<html><span style="font-weight: bold;"></span><span style="font-weight: bold;"><br></span><hr style="width: 100%; height: 2px;"><h1><span style="font-weight: bold;">TIMELINE:</span></h1><br style="font-weight: bold;"><span style="font-weight: bold;">Growth </span><br>1988 <br>2001 43 centres<br>Nov 2005 697 centres (Aus & NZ)<br>Mar 2008 950 centres ( forcast Aust & NZ)<br>2300 childcare centres with $2 billion of borrowing.<br><span style="font-weight: bold;">Profits<br><br></span> FY2004/5 recording net profit after tax of $52.3 million on total revenues of $292.7 million. <br><span style="font-weight: bold;">The six months ending 31 December 2005 </span>showed
no slowing in the financial momentum for the company with profit after
tax reaching $38 million and revenues of $219.8 million.
ABC Learning received $128 million of its revenue from government
subsidies in the last financial year.<br><span style="font-weight: bold;"><br></span><br><br><span style="font-weight: bold;">Expansion:<br></span>In 2001 he floated it on the
stock market. At that stage he owned 31 childcare centres in South East
Queensland. Now, just three years later, he’s got 750 right across
Australia.<br><span style="font-weight: bold;"><br></span><span style="font-weight: bold;">On December 13, 2006 i</span>t was
announced that ABC would acquire the second largest child care provider
in the United States, Chicago based La Petite Academy for 330 million
US Dollars as well as the 5th largest provider in the UK, Busy Bees
Group, Ltd. With these acquisitions they are expanding into the UK
market and increasing their market share in the US to 1%<br><br> a recent presentation to sharemarket investors Mr Groves said ABC was
on target to increase the number of its centres in Australia and New
Zealand from 660 in the middle of last year to 850 by the end of June.
The company has more than tripled the number of its centres in three
years.<br><br>ABC News 9/9/04:Alan Kohler: Most of the action on the share market today was in the
childcare business. The three biggest listed operators of crèches, ABC
Learning Centres, Childcare Centres of Australia and Peppercorn
Management, announced a three-way merger with ABC on top<br><br>Source: <a target="_blank" title="External link to http://www.theaustralian.news.com.au/story/0,25197,23288077-20142,00.html" href="http://www.theaustralian.news.com.au/story/0,25197,23288077-20142,00.html" class="externalLink">Childcare business spoonfed : The Australian</a><br>
n June last year, ABC reported owning 1188 centres across Australia and
New Zealand and 35 owned and 12 managed nurseries in Britain. In recent
months it has expanded its interests in the US and now owns 1015
centres to become that country's second-biggest provider. While figures
are hard to pin down, ABC's estimated control of the overall market in
Australia ranges between 20 and 30 per cent across the board, and in
some regions such as Victoria is understood to be even higher.<br><br>
It has snapped up three rival sharemarket-listed
child-care operators since late-2003, and in November last year spent
$218 million buying the third-largest operator in the US, the Learning
Care Group.<br style="text-decoration: underline;"><hr style="width: 100%; height: 2px; text-decoration: underline;"><span style="text-decoration: underline;">An unexpected drop of 42 per cent in profit in the second half of
2007 to $37.1 million and adverse market rumors about its $1.8 billion
debt triggered a decline in the company's share price. Several
directors of the company were then forced to dump millions of shares
after receiving <a href="http://en.wikipedia.org/wiki/Margin_call" class="mw-redirect" title="Margin call">margin calls</a>. The combined effects caused the share price to plummet 43% to $2.15 after trading as low as $0.15. <sup id="_ref-5" class="reference"><a href="http://en.wikipedia.org/wiki/ABC_Learning#_note-5" title="">[6]</a><br><br><br><br></sup></span><h1><span style="text-decoration: underline;"><sup id="_ref-5" class="reference">Financial coallpse</sup></span></h1>The recent history of Child Care Centres Australia provides a salutary
insight. Caroline Fewster is an Associate Professor in Early Childhood
at Bond University on the Gold Coast. She was also a board member of
Child Care Centres Australia, a board that was chaired by Liberal party
figure, Andrew Peacock.<br>
<br>
CCCA was heading down a similar path to
ABC Learning Centres. It had floated on the stockmarket with the help
of Andrew Peacock’s son-in-law and prominent Liberal, Michael Kroger.
The company was rapidly expanding when it acquired 41 centres in
Western Australia.<br>
<br>
The company hadn’t done its sums properly
though, overestimating its profits by almost 90%. The whole thing went
belly-up and shares were suspended from trading.<br><br><br>
ABC Learning's half-year earnings have dropped by 42 per cent to
$37.1 million, prompting investor concerns about the company's debt
structure.<br>
<br>
At one stage today, shares dropped 70 per cent to touch a six-year low of $1.15, but have closed at $2.14.<br>
<br>
The company, which has been in a massive expansion phase in the past
two years, has a negative balance of hard physical assets to intangible
assets to the tune of $1.75 per share.<br>
<br>
The company also has $1.2 billion of debt repayable in three years, and $600 million of convertible notes on a nine-year term.<br>
<br><hr style="width: 100%; height: 2px;"><br><h1><span style="text-decoration: underline;"></span></h1><h1><span style="text-decoration: underline;"><sup id="_ref-5" class="reference">ABC SHARE COLLAPSE</sup></span></h1><h1><span style="text-decoration: underline;"></span></h1>After amassing a $270 million personal fortune by the age of 40,
Eddy Groves lost $45 million in just two hours on Tuesday morning.<br>
Sadly for them, Eddy can be a hard man to track down. His preferred mode of transport is a private Citation <a tiddlylink="CJ3" refresh="link" class="tiddlyLink tiddlyLinkNonExisting" title="The tiddler 'CJ3' doesn't yet exist" href="javascript:;">CJ3</a> jet, which means he can whip in and out of Australia's airports at will.<br><span style="text-decoration: underline;"><sup id="_ref-5" class="reference"><br></sup></span><hr style="width: 100%; height: 2px;"><h1><span style="text-decoration: underline;"></span><span style="text-decoration: underline;"><sup id="_ref-5" class="reference">ISSUES</sup></span></h1><span style="font-weight: bold;">1998</span><br>Lyn Wannan is the Convenor of the National Association of Community Centres.<br>
Lyn Wannan: I mean we know right now that Government policy is for no
growth in the community-based sector and for still some considerable
growth in the private sector. My view is that we need to retain a
community service sector, a non-profit community-owned sector. I think
that has to be a priority of government. I fear the loss of it
altogether. It has been the community-based sector which has fought
hard for the quality standards and regulations, and it has been the
community-based sector which has actually set the price in the past.<br>The push for regulations at that time was led by pre-school
associations, worried about the standard of informal care. Today an
estimated 180,000 children under the age of five are being looked after
in home-based, informal care. These are the everyday babysitting
arrangements made between families and friends, as well as the
money-making neighbourhood ventures. But not to be confused with Family
Day Care, which is a government-funded and licensed home-based scheme.<br><br><h1><span style="text-decoration: underline;"></span></h1><span style="font-weight: bold; text-decoration: underline;"></span>Gerald Tooth: The once cottage industry of childcare, run by
not-for-profit organisations and small private operators, is being
rapidly corporatised. That is, large stock market listed companies have
flooded into the sector which they see as a goldmine of profit
opportunity. It might be good news for you, if you’re an investor, but
is it good news for you and your children if you’re a parent?<br><br><br>There are around four-and-a-half-thousand day care centres across
Australia. Traditionally the sector was dominated by small-scale
operators, community run not-for-profit organisations and small
privately-run centres.<br><br>But in 1997 the Howard Government
scrapped direct subsidies to not-for-profit childcare centres and in a
single stroke, childcare was changed. Where around 40% of government
funding had gone directly to centres, now all of it went to parents
through Child Care Benefit payments, that they pass on to the centre of
their choice. With access to a new funding stream, private centres
boomed and with the not-for-profits decimated, childcare was opened up
as a lucrative field for profit making.<br><br>Seven years later, the
government has more than doubled its childcare spend and the childcare
sector is now seen as an industry, a multi-billion dollars industry.
