in particular women, to participate in the workforce.

1.16That the Australian Government amends the bill to fully fund a 25 percent wage increase for early childhood educators.

1.17That the Australian Government invests in improving educator working conditions.

Funding uncertainty

1.18In its current form, the bill offers a worker retention payment for a limited period of two years with a provision to end on 30 June 2028.

1.19Evidence provided to the committee showed widespread uncertainty regarding the lack of ongoing funding beyond the sunset clause, as indicated by Ms Cara Nightingale, Vice President, Early Childhood, Victorian Branch, Australian Education Union:

There's a sunset clause on the funding. What does that mean for our members but also from an employer's perspective? We would like to see that funding be ongoing for the security of everyone within the sector.[10]

1.20Mr Brent Ferguson, Head of National Workplace Relations Policy, Australian Industry Group explained this sentiment was evident among both providers and educators:

There's concern and anxiety as to what will happen at the end of that period. There is also great uncertainty at the moment as to what support is going to flow in relation to any outcome from what I'll call the gender undervaluation proceedings underway at the moment in the Fair Work Commission, where there's consideration being given to whether any additional increase should be awarded under the award. At the moment we don't have certainty over exactly how and to what extent that outcome will be funded by government. People are concerned about whether the funding is only guaranteed for a period—what will happen at the end of that period?[11]

1.21Ms Elizabeth Death, CEO, ELACCA, recommended the sunset clause be removed to alleviate these concerns.

I think the removal of the sunset clause that we heard about previously is a really important element … As an early childhood person, I know that it can take many, many years to build the capacity of a service to deliver really high-quality education and care. We need that longevity of our workforce. Therefore, they need the confirmation that they will be valued and paid much longer than just two years into the future.[12]

1.22The Greens share the concerns of the early childhood education sector regarding the uncertainty created by the bill's sunset provision. We acknowledge that for providers, educators and parents, this lack of certainty of funding raises numerous questions and acts as a potential barrier to service accessing the grant. That is, in the absence of ongoing funding beyond 30 June 2028, providers may be required to pay or to pass on the costs to parents via fee hikes, or halt the pay increase altogether.

… that lack of certainty was placing us in the difficult position, potentially, if the funding was to end after two years, of either having to increase our fees to sustain the increased wage costs or—worst-case scenario, which we wouldn't want to have to do—reduce the pay rates of our educators to award levels.[13]

1.23The Australian Greens agree with the witnesses. The government's objective of boosting participation and retention in the early childhood education workforce will not be achieved through a temporary grant.

1.24We also recognise that the uncertainties created by the sunset provision will likely disincentivise early childhood education providers from signing up to the grant, which may result in educators missing out on the wage increase.

1.25The Australian Greens believe early childhood education and care providers need certainty and workers need a permanent and secure wage increase. Therefore, we call for the bill's sunset provision to be amended and for the government to commit to fully funding the educator pay rise beyond 30 June 2028 until the Fair Work Commission decision on gender undervaluation is operational.

1.26That the bill be amended to extend the wage increase beyond the sunset provision until the Fair Work Commission decision is operational.

1.27That the Australian Government commits to fully funding the Fair Work Commission decision on early childhood education wages.

1.28While there is overwhelming support for an educator wage rise, in numerous hearing submissions and testimonies, we heard about the specific challenges for some providers concerning the grant. Mr Brent Ferguson, Head of National Workplace Relations Policy, Australian Industry Group, explained that for small providers with limited resources, the administrative burden to develop the workplace instruments could serve as a barrier:

One of the difficulties I expect employers, particularly small employers, will face is the fact that they can't do this by themselves; that is my assessment, frankly. They will need to secure advice or assistance. At the moment it's fairly clear in the guidelines that funding won't cover that. If there's additional money to cover that, that might overcome that barrier. Ultimately, it's a matter for government as to whether it wishes to fund these sorts of issues.[14]

