Australia will need to hire 16,000 new early childhood educators to address shortages and meet increased demand after the federal government pledged billions in childcare subsidies.
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Labor has announced a $4.7 billion policy to subsidise child care from July 2023, as part of its plan to improve women's participation in the workforce and ease economic pressures on households.
Treasurer Jim Chalmers called the package "cost of living relief with an economic dividend".
"This is all about mums and dads being able to work more and earn more and it's all about businesses being able to find those workers they need to," he said.
However, early childhood education centres are struggling to hire workers, and the expected rise in demand will make the situation worse.
John Cherry from Goodstart Early Learning said the country would need to employ 9000 more childcare workers, as well as fill the 7000 vacancies the sector already faced to meet surging enrolments.
"Parents are sitting on a waiting list, waiting for a spot to open up while the centre director is desperately scrambling trying to find staff so that she can take in those families," Mr Cherry told a Senate committee.
Since 2020, the number of vacancies at Goodstart has doubled and attrition rates have increased from 14 per cent to 24 per cent.
In the regions, Mr Cherry said up to 40 per cent of early childhood educators were leaving the sector.
Low pay, burnout and lack of professional recognition are the main forces driving the mass exodus.
"Lots of people are telling us they could earn more stacking shelves at Coles or Bunnings. And they absolutely can," he said.
Mr Cherry has called on the government to fund an immediate 10 per cent pay rise for early childhood workers.
He said this increase wouldn't be enough in the long term but would reduce attrition rates enough to stabilise the sector.
The wage expansion would have to be sponsored by the government because most childcare centres couldn't increase pay without raising fees, Mr Cherry said.
"We'd love to provide a pay rise to educators to match school rates, but to provide a 20 to 30 per cent pay rise would involve a fee increase of 20 per cent, which would simply make child care unaffordable to our families," he said.
Mr Cherry told the committee he had never seen the childcare industry in such dire straits and the flow-on effects would be profound.
"Every vacancy we have can affect up to 15 other families," he said.
The Australian Council of Trade Unions representative Erin Keogh revealed three in four early childhood educators plan to leave the sector in the next three years.
"The consequences of understaffing in the care sector are a snowball effect of building inequity for already disadvantaged communities: the women who work in these sectors, the women who rely on these sectors, and the clients of these sectors," Ms Keogh said.
Australian Associated Press
