Mr Piccoli, the director of the UNSW Gonski Institute for Education, said the 20 per cent wage increase was difficult to achieve because of its expense but insisted the federal government needed to "bite the bullet" to make sure the sector was attracting and retaining a quality workforce. "I think it is well overdue because the discrepancy in pay between trained early childhood educators and primary school teachers is significant and it's draining qualified staff away from early childhood," he said. He cautioned that the subsidy should be accompanied by significant reforms, saying there was scope for "substantially more regulation" in the sector. "If Labor win, then I would hope that, post-election, they put together a package of reforms to the sector so that the additional taxpayer funds go directly to supporting children, particularly low-SES [socioeconomic status] kids who benefit the most from early childhood education," he said. The measure will phase in pay rises for 100,000 early childcare workers over the next eight years in a bid to lift the industry’s low hourly rate and attract more staff.

Some of the taxpayer subsidies will flow to the biggest players in the industry, which employ thousands of workers in the 195,000 strong workforce. Long-day care giant G8 education made a $71 million profit last year and announced a fee rise of up to 4.5 per cent at 500 centres within hours of Labor's announcement. Opposition Leader Bill Shorten (left) and Deputy Opposition Leader Tanya Plibersek (right) seen at the Goodstart Early Learning. Credit:Darren England Not-for-profit company Goodstart Early Learning paid its executives $3.7 million last year and had an operating surplus of $8 million off $1 billion revenue. Goodstart advocacy manager John Cherry said increased federal funding was one of two ways to boost wages, with the other being fee rises for parents.

"The Productivity Commission identified the long-day care sector as a very low margin sector. And for not-for-profit providers, it's close to no margin," he said. Loading Replay Replay video Play video Play video Mr Cherry said it was reasonable for the government to put in place stronger oversight to accompany the cash injection. Samantha Page, chief executive of advocacy group Early Childhood Australia, said it was concerning that some corporate players made "eye-watering" profits but played down the scale of the problem. "It is a predominantly public-funded sector and it's delivered by a really diverse range of providers, most of whom are either small businesses or small non-government organisations," she said.

She said the churn of staff was a "catastrophe" for the sector and needed to be addressed. Elizabeth Death, chief executive of industry body the Early Learning and Care Council of Australia, backed Labor's proposal and said not-for-profit and for-profit providers shared a commitment to quality early learning for children. She said the sector would "work closely with the elected government to ensure funding is directed to deliver the intended benefits and positive outcomes for children and families". Childcare workers union United Voice, which announced Labor's policy 15 minutes before the party did on Sunday, claimed credit for the surprise wage intervention.

Loading It has two former executives in Parliament – Labor senator Sue Lines and new Perth MP Patrick Gorman. It donated $800,000 to the Labor Party last year. In 2013 the union used a similar $300 million fund set up by Labor to give a temporary boost to educators as a recruitment tool. An audit by PricewaterhouseCoopers found it had quadrupled the number of childcare centres in union-negotiated enterprise agreements by telling workers they had to sign up to the union to be eligible for a pay rise. In a social media post, United Voice said "we need every educator on board to make this happen", and asked followers to sign up immediately after Mr Shorten's announcement.