The Abbott government has thrown the childcare sector into disarray by asking providers to ''do the right thing'' and hand back $62.5 million given to them by the former Labor government for wage increases.

The Assistant Minister for Education, Sussan Ley, said on Tuesday the government would instead use the $300 million allocated for professional training and development for childcare workers.

Labor's $300 million was to boost the wages of 30,000 childcare workers in 1100 childcare centres, bolstering the $19-an-hour wages of certificate III childcare workers by $3 an hour, and the pay of early-childhood teachers by $6 an hour.

Ms Ley said under Labor's plan only 30 per cent of childcare workers would receive a pay rise, while 70 per cent would receive nothing.

On Tuesday Ms Ley released a report by PriceWaterhouseCoopers that she said showed Labor's fund was ''deeply flawed and inequitable''. She said the money, which would be paid only if employers signed enterprise bargaining agreements, was a blatant tactic to recruit more union members.

Labor accused the Abbott government of breaking another election promise. ''We saw in the Parliament last week the Prime Minister stand up and say, 'We will absolutely honour all of our commitments, and contracts which have been entered into will be honoured','' shadow minister for education Kate Ellis said.

''That didn't even last for a week. We now see that promise is in absolute shatters.''

But the move was welcomed by some in the childcare industry.

Prue Warrilow, the national convener of Australian Community Children's Services, said the 30,000 workers expecting a pay rise would be disappointed, but she supported the idea of spreading the money more evenly among the sector. ''We thought it was poor policy from the previous government because it was very divisive,'' Ms Warrilow said.

''It was a pay rise only going to about a third of workers. It was not equitable. The other point was, we felt that smaller services would be disadvantaged because they don't have the capacity to apply for the funding in the same way that larger operators could.''

The biggest provider of early learning and care in Australia, Goodstart Early Learning, said it was disappointing that its funding contract with the federal government would not be honoured. However, it also would not be challenging the issue.

The president of the Australian Childcare Alliance, Gwynn Bridge, also believed Labor's funding arrangement was unfair for the majority of childcare workers.

''It was only going to raise wages for 27 per cent of the sector,'' Ms Bridge said on Tuesday.

But the chief executive of Early Childhood Australia, Samantha Page, said the government's decision would come as a blow to the sector's 100,000 workers. ''This is a disappointing day for the educators who were expecting wage increases,'' Ms Page said.

''These are hardworking individuals providing vital services to our children, and they need to be recognised for their contribution through better wages.''

Coalition Government Asks Childcare Providers To Return Millions Allocated Under Labor To Boost Wages