Should child care be at mercy of market? International herald Tribune – Business with Reuters – The Global Edition of the New York Times
By Meraiah Foley
November 28, 2008
…. The collapse of the company, which looks after about 120,000 Australian children, or 25 percent of the day care population, has sent the government scrambling to avoid the economic and political fallout of leaving tens of thousands of working parents stranded without child care services.
Critics say the rise and fall of ABC Learning will become a textbook case highlighting the dangers of allowing the private sector to dominate essential services like education, care for the elderly and utilities.
“This is not just an Australian story,” said Deborah Brennan, a social policy expert at the University of New South Wales, who has been studying ABC for the past 18 months.
“It is a story about where a rather blind belief in market forces can get you in the area of community services.”…
Women tolled warning bells but no one wanted to listen Sydney Morning Herald
Adele Horin
November 8, 2008
The women knew. For some time ABC Learning Centres had troubled the child-care experts. The company’s baffling balance sheets did not make sense and the labyrinthine company structures were a worry to them.
But no one took notice of a bunch of female child-care experts with degrees in early childhood education and politics. Critics were dismissed as ideologues and anti-business, and told they were picking on ABC. …
Community operators keen to step into ABC void ABC TV News
Nov 7, 2008
ABC Learning was placed into administration yesterday….
Lynne Wannan, the immediate past convenor of the National Association of Community Based Children’s Services, says it would be “foolish” to let the company return to its previous business model.
“It is extraordinary to imagine that they would ever have been able to see you could return shares to shareholders. So there was no other route for them than to end up like this,” she said.
“To imagine that you are ever going to have millions and billions of dollars t2o return to shareholders and banks based on the revenue that you get from childcare is ludicrous.”
…. “It is not a complex task to manage children’s centres and those community ones that have been operating for 30 to 40 years, they can do it. They manage. That is what they do on a day-to-day basis,” she said…
Receivers to take over ABC Learning The Australian
Nov 5, 2008
ABC Learning, the childcare centre operator that looks after 100,000 Australian infants and toddlers, is today expected to be swept into receivership after months of escalating financial trouble.
THE collapse of ABC Learning is an opportunity for the Rudd Government to rethink the fundamentals of Australian early education and care….
How did we get into this mess? Deputy Prime Minister Julia Gillard has blamed John Howard for “letting the market rip”, but it was the Hawke government, in 1991, that introduced market forces into the sector. It did this by extending child-care assistance to the users of for-profit care and then by changing the structure of Commonwealth funding to encourage private provision and marginalise the community sector.
Labor promised that the market would lead to greater choice and lower fees. It decreed that private businesses, not governments, should determine the location of services, even though huge public subsidies were involved. Under Labor’s system, there was no cap on the number of long day care centres that private operators could set up….
VANCOUVER, May 15 /CNW/ – Low wages are one of the key contributors to the crisis in child care – something the BC government refuses to acknowledge.
Early childhood educators, unable to make a decent living, are being forced out of their field. Employers of all sizes – from group centres to family providers – can’t find or keep staff.
Quality child care promotes healthy development and enables working families to access the labour market. It helps build communities and supports the economy. So addressing child care shortages is in everyone’s interest.
But until the government addresses this serious problem of recruitment and retention, any plans to create child care spaces will not succeed. You still need to staff the spaces. And the inability to find substitutes means what few staff there are do not take their vacation days or sick days, leading to overwork and burnout.
The minister of state for child care thinks doling out last fall’s capital funding grants will create up to 2,200 spaces. But she shouldn’t count these spaces before they’ve hatched – they still need to be built, staffed and stabilized.
The cause of this staffing crisis is inadequate pay. A survey recently conducted by First Call, a BC advocacy group, found qualified child care workers are leaving the field because the low wages and lack of benefits leave them unable to support themselves or a family.
New census data from Statistics Canada shows just how serious the problem is. There is a huge and growing gap between what the average worker in BC earns compared to most child care workers. Average annual earnings for full-time early childhood educators in BC actually fell by 12.3% between the years 2000 and 2005. The person who cares for your children now earns a paltry $20,632.
The job numbers show the effect of these low wages. While the province’s overall workforce grew by 8.7% over the same five-year period, the number of early childhood educators shrank by nearly 3%. This is hardly surprising. Why would someone stay working as an early childhood educator if they couldn’t then financially provide for their own kids?