And it’s the new corporate players that dominate, with their
shareholder backing, management systems and economies of scale. And
it’s all happened in the mere blink of an eye.<br>
<br>
ABC Learning
Centres led the way as the first to list on the Stock Exchange just
three years ago in 2001. Others quickly followed: Child Care Centres
Australia, <a tiddlylink="FutureOne" refresh="link" class="tiddlyLink tiddlyLinkNonExisting" title="The tiddler 'FutureOne' doesn't yet exist" href="javascript:;">FutureOne</a>, Peppercorn Management Group and Hutchison’s Childcare services,<br>
<br>
With
the recent merger of ABC Learning Centres, Peppercorn and Child Care
Centres Australia, Eddy Groves’ company will now control 750 centres.
And as he said earlier, he reckons the company will soon be worth a
billion dollars.<br><br>Pam Cahir of Early Childhood Australia.<br>
<br>
Pam Cahir: What’s
happening in childcare services is happening in all childcare services
right now, that is, you can’t get staff, you certainly can’t get
qualified staff, you can get casual staff, the turnover of staff is
enormous, and there are major issues around the training of staff that
we’re getting. And staff are poorly paid, the conditions are awful,
there is no career path in the sector, and so there are a lot of
fundamentals to get right before you start worrying about who’s
actually providing the care. In my view now, I don’t think it’s
appropriate or OK for parents to go to work on the back of the wages of
poorly paid staff in childcare services, I don’t think it’s OK for
services to have ratios of one to five for babies. I mean I can’t
imagine looking after five babies, I just think that’s just an
impossible task, and if you had quadruplets in this country you’d get
support. So there are some quite fundamental things that you have to
get right in order for us to actually set this sector OK.<br><br>Childcare workers are currently battling in the Industrial Relations
Courts in Victoria, South Australia and the ACT for wage rises. The
childcare entrepreneurs are opposing them.<br>
If low wages are one pillar of the childcare business, government funding is the other.<br><br>As the use of childcare has skyrocketed in Australia, 80% of the
country’s four-year-olds are now spending some time in some form of
care each week, and she asks, do we want that care to be run by
well-trained professionals who can properly guide a child’s development
at that critical time.<br>
<br>
For example, the ratio of carers to children in babies’ rooms in New
South Wales is one to five. In Queensland it’s one to four. Group
leaders in Queensland must be two-year trained, in New South Wales,
three year trained.<br><br>oy Goodfellow is an early childhood expert at Macquarie University. She
recently wrote a paper titled ‘Is the marketplace influencing our view
of the child?’ which focused on the shift in who is seen as ‘the
consumer’ of childcare services. Once it was the child, now apparently,
it’s the parent.<br>
<br>
Joy Goodfellow is concerned that profit-driven
childcare services have lost sight of just how critical it is for
children’s development to build consistent, long-term relationships
between children and childcare workers.<br>
<br>
Joy Goodfellow: So where
we have situations where an organisation is trying to cut its costs and
salaries are the high cost, for example, in a not-for-profit
organisation you could expect salary costs to be around 80% of their
total budget. The corporate sector and the two corporates that I’ve
looked at are Peppercorn and ABC Learning. They hope to keep their
budgets down under 50%. So the way you keep your salary budget down
under 50% is to think about the cost of staff in your centre. So you
might want to employ people who have lesser qualification if your
regulation allows you to do that. It might say you want to have higher
numbers of casual staff so that you can then put those staff off if you
don’t have the children there. It might mean that in a day you have
only maybe a small handful of children left in the afternoon, so you
say OK, we’ll group all those children together under this staff
member, and send the other staff member home. So there are things, or
practices that can occur that are I believe, detrimental to children
but they are undertaken in order to economise.<br><br><br>Wannan says that in the past 15 years the number of privately run
centres in Australia has risen from fewer than half the total to 70 per
cent, with many community centres closing or being taken over.<br>
<br>
This dismays Lynne Wannan, the convener of the National Association of <a tiddlylink="Community-Based" refresh="link" class="tiddlyLink tiddlyLinkNonExisting" title="The tiddler 'Community-Based' doesn't yet exist" href="javascript:;">Community-Based</a>
Children's Services, who has recently returned from a tour of Canada
campaigning to prevent an Australian-style "privatisation" of
child-care services there.<br><br><span style="text-decoration: underline;">"But instead
of increased competition, lower prices and improved quality, the
reverse has happened,</span>" she says. "It has led to a classic market
failure."<br><br><br>
In 1991, the Keating Labor Government introduced childcare subsidies
which were aimed at the creation of better funding levels for
children's services. While this did inject more funds into services, it
was also a signal to corporate opportunists to develop methods of
capitalising on these government subsidies and corporatising childcare.<br>
<br>
<br>
In 2000, the Coalition Government introduced the Child Care Benefit
scheme and, with a higher funding level for services, more
opportunities were created for private operators to achieve greater
profitability. While the benefits of the corporatisation of early
childhood education are debatable, these corporations have certainly
capitalised on childcare, through the float of their shares on the
Australian Stock Exchange (ASX) and an astronomical rise in their share
pricings.<br>
<br>
<br>
It has long been argued that privatisation and corporatised
competition drives the market towards creating cheaper and more
efficient services but, as history has shown, it can also sometimes
result in poorly-managed businesses and a decrease in the quality of
product and service. In the drive to create profits and to appease
shareholders, businesses can become unrealistically ambitious within
their markets and collapse in a spectacular fashion, as was the case
with HIH in Australia and Enron in the United States.<br>
<br>
<br>
According to Federal Government's figures, while the cost of a
