Wage Justice for Early Childhood Education and Care Workers (Special Account) Act 2024

The central legal concept is the special account, a creature of the Public Governance, Performance and Accountability Act 2013. Unlike an appropriation that is spent directly from the Consolidated Revenue Fund, a special account allows amounts to be credited from appropriations and then debited for the specified purpose without requiring a further annual appropriation. The Account here is for the sole purpose of making grants to support remuneration increases for ECEC workers. The concept of approved provider is imported from the A New Tax System (Family Assistance) (Administration) Act 1999. This is the gatekeeper definition: only entities that have been approved under that regime to receive Child Care Subsidy or other family assistance payments are eligible for a grant. The Act does not create a new category of eligible recipient; it piggybacks on an existing regulatory classification. The concept of remuneration is not defined in the Act. The grant money must be used "in relation to the remuneration of workers within a class specified in the agreement". Remuneration is broader than wages - it could include superannuation, allowances, bonuses, or other benefits. The Secretary must specify the class of workers (e.g., "all educators at the service" or "room leaders only"), which creates potential for variation and negotiation between the Commonwealth and each provider. The fee increase limitation is a mandatory term condition. The phrase "limit any increase in fees" gives the Secretary discretion over both the quantum and the method of limitation. It could be a flat cap, a formula linked to CPI, or a prohibition on any fee increase for the grant period. This condition is the primary control mechanism intended to prevent taxpayers from funding wage rises that are then passed on to families as higher fees. The concept of repayment circumstances in the agreement is the enforcement lever. Since the Act creates no separate penalty, the only sanction for non-compliance is a contractual obligation to repay some or all of the grant. The sunset provision means the entire Act, including the Account and the grant-making power, vanishes on 1 July 2028. Any unspent balance in the Account would presumably revert to the Consolidated Revenue Fund. The transitional provision preserves continuity: agreements under the earlier ECEC Workforce Retention Payment program are deemed to be agreements under this Act from 1 July 2025, meaning their terms continue to apply, and they become part of this scheme.

The direct effect falls on approved providers of early childhood education and care - typically privately owned or not-for-profit childcare centres, family day care services, and outside school hours care providers. They must apply for grants, enter into agreements, use funds for specified worker remuneration, cap fee increases, and face repayment risk if they breach terms. Their legal character matters: if a partnership or unincorporated body, each partner or governing body member bears joint and several obligations and permissions. The workers in the sector are the intended beneficiaries - educators, room leaders, centre directors, and other staff. However, the Act does not guarantee that any particular worker receives a wage increase; it only mandates that grant money be used "in relation to the remuneration of workers within a class." A provider could in theory use the grant to fund an existing wage bill and redirect other revenue elsewhere, as long as the class of workers receives some benefit. The families paying for childcare are indirectly affected through the fee increase limitation. If the cap binds, families may face smaller fee rises than they otherwise would; if it is set above market rates or is poorly enforced, families could still see increases. The Commonwealth Department (administered by the Secretary) bears the administrative burden of processing applications, negotiating agreements, monitoring compliance, and recovering overpayments. The Minister can make rules by legislative instrument, but cannot create offences or taxes. Taxpayers ultimately fund the grants; the Act does not specify a total funding envelope - that is left to appropriation Acts. Enterprise bargaining participants are mentioned in the objects: the Act is intended to encourage good faith bargaining and enterprise agreements. This may mean grants are conditional on providers having or negotiating an enterprise agreement, though the Act does not explicitly require this. The union representing ECEC workers (such as the United Workers Union) has a strong interest in the design and enforcement of the grant conditions.