Without sufficient stable funding, spaces are vulnerable to closure, as we’ve seen happen across BC. A UBC-based network, the Consortium for Health, Intervention, Learning and Development (CHILD), calls this a “fragility” of service.
So what’s the solution? Parent fees are already too high and families cannot be expected to subsidize their child care any further. We need government funding. And yet, government funding per regulated space in BC is down since 2001, according to data collected by the Childcare Resource and Research Unit.
In other provinces, governments have taken measures to address the child care crisis. Manitoba, Saskatchewan and Alberta have all recently announced increased child care wages through wage supplements. Early childhood educators in Alberta will earn up to $20.82 an hour. But here in BC, the government still has no plan to increase wages for early childhood educators.
Other provinces have figured out how to fix the problem. Why can’t BC?
George Heyman, President, BC Government and Service Employees’ Union and Susan Harney, Chairperson, Coalition of Child Care Advocates of BC
CUPE has released a legal opinion suggesting that if the federal and provincial governments don’t act fast, a company called “123 Busy Beavers” might make universal child care an impossibility.
The opinion – by noted trade lawyer Steven Shrybman examines NAFTA rules around public services and foreign investment. Paul Moist, Shrybman, National Child Care Advisory Committee Chair Shellie Bird, and Tracy Freitas, Early Childhood Educator and CUPE 2204 member, released the opinion at a press conference Apr. 1.
Canada has for-profit child care, but it’s mostly delivered by small businesses and individuals. There is little – if any – foreign investment.
That could change though, as a company with ties to Australian child care ABC Learning Centres has been buying up for-profit child care centres in Alberta, BC and Ontario.
And if the amount of for-profit child care delivery grows, and if the amount of foreign investment grows too, Shrybman argues, child care would be considered a commercial venture, rather than a “reserved” public service, under NAFTA.
Any new program – such as the national child care program envisioned in Bill C-303 or even the Ontario government’s plan for full-day kindergarden – could be considered a violation of the rights of the for-profit child care sectors’ investors.
A government that still wanted to proceed with a publicly-delivered child care program would have to pay damages to any foreign company whose profits were affected.
Shrybman argues the only way for the federal and provincial governments to preserve their right to create a public child care program is to use it.
“Once the door is opened to foreign investment in the child care sector, it may be impossible for governments to close it,” he argues.
This opinion builds on a 2004 legal opinion Shrybman produced on the former Liberal government’s plans for a national child care program.
Related articles:
Union report sounds alarm over foreign daycare chains; CUPE warns trade rules could be used to block universal public system TORONTO STAR
By: TONDA MACCHARLES
April 2, 2008
…. A legal opinion prepared for the Canadian Union of Public Employees, … warns there are risks if Ottawa does not limit foreign corporations – like Australia’s ABC Learning Centres Ltd. – from buying up small child-care operators in Alberta, B.C. and Ontario.
International trade lawyer Steven Shrybman says that under NAFTA rules, foreign investors, if they become significant players as daycare providers, would be able to challenge future “public policy” efforts by governments to regulate or expand child care.
… Right now, governments can limit or ban foreign investment in child care and “preserve future policy options,” he said. They can require a child-care centre to hire locally, provide service to a particular region as a condition of its licence, or ensure that parents and members of the local community comprise a majority of the board of directors.
But if federal and provincial governments do not exercise their right to regulate foreign corporations, those companies will be in a position to sue for damages if future government measures “impinge on those investments.” … “the prudent course for provincial governments would be to restrict foreign investment in the child-care sector,” said Shrybman.
“If they fail to do that, the future of child-care services in Canada may well be determined not by communities or by governments, but by private tribunals meeting behind closed-door meetings in proceedings at World Bank headquarters in Washington, because that’s where these disputes will be resolved.”….
NOT FOR SALE: PROMOTING PUBLIC SOLUTIONS IN TODAY’S ALBERTA Vue Weekly – Edmonton
SHANNON PHILLIPS
…. Privatization, says Moore-Kilgannon, is the “common thread at the root of so many problems …. Consistent through all these sectors is that they are under constant pressure—waiting lists, cutbacks, poorer quality of services.”