typical childcare cost is $94.70 each week, a family pays only $33.10,
with the $61.60 being paid by the government directly to the service
provider. With over 60 per cent of all revenue for childcare centres
coming from government subsidies, this means that within these
corporatised services, shareholder profits are directly supported by
taxpayer funds. And it is this area which is of great concern to
community-based centres and to the general community. It also raises
the question of whether it is ethical for government funds to be
diverted into shareholder profits, or whether these funds should be
maintained for the quality care and education of young children and the
creation of better working conditions for childcare workers.<br>
<br>
<br>
<br>
<br>
<span style="font-weight: bold;"><br></span><br><hr style="width: 100%; height: 2px;"><h1><hi>Child Care Workers</hi></h1><span style="font-style: italic;">NOTE : </span><span style="font-style: italic;" id="m_ucCompleteMessage18245_m_ucBasicMessage_m_lblTextValue">I
have a window into chilcare as my wife works in this field, Even with
level three qualificatons and 5 years experience at $19 per hour, the
pay is less than you can get as an uneducated worker in most fields.<br><br>MAY 2005:</span><span style="font-style: italic;">The Australian Industrial Relations Commission this week approved pay
rises of between $6 and $146 per week for the15,000-odd childcare
workers, whose current qualified pay rate is just $14 an hour<br><br>Fulltime childcare workers earn a pittance _ as little as $25,000 a year. So, why don’t we pay them m<br><br></span>After complaints in 2004 that ABC had been underpaying its staff and
forcing them to clean toilets and buy their own uniforms, the
Queensland branch of the union that represents child-care workers, the
Liquor, Hospitality and Miscellaneous Union, handed parents pamphlets
which Groves says portrayed him as "mean and greedy" and implied he was
"trying to drive down low wages of child-care workers to line his own
pockets".<br>
<br>
In an unprecedented action, Groves sued the union's
Queensland secretary, Ron Monaghan, for defamation. This has had the
extraordinary outcome that none of the union's officials contacted by
the Herald would risk commenting on the pay or conditions of ABC staff.<br>
<br>
The
union's officer responsible for child-care workers in NSW, Jim Lloyd,
said: "I am not able to comment on ABC at all." When asked whether this
was connected with the litigation in Queensland, he said: "Good
question."<br>
<br>
Even after the substantial rises granted this week, the minimum award
rate for a child-care worker with one year's experience is $611 a week.
However, ABC workers' pay cannot be independently verified because they
are required to sign confidential agreements. Groves has pointed out
that, in return, they are issued with 150 shares (currently worth
$1200) as a signing bonus - and he says he has a low staff turnover
rate of 8 per cent a year.<br>
_____________CRIKEY ____________<br><span style="font-weight: bold;"><br></span><hr style="width: 100%; height: 2px;"><h1><span style="font-weight: bold;">GOv'T FUNDING</span></h1><br>
The
Federal Government already pours $1.7-billion a year into childcare
through the Child Care Benefit payments. ABC Learning Centre’s business
plan relies on these taxpayer dollars for 50% of its revenue.<br><br>Federal government child-care subsidies have provided the foundations on which ABC Learning was built.<br>
<br>
Indeed, Federal Government subsidies contributed about 45% to ABC Learning's Australian revenue last financial year.<br>
<br>
One of the planks of John Howard's election pitch was the Liberal Party's $687 million child-care plan.<br>
<br>
If
it won the election, the Coalition planned to pay the child-care rebate
directly to operators, instead of directly to parents, from April 1.
Directly to operators such as ABC Learning, which dominates the market.<br>
<br>
The
company's share price soared on that news - up from $5.52 before the
announcement to a high $6.28, before settling back to close at $5.99.<br><br><br>
According to an Australian Bureau of Statistics
survey, the cost of child care rose 10 per cent last year, and is up 62
per cent in the past four years. Some Sydney centres are charging $100
a day. In a bid to forestall this, when he announced a backdating of
the tax rebate in December 2004, the Treasurer, Peter Costello, warned
operators not to exploit the subsidy by increasing fees. Six months
later, ABC substantially increased its charges.<br>
<br>
he Federal Government pays parents a means-tested subsidy for each
child, ranging from $144 a week to $24.15 a week for parents earning
more than $95,683. In addition, from July 1, 2004, there is a 30 per
cent tax rebate on the balance of the cost of care, although parents
have been upset by the fine print which caps the rebate at $4000 and
postpones its payment for two years.<br>
<br>
Messara has calculated that
between 1990 and 2004, federal funding for child care has grown from
$200 million a year to $1.5 billion, increasing at an annual rate of
14.4 per cent, or four times the annual economic growth rate. This
year, with the first rebate payments, there will be close to $2 billion
to be fought over by private corporations and community-based centres.<br>
<br>
A spokesman for ABC - Groves declined five requests for an interview
over five weeks - confirmed the company received 44 per cent of its
income from government subsidies: $128 million of its $292 million
revenue last year.<br><br><br style="font-weight: bold;">
<span style="font-weight: bold;">Much of Groves’ wealth is earned from the Australian taxpayer through
family assistance payments, with the company hauling in up to $1
million a day from the federal government. ABC Learning is Australia’s
most subsidised company. Financial analysts in favour of ABC stocks
have called it “legislated growth”.</span><br><br><hr style="width: 100%; height: 2px;"><h1>GROVES</h1>Born in South Africa and resident on the Gold Coast, "Eddy" Groves was
ranked No. 2 on BRW's list of the richest Australians aged under 40
last year, with an estimated wealth of $272 million.<h1><span style="font-weight: bold;"></span></h1><span style="font-weight: bold;"><br><br></span><hr style="width: 100%; height: 2px;"><span style="font-weight: bold;"><br>By November 2005, </span>it had 697 childcare centres throughout Australia and New Zealand. In March 2006, it forecast that would have 950 centres in Australia and New Zealand by June 30, 2006.
