MEDIA ALERT: STOP PROFITING OFF OUR CHILDREN

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 Place. Little People’s Place is owned by Vijay and Phyllis Narula and estimated to be worth $40 million. Last year Vijay bought Phyllis a $400,000 Lamborghini Urus and the couple enjoy flaunting their wealth around Perth.

Affinity Education Group is owned by Quadrant, one of Australia’s largest private equity firms, which paid $650 million to acquire the business from Anchorage Capital Partners in June 2021. This represented a tripling in value, six years after Anchorage paid $213 million to take the company off the ASX. During this period Affinity posted some of the lowest quality ratings in the sector and allocated one of the lowest shares of revenue to wages (54% in 2019). In 2020 its Chairman Chris Hadley sold his three-storey house in Mosman on Sydney’s lower north shore, to the company’s Managing Partner Marcus Darville for $10.9 million.

Only About Children is owned by American private equity giant Bain Capital. Bain bought OAC in 2016 for what is thought to be about $400 million from the company’s founder Brendan McAssey. The structuring of Bain’s ownership, it is reported, has left OAC highly leveraged with $220 million in debt, ten times its earnings. In the financial year ending June 2020, despite operating at a profit, OAC ultimately declared a loss of $116 million and paid no tax in Australia.

Guardian Childcare and Education was bought by Swiss-based global private equity investors Partners Group for $440 million in 2016 from Malaysia-based Navis Capital. Guardian in Australia is controlled by a Zeuss Childcare registered in London as part of a group structure involving Scottish limited partnerships, a form of ownership criticised for lack of transparency and facilitation of tax avoidance and money laundering.

Mayfield Childcare’s financial reports illustrate the substantial amounts of money that can be generated off a moderate number of day care centres. In the years prior to the COVID disruption, Mayfield paid dividends of eight to nine cents to holders of its 31 million shares. This represented distributions of up to 2.8 million dollars per year.

Child care real estate is touted by some financial analysts as where the real money in the ECEC sector is made. Profit figures for real estate investment trusts (REITs) specialising in ‘childcare’ listed on the Australian Stock Exchange back this view up. Ultimately, the megaprofits and salaries being made through these REITs flow from Australian taxpayers through the Child Care Subsidy (CCS).

ENDS Media Contact: 1300 898 633, [email protected]

UNSAFE AND NON-COMPLIANT: PROFITS ABOVE SAFETY IN EARLY LEARNING

Today the United Workers Union (UWU) has released a report outlining the failure of for-profit childcare providers to keep Australian children safe.

The report draws from previously unseen data obtained through freedom of information requests all over Australia. This data reveals what many in the sector have believed for a long time: that for-profit providers deliver poorer safety and lower quality early learning compared to the not-for-profit sector.

The report Unsafe and non-compliant: Profits above safety in Australia’s early learning sector found:

• Non-compliance, which represents breaches of a range of minimum safety standards, is far more common among for-profit providers than any other type of service. From just over 12,000 enforcement actions taken nationally against early education providers since 2015, an overwhelming 74% involved for-profit centres, despite the for-profit segment making up only half of the sector.
• For-profits are also the worst-performing type of service when it comes to ensuring quality education and care for Australian children. For-profit providers have the highest number of centres that don’t meet the national standard, with more than one in six (over 1200) centres failing to meet the National Quality Standard.
• For-profit long day care centres are twice as likely to be rated as not meeting the national quality standards than not-for-profit centres.
• The three biggest for-profit LDC providers in the country are G8, Affinity and Busy Bees. The poorer quality ratings of these three players epitomise the crisis in the sector. Collectively they had seven times the number of centres rated ‘Working towards NQS’, by percentage, when compared with the three largest not-for-profit providers Goodstart, C&K and KU.
• Information about a centre’s track record on safety, compliance issues and enforcement actions are almost impossible for parents and the public to find.

Quotes attributable to Helen Gibbons, Director Early Education, United Workers Union

“Parents in Australia pay some of the highest out-of-pocket costs in the OECD, and have fair expectations of a safe environment for their children. These results should be alarming for parents accessing for-profit services across the country.

“Parents should expect to be informed about the safety track record of their children’s centre. That’s just not happening right now.

“For-profits have a demonstrated history of poorer safety and lower quality outcomes than the not-for-profit sector but many parents have no idea and no way to easily access this information.

“That’s why UWU is calling for greater transparency around safety and quality for every centre, not only to help parents make choices about where they send their children, but to motivate providers to prioritise safety and quality over profits.”