Moore-Kilgannon explains that privatization is part of a familiar cycle: governments reduce spending on public services, sometimes dramatically. The public sees a downturn in services, and demands change. The private sector—often massive multinational corporations—steps in to offer solutions. Those solutions are sold to the public as cheaper and more efficient.even though Moore-Kilgannon says the evidence most often shows they are neither.
Research has shown privatized health, child care and seniors’ services to be more expensive—both to individuals and to governments. A layer of profits has to be skimmed off the service for it to be a viable business venture, and those profits come from either cutting back on wages or quality or by raising fees.
Australian social policy researcher Deb Brennan, an expert on child care, says all of that and more has happened in her country…ABC built their business model upon government subsidies.
Australia used to fund child care as many other developed countries do: giving direct subsidies to non-profit and community-run centres. Now, they simply cut a cheque to parents, who are then able to “choose” the child care services they like best.
Non-profit centres have since all but disappeared, bought up by ABC and other for-profit ventures. Fees have gone up and wages for workers have stagnated. … Last year, ABC received $150 million (CAD) of taxpayers’ money.
Australia elected a new, more left-leaning federal government last fall, but Brennan says it’s made precious little difference in the government’s approach to child care.
“They’ve just announced the government will now cover 50 per cent of child care fees. That’s just an open invitation to for-profit operators to raise fees.”
Brennan says there are no rules constraining how much child care operators can charge. “It’s part of the philosophy of letting the market decide. But the quality and standards are very mixed for the cost.”
… She says Canadians need to take a hard look at market-based models, “to find out whether this model actually delivers high quality early learning and care services. In Australia, it doesn’t.”
…Just six months ago, a division of ABC bought 11 child care centres in Alberta, as the province has boosted Australia-style subsidies for parents. Called Busy Beaver Learning Centres, the ABC subsidiary had also been looking for more opportunities in BC and Ontario….
An education business in China has touted the name of Brisbane-based ABC Learning Centres to promote a bilingual “5-star” kindergarten venture – despite the childcare giant denying knowledge of the plan.
The proclamation came in an error-riddled online announcement from American TPR English School. The announcement was pulled following Courier-Mail queries and a Chinese news article.
“The (Chinese) claims are false and we are investigating,” ABC said.
The news comes weeks after a rapidly expanding ABC rejected claims of having operations outside Australia, New Zealand, the US and UK – and of being behind the Australian-backed 123 Global businesses….
The developments came after Canadian politicians and media claimed ABC was behind 123’s recent establishment of operations in the North American nation.
ABC and 123 rejected this and maintained they are separate businesses, although they have a series of ties for ventures including staff recruitment and centre acquisition….
ABC Acquisitions is now 123 Global. ABC Learning previously rejected Citigroup analyst doubts about ties between Learning and Acquisitions.
TPR highlighted links between Learning and Acquisitions but confused issues such as ownership….
Mr Jones, also a director of 123 Global Holdings (China), said a reference in the article to 123 being an ABC “subsidiary” was wrong.
Tom Mould, another 123 Global Holdings (China) director, was photographed signing the memorandum.
He is also listed as company secretary of Independent Colleges Australia, a non-profit schooling entity which has ABC executives Le Neve Groves and Martin Kemp on its board….
…. Chief executive Tim Boyle said the firm had good growth prospects for 2007/08.
“We’ve got a very strong corporate pipe and also we’ve got some strong prospects for property in the back end of 2008,” he said….
Austock’s property investment management business has surged in the past two years from just over $100 million to $675 million in funds under management at June 30 2007.
Much of that growth was driven by its management of property trusts leasing hundreds of childcare centres to the fast-growing ABC Learning Centres Ltd.
The childcare provider is now aiming at the US market ….
Straight Goods
by Ginette Petitpas-Taylor [Ginette Petitpas-Taylor, of Moncton, is Chairperson of the New Brunswick Advisory Council on the Status of Women.]
EXCERPT
It sounds like a joke, but some people are getting extremely rich providing child care services.
To New Brunswickers who have ever purchased or provided childcare — even those who have owned one of this province’s many for-profit daycares — that sounds incredible, even suspicious. How could you ever make a real profit, let alone get rich?
[If for-profit services to children made sense, we would let businesses organize our education system.]
How large corporations are doing it is by cutting costs and (according to some studies) cutting corners, and by subsidy milking — concentrating on regions where governments provide subsidies.
Many governments have immunized themselves against the practice. They say children’s interests don’t mix with profit making and so, they limit expansion of childcare services to the non-profit sector.
