Childcare workers are set for a 15 per cent pay rise over two years, with the federal government covering the cost for providers that don't increase childcare fees over a nominated cap.
Teachers and unions have welcomed the $3.6 billion boost, but don't want the temporary measure to end, arguing the point of the payment was to ensure wages were secure and staff were retained long-term.
There are fears wage rises may affect the long-term viability of some parts of the childcare sector. (Bianca De Marchi/AAP PHOTOS)
Childcare representatives, unions and business groups will appear before a parliamentary hearing on the matter on Wednesday, as the federal government seeks to have its bill setting up the wage increase incentive clear the Senate.
It means workers will get an extra $155 per week if they are on an award wage.
While noting it was important to ensure workers in the childcare industry earned higher wages, the Business Council of Australia raised concerns about the sector's profitability in the long run when government funding drops off.
The funding goes across two years, but enterprise agreements are often locked in for up to four years and require renegotiation "in perpetuity" as there are limited options to terminate it once in place, it said in a submission to the inquiry.
The council also scrutinised the fee increase cap - 4.4 per cent in 2025 - the government would set each year to ensure costs weren't passed on to parents.
Centres may be forced to make savings in areas "such as meals and consumables for children in care" to maintain profits, it said.
The payments were crucial to plugging workforce shortages and setting up the foundation for universal childcare, the Department of Education said.
There's an estimated shortage of 21,000 qualified childcare teachers, according to Jobs and Skills Australia figures.
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