Unfunded minimum wage increase to hit early learning budgets

09 February 2023

Early learning providers have no option but to absorb the government’s unfunded minimum wage increase into budgets already stretched to breaking point.

“Everyone wants to see early learning workers paid what they deserve, but this increase will have significant knock-on effects. It seems the government hasn’t thought it through properly for early learning,” said ECC CEO Simon Laube.

“Many centres will have some of their team on minimum wage - those increased costs are likely to come from raising parent fees or reducing the number of teaching staff or opening hours. Government funding support does not recognise the pay for people in non-teaching roles.”

The budget blowout caused by the minimum wage increase means some providers may not opt in to the government’s extended Pay Parity offer, leading to more experienced teachers missing out on being paid fairly.

The ECC’s advice to providers is to start reviewing their budgets now and talk to their team about what the changes are likely to mean.

“Once again, providers are expected to pay for government initiatives. Unless the Pay Parity funding shortfall is urgently addressed, this minimum wage increase could lead to increased costs to parents,” said Simon Laube.

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