More headlines today about ABC Learning child care centres.
40 per cent of them, or 386, had doubtful profitability levels and could close at the end of the year. And the banner headlines tell us that that would mean 30,000 Australian children currently in child care would be without it next year.
According to the receiver, the remaining 656 centres are viable and will operate under a sustainable business model.
Now in all of this plenty of rubbish has been written and said, all of which will alarm parents. But sticking to the facts would help.
Firstly, this is a private sector outfit gone bad.
Whoever allowed this Woolworths-like domination of child care?
One outfit owning or running 1200 child care centres in Australia and New Zealand. 25 per cent of all long day centres in Australia. 100,000 Australian children. 16,000 workers who'll whistle for their holiday and long service leave. And the outfit owes $1.1 billion to various banks.
The Commonwealth Bank is owed $650 million.
We're told the accounts are a complete mess and an absolute disgrace. Not my words, those of someone familiar with the company. Then there are the shareholders who've been dudded.
The shares, worth eight dollars last year, now they're not worth three stale cigarettes.
No one is denying the concern parents would have if they have to go to work and are worried about how to provide for their children.
But that surely is not, emotional issue though it is, the overriding issue.
This outfit has gone under. Over a billion dollars down the tube.
Accounts allegedly a complete mess and an absolute disgrace. But these were audited accounts.
Are the auditors going to be in the dock?
Just like HIH were audited accounts and Lehman Brothers were audited accounts.
And what was the basis of banks lending to this outfit?
Then there's the question of $22 million in a so-called rescue package to keep 386 unprofitable centres open until the end of the year.
This is taxpayers' money.
There might be an argument for throwing money at child care, but to throw money at one private sector component of child care is bordering on scandalous.
44 per cent of its revenue came from Federal child care subsidies, and it still went under.
This is a long episode of Government irresponsibility.
We don't want to fund proper child care, so we throw the problem into the lap of private sector cowboys who pay our teachers less than anywhere else in the world. Don't worry about their training and just tick-off childcare and hope that the greedy pursuit of profit will equal proper child care outcomes.
And to add to the fiasco, $22 million of our money is going to be poured into this ABC Learning black hole.
What should be done?
That's easy.
It's a failed company. Sell it.
Except that no one buyer should be allowed to own 1200 child care centres.
Will there be a buyer?
Well, the Government pays $300 million in subsidies a year.
Not a bad sort of proposition for some buyer. But remember, Government allowed this to happen.
We have to question whether the whole child care rebate model is the correct way to be doing things.
Much of the childcare is skewed towards families who live in the inner city and benefits families with both parents in full time work.
So families in outer suburban areas where only one parent goes to work are penalised.
All parents should be treated equally.
Scrap the child care rebate. Re-jig the family tax benefit.
Provide a payment to all families which they could spend on childcare if they want, or the money could be used to assist one parent to stay at home.
That way families have choice.
And those who are providing child care services would have to be more up to the mark to attract parents to those services.
What we've got now is the child care equivalent of Woolworths and Coles.
And some families are going to do it tough in the meantime.
But there are many families already doing it tough in relation to child care services, and no one seems to worry too much about them.
This collapse tells us that the whole system is wrong.
Throwing good money after bad is not going to help.