The primary duty is on the approved provider to comply with the terms and conditions of the grant agreement under section 11(2). That duty is owed to the Commonwealth, and breach can trigger repayment. The provider also has a duty to apply for the grant before receiving any money (section 10(4) - must apply). There is no right to a grant; the Secretary retains discretion to decide whether to make a grant and on what terms. The provider has a right to be considered on application, but no entitlement. The Secretary has duties: to establish and administer the Account (section 8(3)), to ensure each grant agreement includes the mandatory terms (section 11(3)), and to enter into, vary, and administer agreements (section 11(4)). The Secretary may delegate functions or powers under Part 3 to an official of a non-corporate Commonwealth entity with appropriate expertise (section 15). The delegate must comply with ministerial directions. The Secretary can exercise powers conferred by an agreement (section 13). The Act gives no rights to workers to enforce the grant conditions directly. Workers do not have standing under the Act to sue a provider for failing to pass on the grant; that is a matter between the provider and the Commonwealth. However, if the agreement specifically names a class of workers and requires the grant to be used for their remuneration, the provider may have a contractual obligation that the Commonwealth could enforce. The fee increase limitation imposes a duty on the provider not to raise fees beyond the agreed limit. If the provider charges more, the Commonwealth can demand repayment. There is no right for parents to enforce this limit directly; their recourse is to complain to the Department or to vote with their feet. The Crown is bound (section 6), meaning the Act applies to government-operated ECEC services, but the Crown is not liable for prosecution under the Act. The Act extends to external Territories, covering services in Christmas Island, Norfolk Island, etc. The Minister has the power to make rules (section 18) but only for matters prescribed or necessary; importantly, rules cannot create offences or civil penalties, impose taxes, set appropriations, or amend the text of the Act. This limits the Minister's ability to add enforcement teeth without further legislation.

The Act contains no criminal penalties, no civil penalty provisions, and no infringement notices. Enforcement is entirely through the contractual mechanism embedded in the grant agreement. Section 11(3)(c) requires the agreement to "provide for the circumstances in which the recipient must repay amounts to the Commonwealth". If the recipient fails to comply with any term - for example, using the grant for non-specified workers, increasing fees beyond the cap, or failing to maintain records - the Commonwealth can demand repayment of some or all of the grant. The note to section 11 states that an amount repayable is a debt due to the Commonwealth, which means it can be recovered through the ordinary courts under debt recovery processes. This is a relatively low-touch enforcement model: it avoids creating new regulatory bodies or inspectorates, and relies on existing Commonwealth debt recovery mechanisms (including garnishee notices, offsets against other payments such as Child Care Subsidy, or legal action). However, the absence of specific penalty provisions means the deterrence effect is limited to financial recovery; there is no separate punishment for misconduct. The Act does not require the Commonwealth to remit overpayments or impose interest; it depends on the terms the Secretary chooses to include in each agreement. The Secretary could include terms requiring repayment plus interest or a fixed penalty amount - but that would be a contractual penalty, not a statutory penalty, and would be subject to the common law rule against penalties if not a genuine pre-estimate of loss. The Minister making rules cannot create offences or civil penalties, and cannot confer powers of entry, search, or seizure (section 18(2)). This prevents the rules from being used to supplement enforcement with inspectorial powers. The transitional provision (section 16) converts existing ECEC Workforce Retention Payment agreements into agreements under this Act, meaning the enforcement terms of those agreements continue to apply. The Secretary has the power to delegate enforcement functions to officials (section 15). There is no provision for administrative review of enforcement decisions; a provider aggrieved by a repayment demand would need to challenge it through judicial review or defend a debt recovery action in court. The sunset in 2028 means that after that date, no new grants can be made, and existing agreements presumably continue until their end date or until the Account is closed - but the Act itself ceases to have effect, which could create uncertainty about the enforceability of contractual terms post‑sunset. A provider could argue that the Commonwealth's authority to enforce the agreement disappears with the Act, though the agreement may survive as a separate contract.