<br><br style="font-weight: bold;"><span style="font-weight: bold;">On December 13, 2006 i</span>t was announced that ABC would acquire the second largest child care provider in the United States, Chicago based La Petite Academy for 330 million US Dollars as well as the 5th largest provider in the UK, Busy Bees Group, Ltd. With these acquisitions they are expanding into the UK market and increasing their market share in the US to 1%.[4]<br> It has expanded aggressively into the outsourcing of child care services, negotiating deals with some of Australia's largest employers including the Australian Department of Defence which involved taking over the Department's nineteen childcare facilities. Aside from offshore expansion, the company is also expanding in training and education.<br><br> It runs the ABC Early Childhood Training College, providing training for childcare workers, publishes a magazine Small Wonders aimed at parents with young children.
It is a highly profitable company, in the FY2004/5 recording net profit after tax of $52.3 million on total revenues of $292.7 million. <br><br><span style="font-weight: bold;">The six months ending 31 December 2005 </span>showed no slowing in the financial momentum for the company with profit after tax reaching $38 million and revenues of $219.8 million.
ABC Learning received $128 million of its revenue from government subsidies in the last financial year.<br><br><span><p style="text-decoration: underline;">An unexpected drop of 42 per cent in profit in the second half of
2007 to $37.1 million and adverse market rumors about its $1.8 billion
debt triggered a decline in the company's share price. Several
directors of the company were then forced to dump millions of shares
after receiving <a href="http://en.wikipedia.org/wiki/Margin_call" class="mw-redirect" title="Margin call">margin calls</a>. The combined effects caused the share price to plummet 43% to $2.15 after trading as low as $0.15. <sup id="_ref-5" class="reference"><a href="http://en.wikipedia.org/wiki/ABC_Learning#_note-5" title="">[6]</a></sup></p>
<p>The timing of the share dumps have raised questions about <a href="http://en.wikipedia.org/wiki/Insider_trading" title="Insider trading">insider trading</a>.<sup id="_ref-6" class="reference"><a href="http://en.wikipedia.org/wiki/ABC_Learning#_note-6" title="">[7]</a></sup></p><p><br></p></span>ABC Learning chief executive Eddy Groves was until this week Austock's
pin-up boy for having driven expansion across three continents that
assembled more than 2300 childcare centres with $2 billion of borrowing.<br>Groves approached Austock in 1997 as a young man and was provided with
$6 million in capital to start his business. Austock mentored Groves
for four years before they floated ABC.<br><br style="font-weight: bold;"><span style="font-weight: bold;">BB<br></span><a tiddlylink="ABC Radio National - Background Briefing: 22 February 1998 - Child Care Pains" refresh="link" class="tiddlyLink tiddlyLinkExisting" title="ABC Radio National - Background Briefing: 22 February 1998 - Child Care Pains - ratbagradio, Thursday, February 28, 2008 12:09:00 AM" href="javascript:;">ABC Radio National - Background Briefing: 22 February 1998 - Child Care Pains</a><br>With 600,000 children in child care, the cost to government has soared
to more than a billion dollars a year. There's been massive growth in
the past five years. In the early 1990s the Labor Government extended
child care funding, and for the first time gave assistance to parents
who had their children in private 'for-profit' child care centres.<br>Private centres then sprang up like mushrooms, and the non-profit
community centres which had always been publicly funded, quickly became
a minority. When the child care taskforce reported back in 1996 it
found the system was based on a mish-mash of subsidies, some for
parents, some for businesses, and others for different types of care.
It recommended all these subsidies be phased out over the next ten
years, and replaced with a new, single payment to parents.<br>Lyn Wannan is the Convenor of the National Association of Community Centres.<br>Lyn Wannan: I mean we know right now that Government policy is for no
growth in the community-based sector and for still some considerable
growth in the private sector. My view is that we need to retain a
community service sector, a non-profit community-owned sector. I think
that has to be a priority of government. I fear the loss of it
altogether. It has been the community-based sector which has fought
hard for the quality standards and regulations, and it has been the
community-based sector which has actually set the price in the past.<br><br>The push for regulations at that time was led by pre-school
associations, worried about the standard of informal care. Today an
estimated 180,000 children under the age of five are being looked after
in home-based, informal care. These are the everyday babysitting
arrangements made between families and friends, as well as the
money-making neighbourhood ventures. But not to be confused with Family
Day Care, which is a government-funded and licensed home-based scheme.<br><br><a tiddlylink="ABC Radio National - Background Briefing: 3 October 2004 - Child-Care Profits" refresh="link" class="tiddlyLink tiddlyLinkExisting" title="ABC Radio National - Background Briefing: 3 October 2004 - Child-Care Profits - ratbagradio, Thursday, February 28, 2008 12:11:00 AM" href="javascript:;">ABC Radio National - Background Briefing: 3 October 2004 - Child-Care Profits</a><br><br>As the rivers of public cash flow into childcare, who’s going to
benefit the most? Will it be parents who can go back to work? Or
children who get started on early learning programs, or will it be the
new breed of childcare centre owners who can’t believe their luck?<br><br>ABC News 9/9/04:Alan Kohler: Most of the action on the share market today was in the
childcare business. The three biggest listed operators of crèches, ABC
Learning Centres, Childcare Centres of Australia and Peppercorn
Management, announced a three-way merger with ABC on top. Now the share
prices of all three went up, but the big winner was Peppercorn, and
there was also a bit of interest in Qantas…<br><br>Gerald Tooth: The once cottage industry of childcare, run by
not-for-profit organisations and small private operators, is being
rapidly corporatised. That is, large stock market listed companies have
flooded into the sector which they see as a goldmine of profit
opportunity. It might be good news for you, if you’re an investor, but
is it good news for you and your children if you’re a parent?<br><br>Eddy Groves and his wife Le Neve. The former milkman now owns the
Brisbane Bullets Basketball team and has an estimated personal wealth
of $175-million. Most of that has been made from childcare.<br><br>Eddy Groves set up the company in 1988. In 2001 he floated it on the
stock market. At that stage he owned 31 childcare centres in South East
Queensland. Now, just three years later, he’s got 750 right across
Australia.<br><br>There are around four-and-a-half-thousand day care centres across
Australia. Traditionally the sector was dominated by small-scale
operators, community run not-for-profit organisations and small
privately-run centres.<br><br>But in 1997 the Howard Government
scrapped direct subsidies to not-for-profit childcare centres and in a
single stroke, childcare was changed. Where around 40% of government
funding had gone directly to centres, now all of it went to parents
through Child Care Benefit payments, that they pass on to the centre of
their choice. With access to a new funding stream, private centres
boomed and with the not-for-profits decimated, childcare was opened up
as a lucrative field for profit making.<br><br>Seven years later, the
government has more than doubled its childcare spend and the childcare
sector is now seen as an industry, a multi-billion dollars industry.
