The childcare factory

The demise of ABC Learning Centres at the end of October and the subsequent $22 million government bail out in early November has seen the childcare industry fall under the microscope. How much of the market should private operators like ABC Learning control? What form should government support for childcare take? And does our reliance on formal childcare make sense?

In an industry with relatively low levels of concentration, ABC Learning enjoyed a dominant position operating over 1,000 centres with a market share of more than 20 per cent - one in every four children in childcare attended an ABC Learning facility.

The power ABC Learning commanded came from both aggressive expansion and indirect government support. In 2008-09, Canberra is expected to pump up to $1.8 billion into childcare measures such as the baby bonus. This support has acted as a springboard for the industry which has grown almost 6 per cent annually since 2003 and is set to be worth around $7 billion in 2009.

Not only is there a favourable regulatory environment, but the industry has also hit the demographic jackpot.

Since the mid 1990s, the popularity of childcare has boomed as several factors aligned.

Women entered the workforce in increasing numbers, and declined to take extended leave to provide stay-at-home childcare. Mortgages expanded in line with the surging property market of the early 2000s, and to maximise leverage, income from both mother and father was mandatory. At the same time, the concept of retirement, along with the term itself, received critical review. This resulted in a childcare void left by grandparents who chose a Pacific cruise over minding the grandchildren.

As a result of these trends, the drop-off and pick-up at childcare centres has come to typify the mornings and afternoons of thousands of parents around Australia.

Today, almost half of all children are in childcare, with formal care provided by registered centres accounting for a growing proportion. Delving deeper, for families where both parents are employed, almost 60 per cent of children aged 0-4 are enrolled in formal childcare. Operators, including ABC Learning, took advantage of these trends and expanded at a rate which brought smiles to investors and parents alike.

During this decade, childcare has become a reality for a growing number of parents. Indeed, it is privilege, with many parents signing up for waiting lists at the first signs of a baby bump so as to secure a sought-after place. This reality represents a win for multi-functional gender equality by allowing both parents to continue working full-time in an environment where presence and visibility are still tied to promotion. Despite the best efforts of businesses to promote flexible alternatives such as part-time and work-from-home arrangements, employees take advantage of these with caution.

Employers are obligated to provide 52 weeks of maternity leave and many companies, in an effort to be recognised as an “employer of choice”, are offering various forms of paid maternity leave. However, in the majority of cases this is only open to the mother. By making paid maternity leave only available to the mother of the child, society confuses gender equality. Not only is the opportunity of parenting stolen away from fathers, but additional pressure is placed on mothers to take advantage of the leave on offer - shifting a decision away from families and back to the human resources department.

At the conclusion of the mandated maternity leave, a return to the workforce beckons. Some choose the appealing part-time option, which requires a level of financial surety. Others opt to work-from-home despite the silent sneers from colleagues and a promotion-threatening lack of visibility. And there is another group who choose to extricate themselves from the workforce entirely and remain in the role of full-time child-carer. Not only does this decision place financial strain on the household budget as double incomes suddenly become one, but expertise is also threatened as employers equate a multiple year break to a step back in time.

By choosing formal childcare and remaining in the workforce, parents, especially mothers, are able to provide a shining example of multi-tasking and achievement which their own children and women everywhere can aspire to. However, in doing so, they forgo time with their children, assigning trust to the employees of businesses like ABC Learning.