Goodstart childcare staff to receive 15% pay rise for just 10 months

Educators at Australia’s largest childcare operator will receive a pay rise for just 10 months before their salaries reduce again as a result of the axing of further payments from a federal government scheme.

Goodstart Early Learning – which employs 13,000 staff – has confirmed it will refuse the Abbott government’s request to hand back $60m it is entitled to under an early years quality fund contract signed just before the election.

The decision has angered the assistant education minister, Sussan Ley, who argued a “dark cloud” was hanging over the creation and administration of the Labor initiative to lift childcare sector wages. Ley said the scheme was creating a “clear pay-divide through the childcare industry” with only a select few entitled to the wage increase.

A Goodstart spokeswoman said workers would receive an increase of 15%, or between $3 and $6 an hour depending on their qualifications, before reverting to normal rates in the enterprise agreement after 10 months. The wage increase separate from the government fund was 3.8%.

The former Labor government created a $300m early years quality fund to lift childcare sector wages but on 10 December Ley announced plans to redirect the majority of the money to professional development. Ley said the government would not proceed with conditional funding offers that were yet to be contracted and would ask operators that had already signed contracts with the government to “do the right thing” and hand back the money.

The chief executive of Goodstart, Julia Davison, said the operator had decided to decline the request to hand back the $60m “after careful consideration”.

“While professional development is important, so too is the payment of fair, professional wages to educators,” Davison said.

“The Goodstart board has decided that this money should be allocated for the original purpose of supporting professional wage rates for Goodstart’s educators.”

Davison expressed disappointment the government would not be honouring the Goodstart early years quality fund contract “in full”. Goodstart’s spokeswoman said the total agreement was worth $132m in three instalments, but only the first $60m instalment was contracted to be paid.

She said the funding would support about 10 months of early years quality fund wage subsidy payments for eligible educators instead of the originally promised 22 months.

Ley said the government remained committed to honouring contracted funds if that was Goodstart’s final decision.

“I must admit I am surprised, and disappointed, by Goodstart’s announcement, particularly given the dark cloud currently hanging over the creation and administration of this Labor fund,” the assistant minister said.

“It’s also disappointing they’ve declined to join us in delivering lasting long-term improvements to the sector by sharing this funding fairly and equitably amongst all long-day care educators, instead of a select few.

“Unfortunately, this just confirms all that Labor’s achieved with this fund is boosting union membership and driving a clear pay divide through the childcare industry.”

PricewaterhouseCoopers Australia – which was asked by the Abbott government to review the fund – found that only a small proportion of the sector was to have access to subsidised wages and the funding was due to expire in 2015. The review said the requirement for services to have an enterprise agreement to access the fund was used by the United Voice union to increase its membership.

The review also found problems with the former government’s establishment of an advisory board to provide advice on implementation, noting criticism that it included representatives from large service providers – including Goodstart – that were also potential recipients of the fund.

But the report said no evidence had been presented in the review that indicated the two large providers on the board benefited in any additional way from having representation on the board “and no adverse finding is made in this report”.

The Liberal MP Alex Hawke has written to the auditor general seeking an audit of the fund, including perceptions of conflicts of interest.

Ley said the former Labor government and United Voice should have gone straight to the Fair Work Commission to seek better pay for all workers “instead of trying to rush out $300m of taxpayer funds to a minority right before an election”.

Davison said Goodstart had long supported the campaign for payment of professional wages to educators in the early learning and care sector in recognition of the important work that they did.

“Mindful of the limited capacity of our parents to afford fee increases, a way forward needs to be found to address the low rates of pay in the early learning and care sector,” she said.

It is understood a majority of Goodstart employees are not union members.

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Goodstart childcare staff to receive 15% pay rise for just 10 months
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