And it’s the new corporate players that dominate, with their
shareholder backing, management systems and economies of scale. And
it’s all happened in the mere blink of an eye.<br><br>ABC Learning
Centres led the way as the first to list on the Stock Exchange just
three years ago in 2001. Others quickly followed: Child Care Centres
Australia, <a tiddlylink="FutureOne" refresh="link" class="tiddlyLink tiddlyLinkNonExisting" title="The tiddler 'FutureOne' doesn't yet exist" href="javascript:;">FutureOne</a>, Peppercorn Management Group and Hutchison’s Childcare services,<br><br>With
the recent merger of ABC Learning Centres, Peppercorn and Child Care
Centres Australia, Eddy Groves’ company will now control 750 centres.
And as he said earlier, he reckons the company will soon be worth a
billion dollars.<br><br>Meanwhile, most childcare workers are paid $10 to $12 an hour. That’s about $22,000 to $25,000 a year.<br><br style="font-style: italic;"><span style="font-style: italic;">NOTE : </span><span style="font-style: italic;" id="m_ucCompleteMessage18245_m_ucBasicMessage_m_lblTextValue">I
have a window into chilcare as my wife works in this field, Even with
level three qualificatons and 5 years experience at $19 per hour, the
pay is less than you can get as an uneducated worker in most fields.<br><br>MAY 2005:</span><span style="font-style: italic;">The Australian Industrial Relations Commission this week approved pay
rises of between $6 and $146 per week for the15,000-odd childcare
workers, whose current qualified pay rate is just $14 an hour<br><br>Fulltime childcare workers earn a pittance _ as little as $25,000 a year. So, why don’t we pay them more? <br><br></span>Pam Cahir of Early Childhood Australia.<br><br>Pam Cahir: What’s
happening in childcare services is happening in all childcare services
right now, that is, you can’t get staff, you certainly can’t get
qualified staff, you can get casual staff, the turnover of staff is
enormous, and there are major issues around the training of staff that
we’re getting. And staff are poorly paid, the conditions are awful,
there is no career path in the sector, and so there are a lot of
fundamentals to get right before you start worrying about who’s
actually providing the care. In my view now, I don’t think it’s
appropriate or OK for parents to go to work on the back of the wages of
poorly paid staff in childcare services, I don’t think it’s OK for
services to have ratios of one to five for babies. I mean I can’t
imagine looking after five babies, I just think that’s just an
impossible task, and if you had quadruplets in this country you’d get
support. So there are some quite fundamental things that you have to
get right in order for us to actually set this sector OK.<br><br>Childcare workers are currently battling in the Industrial Relations
Courts in Victoria, South Australia and the ACT for wage rises. The
childcare entrepreneurs are opposing them.<br>If low wages are one pillar of the childcare business, government funding is the other.<br><br>The
Federal Government already pours $1.7-billion a year into childcare
through the Child Care Benefit payments. ABC Learning Centre’s business
plan relies on these taxpayer dollars for 50% of its revenue.<br><br>The debate about the privatisation of Telstra has been endless and
consumed hundreds of hours of parliamentary debate and produced
kilometres of newspaper copy, but when it comes to the question of
whether we should be selling shares in how we raise our children there
has only been the merest of squeaks.<br><br>As the use of childcare has skyrocketed in Australia, 80% of the
country’s four-year-olds are now spending some time in some form of
care each week, and she asks, do we want that care to be run by
well-trained professionals who can properly guide a child’s development
at that critical time.<br><br>For example, the ratio of carers to children in babies’ rooms in New
South Wales is one to five. In Queensland it’s one to four. Group
leaders in Queensland must be two-year trained, in New South Wales,
three year trained.<br><br>oy Goodfellow is an early childhood expert at Macquarie University. She
recently wrote a paper titled ‘Is the marketplace influencing our view
of the child?’ which focused on the shift in who is seen as ‘the
consumer’ of childcare services. Once it was the child, now apparently,
it’s the parent.<br><br>Joy Goodfellow is concerned that profit-driven
childcare services have lost sight of just how critical it is for
children’s development to build consistent, long-term relationships
between children and childcare workers.<br><br>Joy Goodfellow: So where
we have situations where an organisation is trying to cut its costs and
salaries are the high cost, for example, in a not-for-profit
organisation you could expect salary costs to be around 80% of their
total budget. The corporate sector and the two corporates that I’ve
looked at are Peppercorn and ABC Learning. They hope to keep their
budgets down under 50%. So the way you keep your salary budget down
under 50% is to think about the cost of staff in your centre. So you
might want to employ people who have lesser qualification if your
regulation allows you to do that. It might say you want to have higher
numbers of casual staff so that you can then put those staff off if you
don’t have the children there. It might mean that in a day you have
only maybe a small handful of children left in the afternoon, so you
say OK, we’ll group all those children together under this staff
member, and send the other staff member home. So there are things, or
practices that can occur that are I believe, detrimental to children
but they are undertaken in order to economise.<br><br>With ABC Learning Centres now owning 750 centres, what would be the
impact on children if such a large player found itself in financial
difficulty?<br><br>The recent history of Child Care Centres Australia provides a salutary
insight. Caroline Fewster is an Associate Professor in Early Childhood
at Bond University on the Gold Coast. She was also a board member of
Child Care Centres Australia, a board that was chaired by Liberal party
figure, Andrew Peacock.<br><br>CCCA was heading down a similar path to
ABC Learning Centres. It had floated on the stockmarket with the help
of Andrew Peacock’s son-in-law and prominent Liberal, Michael Kroger.