After all, if for-profit services to children made sense, we would let businesses organize our education system.
Apart from “How can you make a profit in that business?”, the more important question for a community and a government to answer is: “Do we want child care services whose first priority is to the shareholder, not the child?”
CHILDCARE giant ABC Learning Centres had tender processes questioned at a meeting where it talked up Labor’s federal election win and the possibility of a Democrat taking the White House….
Shareholder Jit Mau queried $74 million in untendered work given in fiscal 2006 to a maintenance and renovation company run by Mr Groves’ brother-in-law….
Mr Zullo and Mr Groves have co-invested in outside business. Land documents also show they bought and resold property to each other.
QMS’s work had been reported as a “related-party” transaction for years but ABC stopped publishing such details this year after realising there was no obligation to do so under revised accounting standards….
Mr Mau told Mr Groves to “take a cold shower, have a look at yourself in the mirror and ask yourself have you done the right thing”….
(Bloomberg) — ABC Learning Centres Ltd., the world’s biggest publicly traded owner of child-care centers, cut its profit forecast for 2008 because a rise in the Australian dollar reduced the value of sales abroad….
ABC in August posted an 88 percent gain in second-half net income to A$81.5 million for the six months ended June 30. The company, which gets about 45 percent of sales overseas, spent more than $700 million last year buying child-care centers in the U.S., Australia, New Zealand and the U.K. to tap rising demand for daycare services….
A TOP executive at childcare giant ABC Learning Centres established a private staff-recruitment business that later won exclusive contracts with the stockmarket-listed company.
The executive was listed as the business’s sole director when the contracts are understood to have been won, although documents filed later said another businessman had actually been in charge.
Brisbane-based ABC maintains the organisation is separate but it marks the latest case involving outside companies that do not appear on ABC’s accounts….
ABC Acquisitions’ sole director is Donald Jones, who like ABC Learning, has said the outfit is an independent operation. Mr Jones is also executive director of 123 Busy Beavers, which recently started trading in Canada.
Company documents show 123 Careers, which Mr Jones now solely owns, was created in April 2005 – the director was listed as Jillian Reynolds, ABC’s chief operating officer.
On March 23, 2006, Ms Reynolds was recorded as signing company documents again naming herself as director.
But in mid-2006, Mr Jones signed documents saying he had actually been the sole director since April 2005 and shareholder since December 2005.
The timing is important because it is believed that in February 2006 ABC sent a memo to casual centre staff saying 123 Careers (under its previous name Childcare Services Recruitment) had won a contract beginning in April that year.
Staff who wanted “to continue working” as a relief worker had to transfer employment to 123 Careers.
ABC chief executive officer Eddy Groves confirmed an exclusive arrangement, could not verify the contract’s exact months, but said 123 Careers was not a related party….
He said Ms Reynolds – who has not responded to interview requests – had been “proactive” in setting up the company, only later seeking ABC approval.
“We said that wouldn’t work because she would be a related party transaction, so she let that go and transferred it to Don (Jones),” Mr Groves said.
ABC also said it did not want to run a recruitment business because it was focused on childcare, he said.
Asked about the directorship and shareholding changes recorded in mid-2006, he said: “They were slack on the paperwork.”…
Mr Groves said Mr Jones was running the operation “from the get-go”.
Mr Jones, meanwhile, would not be interviewed, but wrote that 123 companies were private businesses.
Professor Natalie Gallery of Queensland University of Technology’s School of Accountancy said, generally speaking, any transactions with key executives in 2006 should appear as a related-party transaction.
The 123 Careers 2006 return shows a $1.3 million loss in fiscal 2006 off revenues of $25.5 million.
Including a $27.3 million intangible “right of children supply” asset, it had a shortfall in net assets of $1.3 million.
The auditor signed off the accounts stating: “The entity’s ability to continue operations and meet its debts as and when they fall due is dependent on financial support pledged by the sole director Donald Vivian Jones”.
SUSAN Elson thought the childcare meeting with Australians in Canada had odd moments.
“They did not have business cards. They did not have brochures. They did not have anything,” recalls Elson, who has been involved in accrediting child care in Canada.
The June meeting in a small Edmonton conference room was just one precursor to the start of Canadian operations in recent weeks for Australian-backed childcare group 123 Busy Beavers Learning Centres.
