The Abbott government is asking childcare providers to “do the right thing” and hand back $62.5 million given to them to improve wages in the poorly paid sector, in a move slammed by Labor as a broken election promise.
The contracts were signed with the previous government, with the money to be spent in 1100 childcare centres to bolster the $19-an-hour wages of certificate III childcare workers by $3 an hour and the pay of early-childhood teachers by $6 an hour.
Asked whether it was cruel to be asking low-paid childcare workers to return money promised to them, Assistant Minister for Education Sussan Ley said: “Of course I feel for workers who might have expected a pay rise, but who led them to expect that pay rise?”
At a media conference in Canberra on Tuesday, Labor's child care spokeswoman Kate Ellis said the government had led child care workers to expect that pay rise when it promised to honour agreements.
Ms Ellis said the government's process was ''shambolic'' and ''cruel'' to child care workers before Christmas.
Ms Ley admitted she had no legal ability to force the childcare centres to repay the money, but said she “hoped” they would do the right thing.
Labor had set aside $300 million in the budget to boost the wages of 30,000 childcare workers, an increase frozen when the Coalition came into government.
The Abbott government now wants to spend the full $300 million on professional training and development for childcare workers rather than wage rises.
The starting wage for a university-educated early childhood teacher is $42,000 a year, which would rise to about $53,000 under the wage increase.
The rise was designed to give certainty to the sector – which has suffered from high staff turnover and funding shortfalls – while the Fair Work Commission considers a push to increase wages for the social and community sector, due to be completed in about two years.
Prime Minister Tony Abbott promised in question time last week that the Coalition would “absolutely honour all of our commitments, and contracts which have been entered into will be honoured”.
On Tuesday Ms Ley said the Coalition would honour the $62.5 million in signed contracts if the childcare centres insisted on keeping the money, but she hoped the providers would give the money back to the government so it could be more fairly distributed across the sector.
One of the 16 childcare providers to have already signed contracts, Goodstart Learning, has 641 centres across Australia.
In a statement released after the announcement, Goodstart Learning said it was disappointed with the decision, saying the government needed to ''develop a longer term solution to improve the wages for low-paid educators in the early learning and care sector''.
Goodstart chief executive Julia Davison said the company ''supported the payment of professional wages'' to child-care centre staff and indicated it would consider the government's request.
Ms Ley described Labor's $300 million as a “childcare union slush fund”. On Tuesday she released a report by PriceWaterhouseCoopers that she said showed Labor's fund was “deeply flawed and inequitable”.
Ms Ley said the money, which would be paid only if employers signed enterprise bargaining agreements, was a "blatant" tactic to recruit more union members.
Labor argued the bargaining agreements were a way to ensure that workers, not management, received the money.
Ms Ley said the Coalition was keeping faith with the Australian people by keeping the same $300 million pot of money, but instead of using it for wage rises it would be put to better use in training and “upskilling” childcare workers.
“We committed before the election that we would undertake a considered measured independent review of Labor's controversial fund,” Ms Ley said.
“There was a clear rush by Labor to get these deals done for their union mates before the election and now they have left the Coalition and taxpayers to pick up the bill.”
According to Ms Ellis, the measure was designed as a two-year program to raise wages in the short term, while the fair wage push was resolved with Fair Work Australia.
''This government are not just breaking their election commitments, but now they are asking child care providers to do it for them,'' Ms Ellis said.
''This is an absolute shambles which takes the government’s chaotic processes to a whole new low.''
Ms Ellis said the government should honour its commitments or ''do its own dirty work''.
Should childcare providers return to the government the money given to them to improve wages? Join the discussion on the Essential Kids forums or leave a comment below.