Childcare – conflict of interests

(originally published May 2006 in now defunct Livejournal blog)

ABC Early Learning is taking over community based child care and making big profits. It couldn’t make the profits without government subsidies, which add up to $128 million in 2005, or without its anti-union practices which reduce the amount of its income it shares with its workers. Meanwhile fees for working parents are very difficult to afford. Can parents and childcare workers unite to reclaim childcare to be run to put children first, not profit-making?

The SMH of 11 March reported on this –

Some points are worth highlighting.

“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.

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.”

“But there is also a dark side to ABC’s operations that is little discussed, because the company is fiercely litigious towards competitors and critics alike.

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”.

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.

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.”

So it has been left to MPs such as Labor’s child-care spokeswoman, Tanya Plibersek, and Michael Danby, Labor’s deputy whip in the House of Representatives, to take up the cudgels on behalf of ABC’s workers. Speaking under parliamentary privilege in 2004, Danby said that to cut costs “ABC centres refuse to hire sufficient cleaners, refuse to pay staff a decent wage, and require staff to bring in their own music to play to children”.

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.”


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