The company was rapidly expanding when it acquired 41 centres in
Western Australia.<br><br>The company hadn’t done its sums properly
though, overestimating its profits by almost 90%. The whole thing went
belly-up and shares were suspended from trading.<br><br>NEWS___________________________<br><br><br>After amassing a $270 million personal fortune by the age of 40,
Eddy Groves lost $45 million in just two hours on Tuesday morning.<br>Sadly for them, Eddy can be a hard man to track down. His preferred mode of transport is a private Citation <a tiddlylink="CJ3" refresh="link" class="tiddlyLink tiddlyLinkNonExisting" title="The tiddler 'CJ3' doesn't yet exist" href="javascript:;">CJ3</a> jet, which means he can whip in and out of Australia's airports at will.<br><br>It's the very same model that famous flying Australian Dick Smith
likes to get about in and, in case you were wondering, they cost about $<a tiddlylink="US7" refresh="link" class="tiddlyLink tiddlyLinkNonExisting" title="The tiddler 'US7' doesn't yet exist" href="javascript:;">US7</a> million ($A7.45 million). Which isn't quite as much as Eddy and his co-directors have blown in margin calls this week.<br><br>Federal government child-care subsidies have provided the foundations on which ABC Learning was built.<br><br>Indeed, Federal Government subsidies contributed about 45% to ABC Learning's Australian revenue last financial year.<br><br>One of the planks of John Howard's election pitch was the Liberal Party's $687 million child-care plan.<br><br>If
it won the election, the Coalition planned to pay the child-care rebate
directly to operators, instead of directly to parents, from April 1.
Directly to operators such as ABC Learning, which dominates the market.<br><br>The
company's share price soared on that news - up from $5.52 before the
announcement to a high $6.28, before settling back to close at $5.99.<br><br>n a recent presentation to sharemarket investors Mr Groves said ABC was
on target to increase the number of its centres in Australia and New
Zealand from 660 in the middle of last year to 850 by the end of June.
The company has more than tripled the number of its centres in three
years.<br><br>It has snapped up three rival sharemarket-listed
child-care operators since late-2003, and in November last year spent
$218 million buying the third-largest operator in the US, the Learning
Care Group.<br><br>The company has also bought a handful of privately
owned child-care companies, including the Sydney-based Universal
Childcare, for $18 million, in October. The stake of Mr Groves and his
wife, Le Neve, in ABC is now valued at $350 million.<br><br>The chairman of Kids Campus, John Murphy, declined to confirm speculation his company was in talks with ABC.<br><br>The Association of Community Based Children's Services has raised alarm over the potential deal.<br><br>The
association's chairwoman, Lynne Wannan, said it would result in more
child-care operators having a stronger motive to make profits and
please shareholders, rather than provide quality child care.<br><br>Source: <a target="_blank" title="External link to http://www.theaustralian.news.com.au/story/0,25197,23288077-20142,00.html" href="http://www.theaustralian.news.com.au/story/0,25197,23288077-20142,00.html" class="externalLink">Childcare business spoonfed : The Australian</a><br>n June last year, ABC reported owning 1188 centres across Australia and
New Zealand and 35 owned and 12 managed nurseries in Britain. In recent
months it has expanded its interests in the US and now owns 1015
centres to become that country's second-biggest provider. While figures
are hard to pin down, ABC's estimated control of the overall market in
Australia ranges between 20 and 30 per cent across the board, and in
some regions such as Victoria is understood to be even higher.<br><br>Ahead
of last November's federal election, Labor offered a $1.5billion
childcare policy, increasing the Child Care Tax rebate from 30 per cent
to 50per cent of formal childcare costs to a new cap of $7500 a child.<br><br>___________________<br>What happens when the Government throws $2 billion into child care? Meet Fast Eddy Groves<br>Source: <a target="_blank" title="External link to http://www.smh.com.au/news/national/cradle-snatcher/2006/03/10/1141701698670.html?page=fullpage#contentSwap2" href="http://www.smh.com.au/news/national/cradle-snatcher/2006/03/10/1141701698670.html?page=fullpage#contentSwap2" class="externalLink">Cradle snatcher - National - smh.com.au</a><br>Since then centres such as Clovelly have been struggling to stay
afloat. Almost overnight they lost their taxpayer-funded operating
subsidy of $38,000 a year, and had to raise their fees. Twenty years
ago, the centre charged $55 a week, says Pender. Today it's $55 a day
for the 55 children who are two or over and $60 for those aged under
two.<br><br>Born in South Africa and resident on the Gold Coast, "Eddy" Groves was
ranked No. 2 on BRW's list of the richest Australians aged under 40
last year, with an estimated wealth of $272 million.<br><br>As well as
holding 14.5 per cent of ABC (with his wife and co-director Le Neve)
Groves is a director of more than 40 other companies. He controls
Quantum Foods, one of Queensland's largest milk distributors; he is a
director of Bet Worldwide, which owns Canberra's online gaming venture
Sports Acumen; and he is often seen courtside at Brisbane Bullets
games, the erratic basketball team he owns.<br><br>Wannan says that in the past 15 years the number of privately run
centres in Australia has risen from fewer than half the total to 70 per
cent, with many community centres closing or being taken over.<br><br>This dismays Lynne Wannan, the convener of the National Association of <a tiddlylink="Community-Based" refresh="link" class="tiddlyLink tiddlyLinkNonExisting" title="The tiddler 'Community-Based' doesn't yet exist" href="javascript:;">Community-Based</a>
Children's Services, who has recently returned from a tour of Canada
campaigning to prevent an Australian-style "privatisation" of
child-care services there.<br><br>The association formally objected to
ABC's takeover of the rival Peppercorn group in 2004 to the Australian
Competition and Consumer Commission, on the grounds that it would lead
to regional monopolies. The commission allowed the takeover to go ahead
after ABC gave undertakings to close some centres - it has shut or sold
60 - and not to buy any more in certain regional markets. Wannan says
that in the past 15 years the number of privately run centres in
Australia has risen from fewer than half the total to 70 per cent, with
many community centres closing or being taken over.<br><br>"But instead
of increased competition, lower prices and improved quality, the
reverse has happened," she says. "It has led to a classic market
failure."<br><br>According to an Australian Bureau of Statistics
survey, the cost of child care rose 10 per cent last year, and is up 62
per cent in the past four years. Some Sydney centres are charging $100
a day. In a bid to forestall this, when he announced a backdating of
the tax rebate in December 2004, the Treasurer, Peter Costello, warned
operators not to exploit the subsidy by increasing fees. Six months
later, ABC substantially increased its charges.<br><br>he Federal Government pays parents a means-tested subsidy for each
child, ranging from $144 a week to $24.15 a week for parents earning
more than $95,683. In addition, from July 1, 2004, there is a 30 per
cent tax rebate on the balance of the cost of care, although parents
have been upset by the fine print which caps the rebate at $4000 and
postpones its payment for two years.<br><br>Messara has calculated that
between 1990 and 2004, federal funding for child care has grown from
$200 million a year to $1.5 billion, increasing at an annual rate of
14.4 per cent, or four times the annual economic growth rate. This
year, with the first rebate payments, there will be close to $2 billion
to be fought over by private corporations and community-based centres.<br><br>A spokesman for ABC - Groves declined five requests for an interview
over five weeks - confirmed the company received 44 per cent of its
income from government subsidies: $128 million of its $292 million
revenue last year.<br><br>Messara's calculations give investors an even juicier insight. In the
five years to 2008 he expects ABC to make net profits of $379 million.
