Childcare in crisis – did anyone not know?

| January 8, 2009
Childcare in Crisis logo

We need a plan for a universal, high quality childcare program in Australia with supply-side funding provided by government.

Background – there has always been a crisis

In the wake of the collapse of ABC Learning it is worth taking stock. This blog comments on the childcare crisis in Australia and argues the market has failed to deliver. It is time for a change in direction. Childcare in Australia has always been dogged by crisis. Inappropriately funded originally it has struggled to find a proper identity. The childcare act of 1972 suggested the Australian public only needed the service for ‘workforce support'. This conveniently ignored the importance of early care and education experiences for children. It also paved the way to develop services where the work was not respected, too many untrained staff worked in the sector and remuneration was so poor that the numbers of staff leaving early childhood services to work in other areas has been at a crisis point for many years. Regulations were non-existent, or pathetic, when Australia first introduced a quality improvement system and present ratios, especially for babies, are so bad that a recent international visitor (Ron Lally) referred to them as abusive.

Into this already miserable scenario came the market.

The for-profit private sector – Market failure

When the Hawke Labor government extended funding to the private sector there was an outcry that private provision of childcare was an example of market failure. Many thought that quality improvements would suffer if centres were to produce profits. As staff numbers and training are major measures of good quality services and staffing in the community sector cost up to 85% of the budget this was, and is, a valid argument. It is worth noting that ABC Learning had reduced the staff share of centre budgets to almost 50%. At ABC centres staffing was provided at the legal minimum level and therefore the safety net of regulation became the quality standard for practice.  

Whilst the small private providers have received better press that the corporations who floated on the stock exchange an argument can still be made that there are some industries where a profit model cannot be applied and child care is one. Aged care is another if the constant stream of scandals to hit the press is anything to go by. Our services always needed more staff and more highly trained staff, better equipment, playgrounds with real grass and trees, more money for food and daily supplies. At best the private sector was equal with a struggling community sector and then came the Howard government and the market went mad.

Childcare in Crisis logoABC Learning

The story of childcare under the Howard government is a murky one that seems inextricably linked with well-known Liberal party members. ABC Learning was never a successful model as it drove up child care costs and evidence suggests provision was much poorer than in the community and small private provider sectors.


Look at what happened to cost of child care when ABC Learning appeared on the stock exchange. I do not know why people ever thought this was a viable model.

childcare diagram


In 2005 the Australia Institute surveyed childcare centre staff about their perceptions of quality provision within the setting they worked. Corporate childcare centres were reported to have poorer quality care on all aspects of care that were surveyed. What was particularly alarming was that some quality measures were as basic as a question about whether sufficient food was supplied during the day. Why did the taxpayer pay so dearly for this and why did parents support these centres?

Who was listening?

On 8 November Adele Horin published a piece in the Sydney Morning Herald called "Women tolled warning bells but no one wanted to listen".

The crisis now – a box of bandaids to fix a critically wounded service

Where are we now? The Rudd government has provided more tax dollars to temporarily bail out centres that are considered to be non-viable or non-viable under the ABC Learning model. What do we do? Persuade the community providers or local governments to pick up these lemons?

In a few short weeks about 20,000 children and 4000 staff will need to be rescued. The centres themselves were expensive for families, the quality was not proven, the business model seems to have been discredited and Australian families and children deserve better.

Can we fix it?

We poor tax payers probably need to do some more propping up just for short term necessity. However, we should be annoyed that our money was squandered on such a venture and demand more accountability in the future. The present predicament was started by the Hawke government, became ridiculous under the Howard government and the Rudd government, in opposition and in power, has yet to say something that suggests they have any eye to the future.

As it is beginning to happen in the pre-school sector I would like to see a plan for a universal, high quality childcare program in Australia with supply-side funding provided by government. In a comment on the present crisis Frances Press has said:

"In unquestioningly accepting the market as a dominant provider of ECEC we forgo our right to imagine the entitlement for children that exists outside a commercial contract" (Rattler, 2008, Issue 88, p. 24).


Berenice Nyland is a senior lecturer in early childhood. Her doctoral thesis was on infant language experiences in childcare centres and her research interests include infant/ toddler group care, quality education and care, children's music and children's rights. She has taught in universities, TAFE, childcare and kindergarten and has published her research in national and international journals.