STOP PROFITING OFF OUR CHILDREN
Nov 29 2021
United Workers Union.
WHEN: 10am Monday, 29 November 2021
WHERE: Front lawns of Parliament House, Canberra
WHAT: UWU is releasing a shocking report exposing the financial practices of for-profit providers in Australia. Early childhood educators are calling for more transparency to stop private providers putting profits before children. Dynamic visuals of educators in front of Parliament House and interviews.
Today the United Workers Union (UWU) has released a ground-breaking report exposing how private for-profit early education providers are siphoning off money that should be invested in children to fund lavish lifestyles and transfer profits out of the country.
The report “Spitting off cash” – Where does all the money go in Australia’s early learning sector? finds:
Hundreds of millions of dollars are distributed annually to shareholders and CEO salaries can top $1 million.
20% of revenue through Australia’s 8,300 long day centres -$1.7 billion per year – is collected by five large companies, three of which are based offshore. Parents may be surprised to learn that their local early learning centre is controlled by Swiss bankers or an American private equity behemoth.
Despite receiving generous COVID relief payments and availing themselves of JobKeeper, four of the six largest for-profit ECEC providers paid no tax in 2020.
There is a race on to buy up big, with five big and growing companies – G8, Affinity, Guardian, Busy Bees and Only About Children – already accounting for 20 per cent of highly profitable long day care centre revenue.
An economic model characterised by secure government subsidies and low wages for educators has created an elite of super rich ECEC owners, financiers and executives.
Financialisation of ECEC has seen the worst excesses of Australian corporate culture including wage theft, aggressive tax avoidance and other misconduct creep into the sector.
Quotes attributable to Helen Gibbons, United Workers Union Early Education Director:
The early education sector desperately needs more transparency and financial regulation.
Australians rightly expect that their tax dollars should fund quality early education and fair wages for educators, not million dollar CEO salaries, transfers to tax havens and Lamborghinis.
Parents would be horrified to learn that this creeping commercialisation comes at the cost of quality care and education for their children and an underpaid and undervalued workforce of educators. For profit services are more likely to be understaffed, to fail to meet quality standards and to commit safety breaches.
Private early education companies are enriching their owners and executives at the expense of the care provided to children and the wages and wellbeing of employees.
CEOs pocket eyewatering salaries and owners enjoy windfall profits. Companies change hands regularly. Many providers are owned by private equity funds. There are multimillion dollar transfer payments to overseas headquarters while no tax is paid in Australia.
Parents and taxpayers have a right to know how their fees and public funding is being spent – not on quality early learning for their children, but on obscene salaries, payouts and profit margins of overseas companies.
If the Federal Government continues to wash their hands of responsibility for the way in which child care subsidies are used, they are endorsing a model which sees parents and taxpayers paying for super-yachts instead of education.
United Workers Union calls on the Federal Government to stop the private sector from profiting off our children and:
Make what really happens in early education transparent by requiring every business to publish their profit and how much tax they pay because parents and taxpayers have a right to know;
Cut the fat cats out of early education by investing in not-for-profit and public provision; and
Regulate how much profit you can take out of early education to ensure taxpayers’ money goes to supporting little children and their educators, and not obscene profits.
The largest for-profit providers in Australia: some key facts
Early childhood education and care (ECEC) is big business. The sector turns over $14 billion annually across 16,000 centres in Australia, and receives $11 billion per annum in public funding. 80% of sector revenue flows from Government. This guaranteed flow of ‘child-care’ subsidies has made the sector attractive to large financial interests who are taking control of long day care, the most lucrative part of the sector.
G8 Education is Australia’s largest for-profit long day care provider. G8 is listed on the ASX and has turnover of close to a billion dollars. It distributes tens of millions of dollars to shareholders annually.
Last December it was revealed G8 had systematically underpaid thousands of its educators over the previous six years. This theft, affecting 27,000 current and former employees, is estimated to total $80 million. In stark contrast to the low wages it pays its hardworking staff, G8 executives are showered with exorbitant salaries and benefits (see Table 4). CEO Gary Carroll has come close to earning a million dollars in recent years.
Think CEO Matthew Edwards recently made $44 million selling his shares when Busy Bees acquired Think.
Busy Bees is a British-based international for-profit ECEC company currently in talks to acquire another 11 centres owned by WA provider Little People’s
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