If that figure of 44 per cent remains constant, this will represent
$167 million of taxpayers' money transferred directly into the pockets
of Eddy and Le Neve Groves and their fellow shareholders - on top of
the $400,000 salary packages the two receive.<br><br>After complaints in 2004 that ABC had been underpaying its staff and
forcing them to clean toilets and buy their own uniforms, the
Queensland branch of the union that represents child-care workers, the
Liquor, Hospitality and Miscellaneous Union, handed parents pamphlets
which Groves says portrayed him as "mean and greedy" and implied he was
"trying to drive down low wages of child-care workers to line his own
pockets".<br><br>In an unprecedented action, Groves sued the union's
Queensland secretary, Ron Monaghan, for defamation. This has had the
extraordinary outcome that none of the union's officials contacted by
the Herald would risk commenting on the pay or conditions of ABC staff.<br><br>The
union's officer responsible for child-care workers in NSW, Jim Lloyd,
said: "I am not able to comment on ABC at all." When asked whether this
was connected with the litigation in Queensland, he said: "Good
question."<br><br>Even after the substantial rises granted this week, the minimum award
rate for a child-care worker with one year's experience is $611 a week.
However, ABC workers' pay cannot be independently verified because they
are required to sign confidential agreements. Groves has pointed out
that, in return, they are issued with 150 shares (currently worth
$1200) as a signing bonus - and he says he has a low staff turnover
rate of 8 per cent a year.<br>_____________CRIKEY ____________<br><br style="font-weight: bold;"><br style="font-weight: bold;"><span style="font-weight: bold;">Much of Groves’ wealth is earned from the Australian taxpayer through
family assistance payments, with the company hauling in up to $1
million a day from the federal government. ABC Learning is Australia’s
most subsidised company. Financial analysts in favour of ABC stocks
have called it “legislated growth”.<br><br></span><br>ABC Learning's half-year earnings have dropped by 42 per cent to
$37.1 million, prompting investor concerns about the company's debt
structure.<br><br>At one stage today, shares dropped 70 per cent to touch a six-year low of $1.15, but have closed at $2.14.<br><br>The company, which has been in a massive expansion phase in the past
two years, has a negative balance of hard physical assets to intangible
assets to the tune of $1.75 per share.<br><br>The company also has $1.2 billion of debt repayable in three years, and $600 million of convertible notes on a nine-year term.<br><br>____<br><br><br>Source: <a target="_blank" title="External link to http://www.armedia.net.au/archive/2002b/edit03.html" href="http://www.armedia.net.au/archive/2002b/edit03.html" class="externalLink">The selling out of children's services</a><br><br>In 1991, the Keating Labor Government introduced childcare subsidies
which were aimed at the creation of better funding levels for
children's services. While this did inject more funds into services, it
was also a signal to corporate opportunists to develop methods of
capitalising on these government subsidies and corporatising childcare.<br><br><br>In 2000, the Coalition Government introduced the Child Care Benefit
scheme and, with a higher funding level for services, more
opportunities were created for private operators to achieve greater
profitability. While the benefits of the corporatisation of early
childhood education are debatable, these corporations have certainly
capitalised on childcare, through the float of their shares on the
Australian Stock Exchange (ASX) and an astronomical rise in their share
pricings.<br><br><br>It has long been argued that privatisation and corporatised
competition drives the market towards creating cheaper and more
efficient services but, as history has shown, it can also sometimes
result in poorly-managed businesses and a decrease in the quality of
product and service. In the drive to create profits and to appease
shareholders, businesses can become unrealistically ambitious within
their markets and collapse in a spectacular fashion, as was the case
with HIH in Australia and Enron in the United States.<br><br><br>According to Federal Government's figures, while the cost of a
typical childcare cost is $94.70 each week, a family pays only $33.10,
with the $61.60 being paid by the government directly to the service
provider. With over 60 per cent of all revenue for childcare centres
coming from government subsidies, this means that within these
corporatised services, shareholder profits are directly supported by
taxpayer funds. And it is this area which is of great concern to
community-based centres and to the general community. It also raises
the question of whether it is ethical for government funds to be
diverted into shareholder profits, or whether these funds should be
maintained for the quality care and education of young children and the
creation of better working conditions for childcare workers.<br><br><br><br><br><span style="font-weight: bold;"><br><br></span><br></html>
Sundays at 9.10am, repeated Tuesdays at 7.10pm
Child Care Pains
Sunday 22 February 1998
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Program Transcript
THEME
Chris Bullock: A generation of Australian children and their parents have had their lives transformed by affordable, safe child care.
The first child care children of the '70s are standing at the door of the creche again today, dropping off their own children.
But the political ground is shifting; many parents are finding that child care is not such an attractive prospect, and there are those who would warn them off altogether.
John Bradford: Look, I think it's really the value you place on motherhood, and it seems to me that we've downgraded that. We've made women feel guilty about staying out of the workforce. In fact I think a couple of feminists have basically sort of said if they weren't in the workforce shortly after they had babies, then they were essentially bludging. But I think motherhood's very important. I can't imagine a higher calling for a woman than to put that time into the development of young lives in their most formative years.
Chris Bullock: John Bradford is the Liberal member for McPherson on the Gold Coast, and he's a prominent member of the Lyons Forum, a prayer and policy advice group with strong views on social policy areas, like family values and child care.
There are many reasons why women would choose to work or to stay at home: the highest calling of motherhood may be one, but there are more mundane reasons, like making ends meet.