It was a quiet beginning to a firestorm about Busy Beavers’ links to Brisbane-based ABC Learning Centres.
Now ABC – whose rapid expansion to over 2200 centres in Australia, NZ, the US and the UK has raised questions – has denied moving on Canada.
Stockmarket-listed ABC also maintains Busy Beavers and other 123 companies are separate, independent entities. That means ABC has no control over operational decisions, and the businesses themselves do not appear on ABC’s accounts.
That hasn’t convinced some Canadian politicians or media, who published views that ABC was behind the push.
The Canadian reception has been hostile, with headlines blaring multinational “big box” child care is set to arrive. Organisations such as the Canadian Union of Public Employees are sounding concerns about quality at profit-run child care.
Elson, an exponent of non-profit community care, is another who is sceptical of ABC’s distancing itself from Busy Beavers.
“I’m not an idiot, it becomes clear,” she says.
ABC, which last week blamed the strong Australian dollar for a profit downgrade, already had Canadian links.
The parents of Eddy Groves, who co-founded ABC with wife Le Neve, were Canadians and he retains Canadian citizenship.
Asked in 2005 by The Toronto Star about setting up in Canada, Groves said: “What a great excuse to go back to that beautiful country.”
He downplays any move now.
“They (Canadian media) think they’ve joined the dots,” he says. “People over there have tried to emphasise their cause of not-for-profit by using me as a whipping boy to try and get their point up.”
But, as revealed in The Courier-Mail last month, ABC in August set up a company called ABC Canadian Holdings.
“We contemplated (a move) but we chose not to do it . . . we thought we should concentrate on the US,” Groves says.
The corporate origins of Busy Beavers – whose mascot is a Canadian shirt-wearing beaver – stretch back only weeks earlier to incorporation in Vancouver on July 17.
The sole director was Graeme Wilkie. Busy Beavers later also listed Don Jones as executive director.
Both men, along with Paul Graham, are directors and sole shareholders of Busy Beavers Investments Pty Ltd.
Busy Beavers Investments’ address in Brisbane’s industrial suburb of Murarrie is the same as some ABC facilities. It was also once ABC’s registered office.
Gold Coast-based Jones declined to be interviewed. But in an email he wrote Canadian media speculation was mostly “inaccurate, biased . . . instigated by vested interests”.
Jones says he has checked child care opportunities globally over a decade and sees a shortage.
“We see opportunities in Canada as it appears to be on par with Australia 15 years ago in many aspects.
“We see an opportunity to provide the families of Canada choice, improved safety and educational standard.”
Jones maintained Busy Beavers had “no links” to ABC.
Before Canada, Jones’s ABC ties were already known.
Citigroup analysts last year pointed out he was a director of ABC Acquisitions, which co-ordinates Australian centre developers and sellers for ABC Learning.
While then based at the same address as ABC Learning headquarters, Acquisitions was designated a separate entity. It listed two shareholders – Mr Jones and a Heather Jones.
Citigroup said they believed the “arm’s-length arrangement” with Acquisitions was to enable a child care licence “to be categorised as an asset” on ABC Learning’s balance sheet.
But ABC Learning, whose accounts Groves describes as transparent but which have raised eyebrows from some watchers, rejected that claim.
The relationship strengthened on February 14 this year when ABC Learning provided a mortgage-secured and registered $50 million loan to Acquisitions.
Groves says this was provided (and was not the first such deal) because ABC Learning needs many centres built but developers require funding.
“They (developers) go and get individual funding from banks and then they need equity to support that funding, so that’s the money that we help them get through with,” he says.
It is among assets in ABC’s balance sheet, he says.
Acquisitions in July changed its name to 123 Global to “reflect the truly global nature” of operations with clients including Canada’s Busy Beavers.
The Busy Beavers move sparked several theories.
One is Busy Beavers was working for ABC – rejected by both parties – to get centres cheaper as ABC’s presence would boost prices.
Another is Busy Beavers hopes to get a foothold and later sell to ABC. A third is Busy Beavers just sees an opportunity.
Some question whether Jones’s move with Busy Beavers would imperil lucrative Australian ABC ties.
Groves rejects this. “He’s not competing with us,” Groves says.
The ties between organisations extends to Busy Beavers’ national operations manager Marnie Testa, who left a similar role at ABC last year.
