Double whammy for mums and dads

November 8, 2008

In a double whammy for working parents, last week finance minister Lindsay Tanner indicated that paid maternity leave was in doubt as ABC Learning childcare centres went into voluntary administration.

Blaming the slump in government revenues on the global financial crisis, federal finance minister Lindsay Tanner was reported by the November 7 Sydney Morning Herald as saying there had been "no explicit government promise" to implement the 18-week paid scheme, as recommended by the Productivity Commission on September 29.

While Tanner did not rule out the maternity leave scheme, he echoed federal treasurer Wayne Swann who told the November 6 Sydney Morning Herald that the only guaranteed "post-election promise" was a pension rise — but next year.

Australia is one of only two OECD countries that doesn't have publicly-funded maternity leave. More than half of Australia's female workers do not have access to paid maternity leave. The 18-week scheme has the support of unions, the Australian Industry Group and the federal sex discrimination commissioner, Elizabeth Broderick.

Meanwhile, on November 6, parents of 120,000 children were hit with the news that childcare super-monopoly ABC Learning Centres, has gone into voluntary receivership.

The company's decision to fold has nothing to do with its fees being too low to make a profit. Far from it. As the only available childcare centre in many parts of Australia, ABC Learning has had a virtual monopoly.

It has used this market advantage to charge parents exorbitant fees, 50% (formerly 30%) of which are paid by the federal government's childcare payment subsidy.

The ABC's financial problem was its director: Eddy Groves had "invested" too much of the company's capital in the dodgy US sub-prime loans market. When that collapsed, Groves and ABC Learning were caught short.

Federal workplace minister Julia Gillard promised on November 6 to help affected families and the 16,000 ABC Learning employees.

But the Australian Liquor, Hospitality and Miscellaneous Workers Union is still waiting for a guarantee for workers' annual leave during the Christmas-New Year period when many ABC centres are closed.

"We need cast-iron guarantees into the future about these accrued entitlements", LHMU assistant secretary Susan Lines told Fairfax Radio Network on November 7, adding the federal government should pressure the administrators to make the commitment.

But Canberra has committed an extra $300 million this financial year to the failed company through its childcare "fee rebate" — which is really a gift to private childcare centres — to keep it afloat. What happens after that is in the lap of the administrators.

While crying poor and unable to commit to paid maternity leave, the federal government has nevertheless found a spare $300 million to throw at one private childcare operator.

Michael Cahill, in his letter to the November 7 SMH, suggested an alternative. "Economic stimulus?", he asked. "Nationalise ABC Learning and double the wages of all childcare staff." Simple.

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