Australia’s childcare sector has been rocked by scandal, putting the future of Australia’s childcare reforms and the legacy of the original 2020 reforms in doubt. ABC Learning Centres was the dominant player in the industry, fiercely competitive and quite literally driving the long-day care market. By 2008, they commanded a stunning 20 to 25 percent share. At its height, the company served in-home care for more than 100,000 children and had about 16,000 employees on their roster. Yet, despite the harm it caused, its ambitious expansion and reliance on government investment would prove to be its undoing.
ABC Learning Centres, established in 2001. In only five short years it went public and reached a $2.6 billion valuation. The company’s rapid growth coincided with the Howard government’s generous Child Care Benefit, which it adapted its business model to accommodate. This dependence on government policy led to fundamental questions regarding the sustainability of its operations.
The Shift Toward Privatisation
The early 1990s were a watershed moment for family policy in Australia. The Hawke Labor government took a brave decision to embrace the market for childcare services. This action opened up the floodgates for a corporatized care that has become entrenched and widespread. This strategy, while intended to improve productivity of the sector, increased vulnerability.
Professor Susan Newberry has noted that one of the reasons for this shift was to curb the small advancements made in improving worker qualifications and professional status in childcare. She stated, “What is not so well known is that one of the major reasons that the Hawke government pursued the path of private, for-profit care was to contain the small advances that had been made towards increasing the qualifications of workers in child care and improving their professional status.”
Yet as ABC Learning Centres grew rapidly, and somewhat recklessly, under this age of reform, it was setting off accountability alarm bells across the sector. Professor Deborah Brennan warned federal senators in 2009, describing Australia’s childcare system as “a vast national experiment with our children.” It was that metaphor that really underscored the dangers of putting profit ahead of quality care.
The Collapse and Its Implications
The sudden collapse of Australia’s largest for-profit childcare operator, ABC Learning Centres, in late 2008 shook the entire Australian childcare sector. Critics described how its business model had become too reliant on government policy and funding. Yet this reliance on government funding put the firm at risk when these levels of support changed.
Professor Newberry addressed these issues directly, telling senators that “from the beginning, ABC was a creature of government policy.” She pointed out that ABC, as a public company, issues quarterly financial reports. These documents are designed to entice investors, not ensure oversight or accountability for quality of care.
The fallout from ABC’s collapse extended beyond financial loss. It raised serious concerns about the systemic vulnerabilities within Australia’s childcare sector. Law enforcement and crime scientists have been sounding the alarm. They purport that Australians are grossly ignorant of just how far pedophile rings have entrenched throughout the $22 billion trade. This shocking disclosure has led to an unprecedented level of demand for reform and oversight within the industry.
Calls for Reform and Accountability
In March 2023, then Prime Minister Anthony Albanese rebuffed requests for a royal commission into the childcare sector. Despite these accumulating scandals and upon the chilling revelations about the safety, device reliability, and accountability, his administration has not taken significant steps to hold his agency accountable.
Renate Gebhart-Jones serves as a conduit for inspiring community commitment to high quality childcare. She elaborated on her discontent at the prevalent mindset that childcare is a purely parental responsibility. “I think there has been a very strong emphasis around children being solely the responsibility of parents,” she stated. “Children are part of our community. We speak about how these children are going to be our future workforce… This is our future generation, our investment.”
Takeaway #6 By Professor Brennan He also highlighted the importance of being careful about how we approach the way childcare providers are run. “What we have to do is be much more cautious about how things are playing out on the ground and the kind of accountability that we are seeking from providers — not just for-profit providers but all providers — who are caring for our children and spending our money,” she urged.