Canada’s Elson says Testa was among two Australians and an American she met at that first June meeting at 5pm.
“They were very familiar with (US and Australian) accreditation processes,” she says.
Elson says they were initially introduced as from Texas-based Adroit Investments, which has been making overtures about buying Canadian child care facilities.
Elson, who readily admits she might be judgmental against for-profit operators, says they “gave very short, abbreviated answers” about issues involving quality care and stockholders.
A second meeting in September was just with Testa, who Elson says elaborated on the upcoming Busy Beavers website.
Elson says she had an inkling by then of an ABC link and so asked how many children were at Australia’s ABC centres.
The response was “very brief”, Elson claims.
“(When) we asked for elaboration it was dismissed.”
Child care company ABC Learning Centres Ltd has downgraded its earnings guidance for the full year, surprising investors who sent its shares down by almost five per cent.
ABC says its earnings per share (EPS) is now expected to grow by 15 per cent or more this financial year, down from an earlier forecast of growth of more than 20 per cent.
The downgrade comes as a strong Australian dollar exchange rate impacts earnings from its offshore business reporting in US dollars, pound sterling and NZ dollars.
It added that accounting treatment of other items could also impact earnings.
“Owing to the above factors, management believes that EPS growth will be 15 per cent or greater for the 2007/08 financial year,” it said.
ABC shares fell 28 cents, or 4.87 per cent, to $5.47….
“ABC confirms that its operations in Australia, New Zealand, the United States and United Kingdom are all trading to expectations in constant currency terms for the 2007/08 financial year,” it said.
ABC also said it was continuing with its program of non-material acquisitions of childcare centres.
In the meantime, the value of its 17.99 per cent investment in toy company Funtastic Ltd was declining as the share price fell.
“At 30 June … this resulted in a gain of $7 million with Funtastic’s share price at $1.85,” ABC said.
“Subsequent share price fluctuations below $1.85 will have an impact on earnings.”
ABC in August reported a net profit of $143.10 million for 2006/07, up 76 per cent on the previous year….
Legislation from the NDP will attempt to block foreign-owned big-box day care from setting up in Canada, and will push for a nation-wide framework to regulate federal funding for the industry.
The private member’s bill will be debated in the House of Commons today.
The opposition parties have united in support of Bill C-303, the Early Learning and Child Care Act, which sets out terms for “accessible, universal and high-quality early-learning and child-care programs and services.” However, the Conservatives have vowed not to pass it into law.
The legislation would also regulate how federal funds are transferred to provinces or groups in support of child care, and protect private, for-profit day-care centres from foreign takeover, according to its supporters.
It comes as the debate over so-called big-box day care heats up amid attempts by a massive Australian child-care provider to bring its business model to Canada…
Chow told CTV’s Canada AM that research in Australia has shown the $2.2-billion company charges higher user fees and provides lower quality of services.
“Our research shows that initially, the prices for the parents are low, and then after a while, once they have the domination of the certain area, then the fees goes up,” Chow said.
She said the bill to be debated today would establish a national legislative framwork “for a universally-available, high-quality, affordable child care system across Canada.”
Such a system, she said, would allow working families to continue to work, could help free single mothers from a cycle of poverty and address child poverty by ensuring they eat quality meals, something that could also stimulate learning.
“So it’s time that Canada have a national child-care legislation so that we can embed and enshrine the legislation into the House of Commons as a law just like the Canada Health Act,” Chow said.
Support for 123
Kathy Graham, of the Association of Daycare Operators of Ontario, said the debate over large-scale day-care operations is not black and white.
Even the term “big-box day care,” she told Canada AM, has been used as a scare tactic.
“I think that’s been a phrase that has been coined to scare families, to scare Canadians, when in fact 123 Busy Beavers, if we’re going to dwell on them, are actually purchasing private entrepreneur centres that are, in general, 60-space day cares, 64-space day cares, 24-space day cares,” she said.
“If we want to talk about Wal-Mart, this is by no means a comparison.”
Bill C-303, she said, seems designed to “get rid of the private entrepreneur who has gone out and created programs,” and could eventually mean less flexibility and accessibility for parents, especially in rural and remote areas where private day care has filled the gap,” Graham said.
“We all need to be partners in this, and excluding parent options and decreasing accessibility is clearly not something that we should be wanting to do in this country,” she added.
