The Abbott government is asking childcare providers to hand back $62.5 million earmarked for pay increase in the childcare sector as it axes what it has described as Labor’s “union slush fund”.
The $300 million Early Years Quality Fund, set up by the former Labor government earlier this year was set to give childcare educators an increase in wages over two years.
The Coalition now wants to redistribute the funds toward professional training and development for the sector.
$62.5 million of the fund has already been written into contracts with 16 childcare operators, and will be paid out, according to the government.
Although they have said they will not go back on the existing contracts, they are asking the operators to voluntarily put the funds into professional development and training.
Assistant Minister for Education Sussan Ley said that she had no legal ability to force childcare centers to repay the money, but “hoped” they would do the right thing.
Ley described Labor’s $300 million as a “childcare union slush fund”, releasing a report on Tuesday from PwC that was commissioned by the Abbott government, that she said showed that Labor’s fund was “deeply flawed and inequitable”.
“We committed before the election that we would undertake a considered measuredindependent review of Labor’s controversial fund,” Ley said.
“There was a clear rush by Labor to get these deals done for their union mates before the election and now they have left the Coalition and taxpayers to pick up the bill.”
Speaking at a press conference on Tuesday, Opposition early childhood spokesperson Kate Ellis said the government had let down childcare staff and said the government’s process was ”shambolic” and ”cruel”.
“So much for sensible, methodical government. Childcare providers have seriously just been told that their contracts will be honoured but also that the government wants the money immediately returned,” she said.
“Childcare providers are now being put in the impossible position of having to choose between the government’s wishes and their own staff’s wage increases.”