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Private childcare is big business that is about to get bigger

By Daniel Donahoo - posted Tuesday, 14 September 2004

With the proposed merger of two of the largest private providers of childcare in Australia, the quality of childcare in Australia is further threatened. One listed company will own and operate nearly 800 childcare centres. As a listed company, its first obligation is to its shareholders to make a profit. It is not to provide the best quality support to the children in its care.

The private childcare sector may argue that making a profit does not interfere with providing adequate care. But, with a company model that anticipates an average profit of $100,000 per centre per year, families should question whether adequate care is all that they want? Parents don’t skimp on the quality of a child’s schooling. They pay big bucks for a perceived better education at private schools. The same cannot be said for private childcare. Higher costs don’t translate into better quality in an infant industry that is struggling to simply provide access for all.

A philosophy that says we can make money by caring for children does not fit the analysis of early childhood professionals. They say the first six years of life is the most crucial. It is in this time frame we can give children the best start and provide a foundation for the rest of their lives. The evidence is clear. Supporting the development of the first year of a child’s life is far more crucial than what school they attend in terms of their social, mental and physical development. The best people to do this childhood development work are parents. Unqualified childcare workers have a limited understanding of child development and while they might be “great with kids”, they are in essence baby sitters.


Private childcare centres need unqualified staff. Unqualified staff are cheaper to employ, they keep wage costs down and provide profit to shareholders. Private childcare centres will rarely employ more than the quota of qualified staff required by legislation. They will employ the minimum number of staff so that they just meet child/staff ratios. Ratios that are legislated, but are still concerning.

Hypothetically, a possible scenario that could occur in any centre is for two adults to have responsibility for six children, all less than six months of age. These workers would struggle to just keep up with nappy changes and feeds, let alone provide the kind of one-on-one stimulation necessary for children’s development at this age. And, one of these adults does not even need to have had any formal training in early childhood development.

McDonalds give their staff more training before they get them to sell burgers than private childcare services give to their unqualified staff. Marketing companies often pay their telemarketers more than qualified childcare workers. And, if you compare the situation between a non-profit centre that spends every dollar on extra equipment and resources to support their staff to provide the best developmental experience possible, with a for-profit centre that limits its resource and equipment budget to make sure they meet budget targets. Where would you rather your child be?

We are a society that contracts out our responsibilities: aged care services support our ageing parents, children’s services support the development of our children and schools have responsibility for educating our young people. We don’t like to hear that the services we rely on for support are not of the quality we expect.  When a childcare centre leaves a child locked inside when they leave for the day, or an aged care facility is found to give residents kerosene baths, those of us who have entrusted that organisation with the care of our loved ones naturally get defensive. Their failings invite judgement on our decision to use that service. The criticism cuts to the core of our guilt: that we ourselves are unable to provide the support we are paying others to give.

But, the quality of care we would give to our children, or our parents, can never be matched by paying someone else to do it. Consequently, we need to pull our heads out of the sand, hear that private childcare is limited in its ability to support the development of our children and make informed decisions about our children’s early years. Especially when the federal government’s National Agenda for Early Childhood so clearly drills home the importance of young children’s development. We need to use this knowledge to make a decision about what childcare service we will use, or if we want to use one at all.

Both, political parties are offering a few dollars tax relief for families and making unfulfillable promises about interest rates. Once again they are appealing to families' pockets and not to their hearts and minds. While this is going on your local childcare centre has joined the world of big business, now part of a company worth more than $700 million - twice as much money as the federal government has allocated to the National Agenda for Early Childhood. We desperately need better quality childcare services, and some perspective.

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About the Author

Journalist and columist with The Age, Sushi Das says he is ‘one of today’s young rebels’. Author and ethicist Leslie Cannold has referred to him as one of her ‘gorgeous men’.

Daniel Donahoo is fellow with OzProspect, a non-partisan, public policy think tank. He writes regularly for Australia's daily papers and consults on child and family issues. A father to two boys. Daniel's first book is called Idolising Children and explores our society’s obsession with childhood and youth. Updates on Daniel's work can be found at

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