Quotes attributable to Natasha, Sydney parent

“I have two children, 10 and 7yo. I work full time and I’ve experienced the full range of service types. When you are in the middle of returning to work and trying to juggle family life and find a spot for your child, you don’t always have the capacity and experience to find all the information.

“One centre we attended had a great reputation as a not-for-profit service. The educators really wanted to educate and care for my children. But the centre was then bought out by a private for-profit provider, and in my opinion is now only about profit.

“While the for-profit providers can seem shiny and new, with photos of celebrity chefs on the walls, this doesn’t mean better outcomes.

“It’s been a rollercoaster but eventually I chose to enrol my children at a local not-for-profit provider for more social connection and play based learning, which is what mattered to us as a family. This has been the best place for my children.

“At my child’s not-for-profit centre, the facilities are more well-loved and less shiny, but the educators are more experienced. They have better working conditions and are passionate about what they do. They have longer tenure because turnover isn’t as high.

“Looking back, my experience means I would look for different things when choosing a centre because I know more.”

Quotes attributable to Samira, Queensland educator

“I’ve worked in privately owned for-profit centres and not-for-profit centres, and the for-profit centres are far worse for children and educators. There is a lot of cost-cutting and a focus on saving money at the expense of educators’ wellbeing and standards.

“The for-profit centre I worked for was regularly understaffed, with educators left to supervise large numbers of children of different ages on their own. Instead of backfilling staffing changes, educators were sent home early to cut costs.

“I was once left with 25 children on my own. You can imagine the risks this put children in. Many children had special needs and weren’t provided with support. Educators were left to deal with extreme behaviours with no resources to support them, under extreme stress. We also had to do paperwork and cleaning while supervising children because no extra time was allocated.

“Sometimes my director would leave a young student educator with me and told me ‘you have help’. When I raised concerns I was told it was ‘fine’. It was far from fine.

“There were many incidents we felt were unsafe. The centre often hired those new to the sector like me who were less familiar with regulations and their rights, and promoted a culture where you should be grateful to be employed.

“At the for-profit centre, our pay was the lowest you can get and we weren’t recognised for our qualifications. Staff meetings weren’t paid, there was no support for professional development or keeping practice up to date, and any education that was mandatory by regulation was paid for out of our own pocket. It was exploitative. Turnover was really high and this impacted on the children.

“It was all about image over reality.”

ENDS Media Contact: 1300 898 633, [email protected]

GOVERNMENT FUNDING MUST ADDRESS JOBKEEPER-STYLE LOOPHOLES

The United Workers Union (UWU) welcomes today’s announcement of additional funding for the early education sector, but the Federal Government has included a raft of JobKeeper-style loopholes.

“The Federal Government’s announcement of funding for centres has learned no lessons from employers rorting previous funding like JobKeeper,” said UWU ECEC Director Helen Gibbons.

“The entire sector has been calling for additional funding for centres to survive during lockdown restrictions. Today’s announcement is no doubt a welcome relief for many – but the fine print has no guarantees this funding will be used as intended.

“Once again, so-called ‘critical workers’ in early education have been treated like an afterthought.

“By not linking funding to wages, the Government has failed to close loopholes we’ve all seen exploited by large greedy companies.

“Providers across the sector, both profit and not-for-profit, have been crying out for additional funding. Now that it’s here, employers need to stand up and commit to using this new funding to support workers’ income and employment.

“This means no cuts to hours or forced taking of leave.

“Providers need to publicly commit to using this funding as intended, to maintain educators’ wages. If employers try to do the wrong thing, educators will hold you to account.

“United Workers Union calls on the Federal Government to close the loopholes in their new funding announcement to ensure every employer in the sector does the right thing.

“This new funding must be tied to wages to provide real support for the early education sector.”

ENDS Media Contact: 1300 898 633, [email protected]

BREAKING: REPORT SHOWS EARLY EDUCATION WORKFORCE IN CRISIS

Today the United Workers Union (UWU) has released a ground-breaking report showing the early education is on the brink of crisis.

In the largest survey of its kind, nearly 4000 current and former educators revealed they are leaving the sector at record levels because of excessive workloads and low pay.

Over a quarter of current educators reported they plan to leave the sector within the next twelve months, and of those educators who do plan to stay, almost half (46%) think about leaving ‘all of the time’ or ‘most of the time’. In contrast, projections show the sector needs 40,000 additional staff by 2023 to meet growing demand for early learning services.

“The message from early educators across the country is clear: they are at breaking point.  There is no early childhood sector without early educators, and they simply can’t afford to stay and hold it together anymore,” said UWU’s Early Education Director Helen Gibbons.

“The pandemic has exacerbated an existing problem, with job vacancies close to doubling compared to pre-COVID levels. High workload because of increased understaffing is pushing more and more educators out of the sector.