1.29An additional concern raised by witnesses at the inquiry was the absence of a formula to calculate the exact amount that providers can expect to receive from the government through the grant. Without this critical information, providers are left guessing about the level of funding they can expect to receive and, in turn, pass on to their staff. This lack of transparency and clarity, as Ms Samantha Page, CEO, ECA, explained in the inquiry, is creating uncertainty for providers:

We've also suggested that more information be provided about the amount of the grant—if not the formula for calculating the grant, then some kind of ballpark figure. Perhaps that's a process that could come before the grant application or that we reassure services they can apply for the grant and then make the decision about whether they're going to take that up or not. I think there's an absence of information that's creating more anxiety than is necessary because of that.[15]

Providers can make a commercial decision themselves about whether they can live with the fee constraint based on the value of the grant that they're going to be receiving and the impact that's going to have on stabilising their workforce. But they need that piece of information. They need to know what exactly that funding is going to cover and how much it is in order to be able to do that calculation.[16]

1.30As Ms Jennine Blundell, Executive Manager, Communities, Uniting NSW.ACT, noted without the tools to calculate the expected costs of the grant:

There are more and more questions being raised as we try to understand the grant scheme, what's included and what's not included, and how the calculation of the formula works. The lack of transparency means that we're trying to look at all of the issues that might have an impact on our organisations and the sustainability of our services.[17]

1.31The Australian Greens agree that removing these barriers for providers is critical to ensuring that they are adequately informed, resourced and equipped to make grant applications and to develop workplace instruments. Therefore, we call on the government to provide additional funding for employment‑related costs and expenses and for it to amend the guidelines to create greater transparency on grant calculations for providers.

1.32That the Australian Government allocates extra funding for administrative expenses associated with the workplace instrument.

1.33That the Australian Government increases transparency on grant calculations for providers in the grant guidelines.

Senator Steph Hodgins-May

Substitute Member

Senator for Victoria

Footnotes

[1]Nicole Gong, Shan Kou, 'Burnout and low wages: Why Tracy joined the exodus of workers quitting the early childhood sector', SBS, 8 January 2024.

[2]Jobs and Skills Australia, 'Study shows how to supercharge the early childhood sector', Media release, 3 September 2024.

[3]Cara Nightingale, 'Bargaining for wage justice in early childhood', Australian Education Union, 15July 2024.

[4]Ms Elizabeth Death, Chief Executive Officer (CEO), Early Learning and Care Council of Australia (ELACCA), Proof Committee Hansard, 23 October 2024, p. 28.

[5]Ms Samantha Page, CEO, Early Childhood Australia, Proof Committee Hansard, 23 October 2024, p.36.

[6]Associate Professor Peter Hurley, 'Childcare deserts and oases: How accessible is childcare?', Mitchell Institute, Victoria University, 22 March 2022.

[7]Mrs Louise Martin, President, Isolated Children's Parents Association of Australia, Proof Committee Hansard, 23 October 2024, p. 3.

[8]Carolyn Smith, 'Early childhood wage increase welcome and desperately needed', United Workers Union, 13 May 2024.

[9]Goodstart Early Learning, Submission 11, p. 4.

[10]Ms Cara Nightingale, Vice President, Early Childhood, Victorian Branch, Australian Education Union, Proof Committee Hansard, 23 October 2024, p. 18.

[11]Mr Brent Ferguson, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, 23 October 2024, p. 4.

[12]Ms Elizabeth Death, CEO, ELACCA, Proof Committee Hansard, 23 October 2024, p. 28.

[13]Ms Linda Carroll, Chief People Officer, G8 Education, Proof Committee Hansard, 23 October 2024, p.46.

[14]Mr Brent Ferguson, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, 23 October 2024, p. 4.

[15]Ms Samantha Page, CEO, ECA, Proof Committee Hansard, 23 October 2024, p. 32.

[16]Ms Samantha Page, CEO, ECA, Proof Committee Hansard, 23 October 2024, p. 34.

[17]Ms Jennine Blundell, Executive Manager, Communities, Uniting NSW.ACT, Proof Committee Hansard, 23 October 2024, p. 48.