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From December the typical early childhood educator and carer will get a pay rise of at least $103 per week. By the following December, it will be more, taking the total to an extra聽.

And there will be more after that.

The two pay rises, totalling 15%, announced by Prime Minister Anthony Albanese on Thursday will be completely funded by the government. It鈥檚 part of a deal in which the childcare centres that actually employ the workers agree to increase their fees by no more than 4.4% over the next year.

The initiative, years in the making, is a down payment on a聽聽expected when the Fair Work Commission completes its review of the wages of workers in childcare and some other caring professions by mid-2025.

An earlier decision about aged care workers awarded increases up to聽.

Albanese鈥檚 move is good social and educational policy, and even better politics.

Employees in the early childhood education and care sector are among the lowest-paid of all professions with median weekly earnings less than聽聽of median adult earnings. The starting salary for adults is about聽聽per hour.

Attracting and retaining workers in the sector has been a chronic problem.

Australia鈥檚 childcare industry has one of the largest unfilled vacancy ratios of any occupation. In the Sydney region, childcare is the top occupation where vacancies聽. Early childhood teaching is the fourth-highest.

The government鈥檚 decision to increase wages early, without waiting for an order from the Fair Work Commission, is very welcome.

Until the current Fair Work hearing, child carers and childhood educators themselves had to prosecute聽聽cases using laws that were poorly designed to deal with gender-based undervaluation of care work.

The Fair Work Commission鈥檚 new approach derives from the Albanese government鈥檚 2022 reform of the Fair Work Act that聽

promote job security and gender equality.

滨苍听聽the commission received a report on the effect of gender-based occupational segregation. In early聽聽it decided to grant pay increases of between 15% and 28.5% for aged care workers. Its decision was based on a finding that their work had been historically undervalued because of assumptions based on gender.

At this year鈥檚 annual wage review, the commission announced it would undertake the same exercise for childhood educators and carers and a number of other caring professions. The results will be incorporated in聽.

Another Albanese reform brought in聽, allowing 64 early education and care employers and three unions to聽.

The United Workers Union has been asking for a聽聽increase. One of the big employers, the Australian Securities Exchange-listed G8, called on the government to fund a 15% hourly wage increase for specialist educators and a聽聽increase for all early childhood educators.

These developments represent a significant shift in wages policy and relative pay, one likely to more properly value care work and get unfilled vacancies filled.

Demand for early childhood education and care is high and rising.

Between 2014-15 and 2022-23 the proportion of children aged five years and under getting subsidised places rose from 40.8% to聽.

In terms of developing future citizens, this is a great achievement. But it is less so in terms of fees. Most of the growth was in聽, which are mostly run for profit.

The Australian Competition and Consumer Commission found last year that early childhood education and care was聽聽in Australia than in most other developed countries.

Average daily fees at centre-based day care climbed聽聽between September 2018 and July 2023. Out-of-pocket expenses increased by 7%.

The fees paid by families are a significant burden on them. Industrial relations expert Rae Cooper says they form part of the聽聽that limits women鈥檚 ability to work.

The deal accompanying Albanese鈥檚 pay rise for workers doesn鈥檛 impose a cap on fees, but it does require providers to not increase their fees by more than 4.4% over the next 12 months.

Whether this is the beginning of tighter quality and cost controls in ways seen as essential in a recent聽聽remains to be seen.

The measures will cost $3.6 billion over four years.

Whereas some argue that extra government spending聽, this extra spending will restrain fee increases at the same time as it boosts wages for a sizeable number of traditionally underpaid workers.

Merely accepting a Fair Work Commission decision on work value without providing funding for it and without obtaining guarantees on fees would have added to the inflation experienced by parents much more.

Deep problems remain with Australia鈥檚 system of early education and care.

Despite massive government subsidies, fees are聽.

The basic architecture of the system, set up in the聽, uses public money to fund a market of providers in which for-profits form the majority.

But this package of initiatives is an important step towards fixing things.

Families with young children face huge pressures from rising rents and interest rates. Insulating them from fee increases, at least for the next 12 months, is smart politics. It鈥檚 a down payment on work to come.

This article was originally published in .

John Buchanan is a聽Professor of Business Information Systems at the University of Sydney Business School. He has received funding from State and Federal Governments, unions, NGOs and employers for applied research undertaken over the last 35 years. His most recent applied research projects have been undertaken for IFM (Industry Funds Management), the NSW Teachers Federation, the NSW Nurses and Midwives Association and the Queensland Nurses and Midwives Union as well as icare NSW, custodian of the NSW Workers Compensation Insurance service. He is a member of the National Tertiary Education Union and was on the bargaining team that settled the latest enterprise agreement for the University of Sydney.

Frances Flanagan is a Lecturer in Law at University of Technology Sydney. She is a member of the National Tertiary Education Union.