The Act interacts most directly with the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The Account is a special account under that Act, meaning it is subject to the PGPA regime for financial management, reporting, and audit. The Secretary is responsible for the Account under subsection 8(3), and the PGPA Act's provisions on special accounts (section 80) apply. Appropriation Acts will specify amounts to be credited to the Account. The note under section 8 references that an Appropriation Act may contain a provision allowing debits against an appropriation item to be credited to the special account. The Act closely interacts with the A New Tax System (Family Assistance) (Administration) Act 1999. The definition of "approved provider" comes from that Act, so only providers approved under the Child Care Subsidy system are eligible. The transitional provision (section 16) directly references section 85GA of the A New Tax System (Family Assistance) Act 1999, which is the power under which the earlier Workforce Retention Payment program agreements were made. That transitional provision causes those agreements to be treated as if they were agreements under this Act from 1 July 2025. The Fair Work Act 2009 is implicated indirectly. One stated object is to "encourage good faith bargaining and the making of enterprise agreements". The grant scheme could be structured to incentivise providers to enter into enterprise agreements, which would then be regulated under the Fair Work Act. If the grant conditions require wage increases above the modern award rate, the interaction with the Fair Work Act's provisions on minimum standards and bargaining may be relevant. The Convention on the Rights of the Child is cited as an object in section 3(2), though the Act does not create any specific rights for children or impose obligations to comply with the Convention. The reference appears symbolic, intended to support the policy rationale. The Executive power of the Commonwealth is explicitly preserved by section 14: Part 3 (grants) does not limit the Commonwealth's executive power. This means the Commonwealth could make grants outside this Act using its executive power, for example, to unapproved bodies or for different purposes. The Act interacts with administrative law: decisions of the Secretary (such as refusing a grant, imposing onerous conditions, or demanding repayment) are likely subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977, though exemptions may apply. Providers can challenge the legality of conditions or repayment demands. State and territory laws regulating childcare licensing and fees may overlap with the fee increase condition in the grant agreement. A provider may be bound by state price controls or mandatory fee caps; the grant agreement condition adds a further layer. There is no express provision for inconsistency between the grant condition and state law.

The Act is new and has not been amended. It was passed by the House of Representatives on 12 September 2024, passed by the Senate on 18 November 2024, and received Royal Assent on 10 December 2024. It commenced the day after Royal Assent, on 11 December 2024. There have been no amending Acts or legislative instruments that modify its text. The sunset provision (s 17) sets an expiry date of 30 June 2028, which acts as a default amendment by effluxion of time unless Parliament extends or replaces the Act before that date. The Act contains a rule-making power (s 18) that allows the Minister to prescribe matters by legislative instrument, but the rules cannot directly amend the text of the Act (s 18(2)(e)). Any substantive policy change - such as expanding the class of eligible recipients, altering the mandatory terms, or extending the sunset - would require an amendment to the Act itself by Parliament. The Act does not contain any automatic indexation or review provisions.

The Act is too recent to have generated any reported litigation. There are no cases as of the drafting date. Potential future litigation could involve: (1) a provider challenging a repayment demand on grounds that the grant agreement term was invalid beyond the scope of the Act, or that the condition was unreasonable; (2) a challenge to the refusal of an application for a grant on procedural fairness or jurisdictional error grounds; (3) a dispute over whether a particular use of grant funds fell within the specified class of workers; (4) a challenge to the Secretary's delegation of powers to an official without appropriate expertise; (5) a test case on whether the transitional provision validly converts an existing agreement that may have had different terms; (6) a class action by workers seeking to enforce agreements as third-party beneficiaries, if they can establish that the agreement created a duty owed to them. The Act's reliance on contractual enforcement rather than statutory penalties may limit standing for workers to bring litigation directly under the Act. They would likely need to rely on the Fair Work Act or contract law. Any litigation would likely engage principles of administrative law, contract law, and possibly constitutional law regarding the Commonwealth's power to make grants with conditions (section 96 of the Constitution) - though that power is broad. No litigation history exists yet.

