Childcare in Crisis?

| January 7, 2009
Childcare in Crisis logo

Childcare in Australia is at a turning point as the country enters 2009.

Childcare in Australia is at a turning point as the country enters 2009.

Is childcare a ‘baby-sitting service for working parents' or part of a child's ‘citizenship rights to universal quality care and education services'?  I would argue that it needs to be the latter, but the Australian childcare policy history has so far emphasized the ‘babysitting' approach. 

There are signs of change, with a refocusing on early childhood education policy by the Rudd Government, but there is still a long way to go before all pre-school age children in Australia have access to quality childcare and education services. 

Early childhood is slowly being recognized by the Western world as the critical period for optimal adult outcomes.  ‘Early intervention' has indeed become a government cliché, identifying that children's development is adversely affected when health or relationship difficulties remain unaddressed. 

As a publicly funded service, childcare is well placed to support parents in their parenting role, identify children's developmental or health concerns and link parents to services, as well as providing children with optimal environments to support and extend their learning and well-being.  If ‘early intervention' is to be more than a cliché, it is critical that childcare is recognized as a foundational element of Australia's care and education system, rather than part of the labour market infrastructure supporting working parents.

If childcare is to be in fact recognized as part of a child's right to a quality care and education system, then we need to ask whether publicly listed corporations should be eligible for taxpayer subsidies. Publicly listed corporations carry a duty to shareholders to maximize profits, and this inevitably implies cost-savings to the quality of care provided to children (Rush 2006). We need to be asking whether children should be required to have fewer nappy changes, less qualified staff, poorer quality food to shore up corporate profits, or whether we want not-for-profit services where taxpayer and parent dollars are actually spent on the care provided to children.

As Professor Deborah Brennan (2007) of the Social Policy Research Centre has documented, the modern history of publicly funded childcare in Australia grew from the heady days of the Women's Liberation Movement of the 1970s and community based childcare to corporate dominance by ABC Learning in the 2000s.  Community based childcare centres were initially given government grants to support their establishment, and were governed by community based boards on a not-for-profit basis, with parents' fees subsidized according to their income.   From 1991 private for profit services were also allowed to provide fee-subsidized services.  In 1996 the Howard government removed establishment subsidies for not for profit centres.  In 2000, under Child and Youth Minister Larry Anthony, the basis of Commonwealth subsidies shifted from parent choice of provider, to direct subsidy to the service on the basis of hours of care provided. The number of subsidized hours per week was capped at 50 hours for working parents and 24 hours for families without employment.   Instead of subsidizing parent fees, parents were able to claim an annual tax rebate on child care expenditure.

Childcare in Crisis logoAfter introducing these changes, Minister Anthony lost his seat at the 2004 election and joined the board of directors of ABC Learning well placed to advise the Corporation on maximizing the flow of Commonwealth subsidies to the business.  In simple terms, more places meant more government cash which could in turn be leveraged to acquire more child care centres. These changes paved the way for the emergence of ABC Learning as the dominant corporate child care provider in Australia, and the subsequent spectacular collapse of the business, the multi-million dollar taxpayer bailout, and the closure of centres around Australia.

The collapse of ABC Learning has left many losers in the community aside from those with shares and corporate responsibility. Workers have lost their jobs. Parents have lost access to childcare.  Children have lost familiar communities of care. Employers have lost employees who relied on their childcare. Communities have lost a needed service. Taxpayers have lost millions of dollars.

But there are also gains and opportunities.

The childcare industry sector was in many ways distorted by ABC Learnings' market dominance and aggressive acquisitions policy.  Many small providers were unable to compete with the financial muscle and profile of ABC Learning and sold up or exited the business.  An ever-increasing stream of taxpayer dollars for childcare was being channeled into corporate profits. There was an escalating downward pressure on the quality of care as centres struggled to compete with the ABC juggernaut (Rush 2006). 

The demise of ABC Learning offers opportunities for change to (a) protect and invigorate quality care standards (b) redirect childcare public funds from corporate profit to quality care and education outcomes for children families and communities (c) re-shape the childcare sector to curtail corporate providers and support not for profit community based services  (d) increase staff pay and qualifications and (e) develop the staff skill profile to include family support and early childhood education aspects of long day care services.

Dr Elspeth McInnes, AM BA Hons 1 PhD, is Senior Lecturer and Director of the deLissa Institute of Early Childhood and Family Studies Research Group, University of South Australia.  She is a member of deLissa Institute, Australian Council of Social Services, National Council of Single Mothers and their Children and The Australian Sociological Association.





  1. soality

    January 24, 2009 at 1:40 am

    Come back to earth
    The good Dr Elspeth needs to come back down to earth.  Childcare operators don't live in the clouds where obviously she does.  I have been operating two private LDC centres for the past 12 years now and in the real world things are different to what she dreams it should be.  My services run programs that are designed by parents.  THEY design the outcomes, not what an academic dreams up.  I suggest Dr E works as an assistant in a centre for 12 months to see what the real world is, see struggling parents, see stressed staff and management trying to counsel parents, who generally have very little experience in looking after a child.  I guarantee Dr E doesn't know the basics of childcare.  Does she know a babys sign language, eg to indicate that they are hungry (full fist in the mouth), I suggest she didn't before now, but this is what we teach the parents.  If Dr E really wants to know childcare, I suggest the actually works in the industry, instead of commenting from the sideline, as in a footy game, without knowing any the plays on the field.  I would be happy to emply her as an assistant for 12 months so she could see the real world.  Please vist my site at 

  2. Elspeth McInnes

    February 2, 2009 at 1:05 am


    The previous comment does not appear to relate to the content of my blog, which certainly did not prescribe particular childcare practices, but rather pointed to the need to keep and boost quality outcomes for children, parents and communities.  The reaction is very defensive for some reason.

    Working as an academic in the early childhood education program I visit many students on placement in centres and observe practices.  I have also had three children who have attended childcare and have valued the support I have received as a parent from childcare professionals. 

    Some centres are terrific! Children have responsive carers, they are happy and interested with lots of space and choice of activity in centres which are well managed. In other centres I see children left to scream alone, disengaged staff, cramped space, highly directed and controlled activity and nappies changed on rotation rather than as needed. When childcare providers do not have to answer to publicly listed corporations, they can more easily make decisions which protect the quality of care rather than the size of the bottom line.