CHILD-CARE centres in six NSW country towns and one in Sydney – once linked to the corporate giant ABC Learning Centres – will close next Friday, resulting in the loss of hundreds of child-care places.
Most of the centres are the only one in town, with parents having no other immediate child-care options.
Parents and staff were given less than a month’s notice of the closures, leaving many shocked and angry. But the company that now operates them says the centres are not viable.
The closures affect the towns of Harden…. and Prairiewood, in south-west Sydney.
All the centres are owned by …Queensland-based company Child Care Providers, which bought the licences from ABC Learning about 18 months ago. In at least three cases, ABC still owns the premises.
“Seven centres being closed at the one time is out of the ordinary,” said John Tansey, executive director of children’s services at the NSW Department of Community Services.
The chief executive officer of Child Care Providers, Viryan Collins-Rubie, is a business partner and old friend of Eddy Groves, the chief executive of ABC Learning.
They are owners, with Mr Groves’s sister, Patricia, and another man, of a company called Deane and Davis Fine Jewellers.
A spokesman for ABC Learning said Mr Groves had known Ms Collins-Rubie for many years and they had planned a business venture together in the past that had not worked out.
Asked if there was an arrangement for Child Care Providers to buy unprofitable rural centres from ABC in order to close them down, and deflect odium away from ABC, the spokesman said: “The only financial arrangement existing between ABC and Child Care Providers is as landlord/tenant.”
He said ABC had in the past been forced to close centres because of a lack of demand….
The Greens MP John Kaye, who has been contacted by concerned community leaders, said: “The dealings between the mysterious Child Care Providers Pty Ltd and ABC Learning need to be fully examined. This is not just another corporate high finance deal. It directly affects the future of many vulnerable young people.”
When called about the closures, the general manager of Child Care Providers, Rebecca Gunn, at first said she had “no comment” and hung up.
In a later response to an email, Ms Gunn said the centres were not viable due to low occupancy, rising costs and difficulty in obtaining qualified staff.
“It has left us with no choice but to make this unfortunate decision.We apologise for the inconvenience and stress that this decision has caused the families and staff at our centres.”
At the time the centres were bought from ABC, the company had believed they provided a good business opportunity, she said.
Ms Gunn said Ms Collins-Rubie was an employee, …. of Child Care Providers, which operates 39 centres. The sole director, according to company documents, is Stanislaus Kevin Smith, who is not known in the child-care industry.
Secrecy surrounding the closures has frustrated local councils and business people interested in possibly taking over the licences….
“I asked for the name of a human being I could deal with about the building but they were not prepared to divulge that and indicated there would be all sorts of difficulties in trying to rent [it].”
ABC said it did not own the Coolamon premises, despite “town rumours”.
Ms Miller said the $36,000 rent ABC charged for the Harden premises was “huge” for the town, being about the equivalent of rent charged for a major industrial site….
Anna Madden said people understood the centre was a business that needed to make a profit but “we need information from the company so we can try to start again.”
Friday, Nov. 16, 2007
7:00 – 9:30 pm
SFU Harbour Centre, 515 W. Hastings Street, Vancouver
BC child care is in crisis:
Fees are sky high
Early childhood educators are leaving in droves
Wait lists are years long
Government is responsible for this crisis. They dismissed parents’ concerns, ignored research, and squandered resources.
Now they are using the crisis as an excuse to lay out the welcome mat for foreign-based corporations that are trying to buy up community-based child care across the province.
But, using public money to attract multinational corporations whose goal is to make profits for their shareholders is NOT the solution for child care in BC.
On Nov. 16, join the Coalition of Child Care Advocates of BC to say NO to corporate child care and YES to community-owned child care in BC.
Learn how community controlled child care is our best defense against foreign take over.
Work with us for real child care solutions that put public resources into children, families and communities – not into the pockets of multinationals and their shareholders who don’t care about BC kids.
VANCOUVER /CNW Telbec/ – With the Campbell Liberals refusing to stop the spread of big box child care across British Columbia, parents and child care activists are looking for action.
Australian multinational child care corporation ABC Learning is seeking to expand into Canada by purchasing child care centres, starting in British Columbia, Ontario and Alberta.
CUPE President Paul Moist and NDP child care critic Olivia Chow will hold a news conference calling on the federal and provincial governments to stop moving down this dangerous path and support a national not-for-profit child care program.