Several features of the Act could catch providers or policy makers by surprise. First, the definition of approved provider is entirely cross‑referenced to the Family Assistance Administration Act. A provider that loses its approved provider status under that regime automatically becomes ineligible for a grant, even if the grant agreement is still running. The Secretary may have the power to terminate or demand repayment if the provider's approval is revoked. Second, the mandatory fee increase limitation (s 11(3)(b)) does not define "fees" or "increase in fees". Could a provider introduce a new fee for a service not previously charged (e.g., a registration fee) and argue that is not an "increase"? Could they reduce a discount and claim no fee increase? The Secretary must specify the limitation in the agreement, but the underlying Act leaves it vague, inviting disputes over interpretation. Third, the use of grant money for "remuneration" is broad. A provider could use the grant to pay for superannuation or payroll tax liabilities arising from a wage increase, rather than putting the entire grant amount into workers' take-home pay. This could dilute the wage‑rise impact. The Act does not require the provider to "pass through" the full grant to workers; it only requires that the grant be used "in relation to" remuneration. Fourth, the transitional provision (s 16) automatically converts existing ECEC Workforce Retention Payment agreements on 1 July 2025. Those agreements may have included terms that are incompatible with this Act, such as different fee‑cap arrangements or different worker class definitions. Providers may not realise they are now subject to the new enforcement framework. Fifth, the sunset on 30 June 2028 creates a hard deadline. If the government does not extend the scheme before that date, the Account ceases to exist and any unspent balance may be lost to providers. Long‑term wage commitments funded by the grants may become unfunded. Sixth, the no‑loan rule (s 10(3)) means the Secretary cannot structure the grant as a repayable loan with interest; but a grant with repayment conditions for non-compliance is not a loan. This subtlety could cause confusion if a provider receives a grant and later has to repay it - it is a debt, but not a loan. Seventh, the Act does not provide any statutory immunity for providers that rely on the grant and later have to repay; they have no right to keep the funds even if they acted in good faith. Eighth, delegation is allowed only to officials of a non‑corporate Commonwealth entity - this excludes officers of state governments or private contractors. The Secretary cannot outsource decision‑making widely. Ninth, the Crown is bound but not liable for prosecution (s 6). Government‑run ECEC services are subject to the Act but cannot be penalised for breach - only the contractual remedy applies, and enforcement against a government entity may be politically difficult.

For an approved provider seeking to receive and retain a grant, compliance begins with submitting an application to the Secretary. The application must be made before any grant is paid (s 10(4)). Once the application is approved, the provider must enter into a written agreement with the Commonwealth that sets out the terms and conditions (s 11(1)). That agreement must contain three mandatory provisions: a specification of the class of workers whose remuneration may be funded from the grant (s 11(3)(a)); provisions limiting any increase in fees the provider may charge for ECEC services (s 11(3)(b)); and provisions setting out the circumstances for repayment of amounts to the Commonwealth (s 11(3)(c)). The provider should scrutinise these clauses carefully before signing, as they become the sole source of operational obligations. In practice, compliance involves using the grant money only for the remuneration of the specified class of workers, and ensuring that any use (including for superannuation, payroll tax, or other associated costs) can be demonstrably linked to those workers. The provider must keep detailed records of how the grant was spent, including timesheets, payslips, and payroll reports. The fee increase limitation must be observed: the provider must not increase fees beyond the limit set in the agreement. This may require programming changes in billing systems and notification to families. If the provider intends to change fee structures (e.g., introduce a new charge), they must ensure the change does not effectively increase fees beyond the cap. The provider must monitor the composition of its workforce to ensure that the class of workers specified in the agreement is still defined correctly (e.g., if a worker leaves and a new hire takes on a different role, the class may need to be updated). The agreement can be varied by the Secretary (s 11(4)), so the provider should request variations if circumstances change. Compliance with repayment provisions requires the provider to report any circumstances that might trigger a repayment obligation (e.g., a breach of the fee cap or misapplication of funds) to the Secretary promptly. The provider should keep the grant funds separate from other revenue to simplify tracking. Where a provider is a partnership or unincorporated body, each partner or governing body member bears the compliance obligations jointly (s 12). The provider should ensure all relevant individuals are aware of their duties and have access to records. If the provider is a former participant in the ECEC Workforce Retention Payment program, they should review their existing agreement to ensure its terms are consistent with this Act from 1 July 2025. Finally, the provider must note the sunset date (30 June 2028) and plan for the cessation of the grant scheme. Compliance does not end with the grant payment; the provider may be required to repay funds if any term is breached up to the end of the agreement. The Secretary may delegate compliance oversight to officials (s 15), so the provider should communicate with any delegate who has authority to vary or enforce the agreement.