I'm Chris Bullock and welcome to Background Briefing.
'WIZARD OF OZ' VIDEO
In the western suburbs of Melbourne, a little girl is perched on a lounge chair, watching her favourite film.
What are you watching?
Cassandra: 'The Wizard of Oz'.
Chris Bullock: Cassandra is four, and until the end of last year, she and her two-year-old sister Jessica went to a child care centre for three days a week. Their mother, Diane, had a part-time job, until she had to make a difficult decision.
Diane: I want to work, I want to work part-time, but I keep on doing the sums and they just keep on coming up in a way that makes me think it's not worth it. It's just not worth it. And my husband said to me, 'Look, we can shoulder this child care, it's not just your wage' but as a mother, you don't see it like that, you see it as 'If most of my pay is going in child care, I might as well be at home'. And you've also got the added stresses of people telling you that you're better off at home --
Chris Bullock: That happens a lot, does it?
Diane: It happens a lot. There are two camps, and one is from family and friends who don't work telling you 'Just wait until they go back to school' and the other camp that says, professionals that I know who say, 'You stay out of the workforce too long, and you will find it very difficult to get back in.' And so you make a decision do you work for nothing to keep your hand in, I don't know, I don't know what the answer is.
Chris Bullock: And do you not in the end feel that there will be some big benefit from you staying at home with the children, that will be well and truly worthwhile in the end?
Diane: I really believe that for my children, I don't speak on behalf of other people's children, my children like balance, and they like a stimulating environment and they also love to be at home with their mother. And when I'm working, they are happy, they enjoy going to creche, they enjoy being with other children, and I think that when I was at work last year I had two very happy children. I still have two very happy children, I just have to find things for them outside of the home, and they cost money.
So your occasional care, your ballet, your gym groups, gymbaroos, your swimming lessons, all the things that you can give your children as extras, they cost money, and I've just spent about $400 on that.
Chris Bullock: Diane's dilemma is being repeated in families across Australia.
Patricia Faulkner raised two children with the help of child care; her daughter is now 20 and her son five. Three years ago Patricia Faulkner was given the job of leading a national taskforce on child care.
Patricia Faulkner: With the first child, there was still a stigma attached to women wanting to work and leaving their children, and I remember my mother sort of feeling that I was doing totally the wrong thing, and that child care was not a good option for a child. What surprised me when I came back and did the inquiry, was the number of women who believed that child care is extremely beneficial, and if their children are not getting that benefit they're somehow behind other children who are getting that benefit.
So we had women at home sort of saying 'Well it's not fair that the women at work get the good share of child care, and we're left with our children not having that same opportunity'. So it's been a tremendous cultural shift in the 15 years between my children.
Chris Bullock: Patricia Faulkner was also struck by a change in mood: many working parents were on the verge of quitting child care.
Patricia Faulkner: That's right, and I'm seeing that increasingly that people - I mean we women of the '70s really pushed to get into the workforce, and then I think you're seeing a position at the moment where people are saying 'Well it's not all that we wanted; what we really want is to somehow mix work and caring for children together, and we want men and women to share that equally.' And I think a lot of women have found that they've been doing it on their own for a long time.
The catchcry of the '70s was about choice, that women wanted to be able to choose to work. I don't think they wanted to stay there if they didn't want to work, and I don't think, again I think there's been a change in men and women, both saying that they don't want to be forced to stay in the workforce. They want to choose. I think that the availability of child care permitted people to make a choice, and that's what the women who fought for child care wanted, they wanted to make the choice. So I don't really think it equates to the other side of the Lyons Forum argument that it encourages people into the workforce, because being in the workforce and being a parent is a very difficult thing, and you don't just go into it because there is child care, you go into it for fulfilment, you go into it for a lot of other reasons; you go into it to offer better opportunities for your children. But there are some people that are finding that the choice is not a very attractive one for either the husband or the wife.
Chris Bullock: Patricia Faulkner was personally appointed in 1995 by Prime Minister Paul Keating, to help design a child care system for the future.
With 600,000 children in child care, the cost to government has soared to more than a billion dollars a year. There's been massive growth in the past five years. In the early 1990s the Labor Government extended child care funding, and for the first time gave assistance to parents who had their children in private 'for-profit' child care centres.
Private centres then sprang up like mushrooms, and the non-profit community centres which had always been publicly funded, quickly became a minority. When the child care taskforce reported back in 1996 it found the system was based on a mish-mash of subsidies, some for parents, some for businesses, and others for different types of care. It recommended all these subsidies be phased out over the next ten years, and replaced with a new, single payment to parents.
John Howard's Government, keen to make savings and with a philosophy sympathetic to home-based care, took a cue from the taskforce. It abolished grants to community centres, reduced levels of assistance for long day care, and moved towards a centralised system of payments.
The home-based Family Day Care scheme kept its funding. The big losers are the community centres, which have been forced for the first time to compete on equal terms with private centres.
The community centres say in the past they had used their Government grants to have extra staff, to ensure the highest possible quality of care; that's why they were so popular and always had the longest waiting lists. Now they've had to cut staff and put up their fees, and they're losing children.
Why are the children leaving? Well, it depends on who you ask. The Government says parents are simply exercising a greater choice of child care; the community sector believes children are being forced out of their centres.
Lyn Wannan is the Convenor of the National Association of Community Centres.
Lyn Wannan: I mean we know right now that Government policy is for no growth in the community-based sector and for still some considerable growth in the private sector. My view is that we need to retain a community service sector, a non-profit community-owned sector. I think that has to be a priority of government. I fear the loss of it altogether. It has been the community-based sector which has fought hard for the quality standards and regulations, and it has been the community-based sector which has actually set the price in the past.
Chris Bullock: There were predictions that a great number of children would disappear from the system and that many jobs would be lost as a result of the changes the Coalition Government brought in. Has that been borne out?
Lyn Wannan: Yes it has. We've now seen Australia-wide, fee increases. That's the main problem, the fees are now around about $170 per week per child. That's really the national average though, very high fee increases, that's an increase of about $18 per child per week, which is higher than has been the normal increase in fees. We've found that an average of four families have left child care centres, this is the community-based sector, and those parents cite the high cost of care as the reason for leaving, and in many cases those families, the parents, have one or both of them, decided to move towards part-time care. Some parents are trying to juggle work so they share that. Both work part-time, or they have a grandparent or someone helping with an additional day of care, so that they can really cut down their usage of the formal child care for which they have to pay. So yes, f