Bill C-303, the NDP’s Early Learning and Child Care Act, would provide significant protection against this foreign takeover by ensuring that federal child care investments support only high quality, affordable, not-for-profit child care in Canada. The bill goes to third reading on November 20th.
Despite concerns about a foreign corporation attempting to buy community child care providers across British Columbia, so far there has been no news of such purchasing offers from local child care providers in Prince Rupert.
It was announced recently by the Coalition of Child Care Advocates of B.C. that ABC Learning Centres of Australia and their corporate partner 123-Global have been making purchasing offers across B.C., as well as in Alberta and Ontario. Coalition representative Rita Chudnovsky said that buyout letters began going to community-based for-profit child care providers in B.C. just two weeks before the B.C. government announced a $12.5 million capital fund to create new child care spaces, available to for-profit operations.
“B.C. child care is not for sale and taxpayers should not be subsidizing the buy-out of community-based child care centres or the profits of a foreign-based multinational corporation,” said Chudnovsky. “Public money should be used to expand non-profit quality child care centres, not see B.C. child care turned into a foreign-owned, big-box warehouse business.”
As of last week, none of the Prince Rupert child care facilities contacted by The Daily News had received letters regarding the possibility of being purchased, while some were not even aware of the issue. The general consensus among local child care providers was one of concern about the possibility of a foreign-based corporation possibly headed into Prince Rupert.
“The timing of the announcement seems ironic with our community starting to discuss child care within our schools,” said Tina Last, who operates a family daycare service in Prince Rupert. “I don’t really know if I need to be alarmed, or if this is just something that happens in bigger communities. I worry that if a community does go in the direction of having daycares in every school, whether that will open the door more to companies like that who could bid to open centres in schools.”
The majority of child care centres in Prince Rupert are non-profit providers….
“It’s not very likely that somebody would be looking at Prince Rupert, unless they were going to just start up a new one,” said Judy Riddell of Berry Patch Child Care Resource and Referral Centre. “The thing is they can apply for the capital grants now due to a change the provincial government has made.”
Riddell said that whether a new private for-profit child care centre would be a positive or negative thing for Prince Rupert depends on a person’s view of free enterprise, but said looking after children is such an important job that whoever is responsible, they need to be doing a good job. ….
“Our understanding is letters have gone out to child care providers in a number of communities in the province, not just the Lower Mainland,” said Chudnovsky. “We’re still very concerned about it. The threat posed by foreign multinationals has not gone away, and we don’t have any assurance from the provincial government that they are equally concerned or doing anything to make sure child care stays in the community’s hands.”
The Coalition of Child Care Advocates believes the government needs to first recognize the concern about the issue, and assure families that this is not their vision or plan for child care. The coalition also wants the province to assure taxpayers that public money will not facilitate a take-over of B.C.-owned providers, or subsidize profits resulting from the sale of those centres to a foreign-based corporation. Lastly, Chudnovsky says the coalition would like to see the government acknowledge the long-standing crisis in child care is a result of their own “lack of good policy and lack of adequate funding.”
“We’re continuing to raise the issue in communities, and communities continue to recognize it as an issue because British Columbians deserve a response.”
INCREASING payments to parents to cover the expense of child care will only drive up costs and do nothing to improve the quality of care children receive, a new book says.
While boosting the child-care rebate will give parents immediate relief from climbing fees, the book by a team of academics says it will not help the other big problem – accessibility.
“The work in Australia and internationally is that the emphasis needs to be on quality not just cost,” a Sydney University economist and one of the book’s authors, Elizabeth Hill, said.
Labor stole the Coalition’s thunder on child-care policy early in the campaign by announcing it would increase the child-care rebate …. But Dr Hill said although increases in the child-care rebate would be welcomed in the short term, they would only compound problems of accessibility and affordability in the future.
“It’s effectively a subsidy for industry and for parents. My concern is that what’s good in the short term is negative in the long term. It does nothing to improve the quality of the service because there’s still tight supply,” she said.
Sydney University will release the book today.
The authors argue that Australia’s child-care system has been developed as a prop for the labour market rather than with children’s development and educational needs in mind.
Because of this, the authors argue, Australia lags much of the developed world in providing universal, high-quality care for children who are not yet old enough to attend school.
They also criticise the dominance of private child-care providers, such as ABC Learning.
