A crime committed in a Victorian childcare centre a month ago has uncovered a dangerous situation, developing for decades, where the drive for profit has taken priority over care, education and safety.
One worker’s criminal actions have sent shockwaves through the community. Up to 20 centres have been identified as potential locations where he committed offences.
The federal government subsidised more than 9600 childcare centres to care for 800,000 children last year to the tune of $14.8 billion.
Fifty percent of all children under five attend childcare. With so much surety and a captive market, childcare has become a lucrative investment for companies — such as Vanguard Group and BlackRock Funds — looking to profiteer. These outfits also benefit from a lax accreditation system.
The industry is separated into for-profit and not-for-profit, with council- and community-run centres falling into the latter category. Private companies operate in both sectors. Not-for-profit service Goodstart Early Learning, for example, was founded by a collection of religious and non-religious charities.
The government’s early federal childcare standards, adopted in 1972, prioritised education. The system was changed in 1991 when the Paul Keating Labor government offered subsidies to for-profit childcare centres as part of its attempt to encourage women back to work.
Once there was government funding for the for-profit sector, there was an explosion of low-quality, high-profit centres, such as ABC Learning. It began with 18 centres and ballooned to more than 800 before collapsing. It was valued on the Australian Securities Exchange at $2.5 billion in 2006.
It huge profits derived from its low wages, low quality and bad business practices. The Australia Institute conducted a 2006 case study on ABC Learning, four years before its collapse, and documented staff saying the corporate chain centres “provide poorer quality”.
The many failures of Australia’s then biggest for-profit childcare care company were an indicator of what was to come.
Of the 300 to 400 new centres being built this year, 95% are for-profit. Low wages and low accreditation standards put children in unsafe situations. According to the ABC’s Four Corners, there are 72 serious incidents each day in childcare centres, a predictable and avoidable result from a system designed for profit over care.
Although there have been many serious incidents reported in Naarm/Melbourne and in Gadigal Country/Sydney, they are just the tip of the iceberg.
An ABC investigation in March revealed more than 26,000 serious incidents last year, a 27% jump in three years. There is one report of sexual misconduct every day.
NSW Greens MP Abigail Boyd used parliamentary privilege to collect information on serious incidents and centres, such as Affinity Kids Academy, which had between 20 and 40 breaches, but continued to operate.
Nicole, a childcare worker and union delegate, told 3CR’s Green Left Radio on July 11 that for-profit childcare centres “seem to be the norm”. She described centres that “run at minimum ratios” [of workers to children], or use waivers for ratio exemptions “to bring maximum profit to their shareholders”.
For-profit centres rely on less-skilled staff so they can pay lower wages. Low wage centres have difficulty retaining staff and rely heavily on casual workers with lower levels of qualification. They churn through quality staff.
A 2022 Australian Competition and Consumer Commission investigation found “a correlation between providers of large centre-based day care paying staff higher wages and achieving higher quality ratings under the National Quality Standard”. It said providers with ratings “Exceeding National Quality Standard” and “Excellent”, on average, “pay their teachers 33% above the Award”.
Wages are directly linked to the quality of care children receive.
We are now witnessing the results of neoliberal policies on vulnerable children. Lessons have not been learnt, including regulation of the sector. With guaranteed returns, the industry is rife with investors looking to make money at the expense of children’s care.
Land investors are also buying land to convert to centres, phony education institutions are selling inadequate degrees and centres are skimping on meals to extend their bottom line. Making profit the purpose means the industry will always be dangerous.
The current exposé over corporatised childcare should lead governments to conclude that childcare, part of the educational experience, should be taken out of the market.
We need early childhood education to be free and government funding for the community not-for-profit sector. These are small, but vital, steps that will allay parents’ concerns about how their children are being treated in care and encourage more women to go back to work.
[Adam Bremner is a former childcare worker.]