ABC Childcare Crisis – Should Government Jump In?

This is why childcare should not be privatised. ABC Learning has gone into receivership, which has collapsed into a morass of unresolved accounting issues and is more than $1billion in debt.

Receivers of ABC Learning want banks and taxpayers to provide a $60million funding lifeline to keep its childcare centres open until Christmas – but what then?

Natasha Bita has written an excellent piece in The Australian comparing ABC to Starbucks:

Like the US-based coffee company in its search for prime outlets, the Brisbane-born ABC Learning Centres snapped up all the best spots for its global chain of childcare centres.

It filled them with the latest and greatest gizmos for the comfort of its customers, and lured them with a combination of convenience and slick marketing.

Now, just like Starbucks, which had to close 61 of its 84 Australian cafes in July, ABC Learning Centres has grown too big for its own good. The difference is that childcare, unlike coffee, is an essential social service.

ABC Learning own 1 in 5 child care centres in Australia. Should they crash, the parents of 120,000 children who are enrolled there will be without child care, jeopardising jobs and further compromising the fragile economy.

Deputy Prime Minister Julia Gillard said she understood the anxiety of parents but refused to spell out details of any rescue package.

“Our first priority is to make sure that mums and dads that rely on services at ABC Learning are still able to access the childcare that they need,” she said yesterday.

As Ms Bita says, “corporatised childcare was not a problem in principle. But the company should never have been allowed to build such a dominant stake in the market because the effects of failure were so great.”

What could be a great outcome is the government buying up ABC Learning centres and turning them into a wonderful, not-for-profit community. But that would take strong leadership, vision and co-ordination, so I’m not holding my breath.

Meanwhile, I can’t be the only one feeling smug about choosing a not-for-profit centre for my son, despite the “well-loved” toys and long waiting lists. Although I do sincerely hope that ABC Learning is bailed out, and families are unaffected.

Let this be a lesson to the government about monopolisation of essential services.