Child care's corporate parasites

Tom Pearson

The policies of deregulation and privatisation have exposed all 
aspects of life to exploitation for profit. As has been revealed 
in the past couple of months, even child care, a crucial part of 
the lives of so many working people and their children, is now 
being used as a cash cow by corporate parasites.

Both major parties are kicking around child care as a political 
football in the lead-up to this year's federal elections, and 
both parties are guilty of handing over child care services to 
the private sector.

A strong grassroots movement for the provision of quality, 
affordable childcare had gathered considerable momentum by the 
1980s. As a result community-based and government-funded centres 
received operational subsidies and parent fee relief on a sliding 
scale, which allowed access for low-income families.

Publicly run centres were set up with federal funding and funding 
from local councils. Care was strictly regulated. In 1993 
Australia's first national system for child care was introduced. 
The landmark Quality Improvement and Accreditation System was 
formulated through discussions with child care organisations in 
the states and territories.

It was based on 52 principles and recognised that "good quality 
care must appreciate the individuality of every child and treat 
all children equally". The special needs of children with 
disabilities, children from non-English speaking backgrounds and 
Aboriginal and Torres Strait Islander children were included.

The principles set four fundamental standards of care: 
Unsatisfactory, Basic, Good Quality and High Quality. These took 
into consideration the relationship between staff and parents, 
staff and children, staff and staff, the programs for the 
children, nutrition, health and safety, centre management and 
staff development.

Quality of care was paramount. Staff-child ratios were set and 
strictly adhered to, with children under two requiring extra 
qualified staff.

It was in 1990 that the then Federal Labor Government began 
providing funding to the emerging for-profit child care industry 
by extending fee assistance to parents using private centres.

The owners of these private centres opposed the new system. 
Coordinator for the NSW Community Child Care Cooperative, Jill 
Ruchel, voiced her concern at the time: "I think it is very 
short-sighted [of the private centres]. Frankly I'm a bit worried 
about what they're so afraid of — what are they doing in their 
child care centres that they are so afraid of having people see?"

More and more government funding was diverted into the for-profit 
sector as government commitments to provide quality, affordable 
child care were abandoned. Though the high standards still 
applied in community-based centres, the lack of funding began to 
bite.

Centres were increasingly forced to make hard budget decisions 
that avoided affecting the quality of care. This meant such 
things as reducing the number of places available and increasing 
fees.

Meanwhile, the private centres increased their fees. Most refused 
to take children under two years of age because they didn't want 
to employ the extra staff required.

And the Howard Government came to office and seized the 
opportunity that had so thoughtfully been provided by Labor and 
immediately ripped into child care services.

In 1997, after less than a year in government, Howard's hatchet 
men had left their own trail of destruction, cutting hundreds of 
millions of dollars from child care funding. The resultant fee 
increases forced thousands of parents away from the community 
centres. Centres across Australia began closing.

The Liquor, Hospitality and Miscellaneous Workers' Union (LHMU), 
reported they were being contacted each day by child care workers 
who had been made redundant or had had their hours reduced.

Today, the concern expressed more than ten years ago by the 
Community Childcare Cooperative has been confirmed with 
revelations about the two biggest private operators. Peppercorn 
and ABC Learning came under the investigative scrutiny of the 
7.30 Report on the national broadcaster last month.

Together these two for-profit operators run more than 600 centres 
with over 50,000 children around Australia in their care each 
week. When former staff told the 7.30 Report that food was 
rationed, Peppercorn chief executive Michael Gordon was asked if 
his company generally cuts the food budgets of centres they take 
over. He replied, "No, we generally don't."

He said it comes down to the efficiency of the centre's cook in 
using the budget. Gordon views parents and children as profit 
opportunities: "Over time it will be seen that these corporate 
structures can actually add and deliver an increased level of 
value to parents and children."

Revealingly, Gordon listed his priorities as what he called the 
"four stakeholders", in this order: the investor; the parents; 
the children; the staff.

The LHMU says the first thing private owners do is look at 
reducing the budget, in particular through the staff — who are 
already among the lowest paid workers in Australia — with the 
imposition of Australian Workplace Agreements (individual 
contracts) to cut wages and conditions.

ABC Learning is worth $500 million and is the corporate sponsor 
of Brisbane Bullets basketball team. Managing director Eddie 
Groves is on the Business Review Weekly's list of richest 
Australians.

Like his counterpart at Peppercorn, Groves has been funded by 
taxpayers via the Government's unofficial corporate welfare 
program, but you'd never know that listening to him crow to the 
Australian Financial Review this month about the secret of his 
success in exploiting children and their carers.

"Every barrier that a government or a bank, or somebody put in 
front of me, I jumped through it; I didn't care how hard it was, 
I'd just do it."