The report Exhausted, undervalued and leaving: the crisis in early education also found:

• 70% of educators surveyed said they ‘always’ or ‘often’ worry about their financial situation.
• 81% of centre directors say they have had difficulties in attracting and recruiting staff.
• 92% of educators told us ‘under-the-roof’ ratios compromise the safety and wellbeing of children.
• 65% of educators report that their services are already understaffed, and providers are reporting having to cap new enrolments because they can’t find enough staff.
• 82% of current educators say that in the past month they ‘always’ or ‘often’ felt rushed when performing key caring and/or educational tasks.
• Over 75% of educators strongly agree that turnover negatively impacts how children learn and develop as well as their emotional wellbeing more broadly.
• Almost half of educators surveyed would not recommend ECEC as a career.
• Every state and territory was represented. Key findings: NSW, VIC, QLD, SA, WA, ACT, TAS, and NT

“Services are already reporting having to cap new enrolments. Without urgent action, this crisis will spiral out of control and children and families will miss out, losing access to crucial early learning services.

“Across the sector, educators, families and service providers are in agreement: the only way to fix this crisis is to fix educators wages and conditions. The Federal Government is currently considering a workforce strategy for early education. This is the opportunity for the Government to provide a real solution for the sector: by delivering a workforce strategy that provides targeted funding to improve wages.”

ENDS Media Contact: 1300 898 633, [email protected]

FAILED VACCINE ROLL OUT LEAVES SCHOOLS, COMMUNITIES UNSAFE

Teachers, Educators and Education Support Staff struggling to get access to vaccination has left schools and early learning centres unsafe, and society without a clear path out of the Covid-19 mess, three major education unions said today.

In a letter released today the unions called for the Minister, Greg Hunt, to prioritise access to vaccination for teachers, educators and support staff in schools and early learning centres to keep these frontline essential workers and those they educate safe.

In calling for priority vaccinations – staff in schools and early learning centres are not in any priority category at the moment – the unions argue priority access to vaccinations for staff would minimise the impact of future Covid-19 outbreaks on millions of families and children who rely on schools and early learning services.

The unions – United Workers Union, the Australian Education Union and the Independent Education Union – represent thousands of early childhood educators, teachers and education support staff across Australia.

Helen Gibbons, Early Childhood Education and Care Director of United Workers Union, said today:

“We are calling on the Federal Government to rectify what has always been an appalling situation and lift early educators up the queue so that they can get the jab as soon as possible.

“Early learning services remained open throughout the pandemic, supporting families, children and essential workers. You can’t socially distance with young children. The pandemic is travelling through our communities and educators are on the frontline unprotected.

“If that’s not the definition of requiring high-priority access to vaccines, I don’t know what is.”

Correna Haythorpe, the Federal President of the Australian Education Union, said:

“It has been infuriating that teachers and education support staff have been given no priority in the vaccination queue.

“As we understand more about the Delta variant, it becomes clear just how serious the health risks are to students and the education workforce.

“Schools pride themselves as being safe places for students, teachers and support staff and it’s simply not good enough that teachers and education support staff are not given priority vaccinations.”

Christine Cooper, Acting Federal Secretary of the Independent Education Union of Australia, said:

“Teachers and education support staff have exposure to an extensive proportion of the community.

“They have at all times met the challenges of this pandemic with professionalism and commitment to their students and communities.  They too, deserve to feel safe and protected.”

“Instead of getting schools on a ‘return-to-normal’ path, we have teachers and support staff experiencing long waits for the vaccine. The way forward for schools and for society is to ensure that all teachers and education support staff have priority access to vaccination. This will safeguard schools and centres as the safe environment needed for the essential uninterrupted delivery of quality education.”

ENDS

Media Contacts

United Workers Union: 1300 898 633, [email protected]

Australian Education Union: Alys Gagnon, 0438 379 977, [email protected]

Independent Education Union of Australia: Simon Schmidt, 0466 144 360, [email protected]

BUDGET FAILS WOMEN WORKING IN AGED CARE, EARLY CHILDHOOD EDUCATION AND CARE

The Morrison Government’s attempt to show a commitment to women in this Budget ultimately does not reach the women it’s supposed to benefit, the United Workers Union said today.

“If the Coalition was looking to solve its ‘women problem’, this Budget is not the fix,” Jo-anne Schofield, the National President of United Workers Union said today.

“When you look closely at this Budget, at home care, at residential aged care, in disability services and at early childhood education and care (ECEC), it is scanty on detail and depressingly low on impact where it really counts.

“UWU members who work in home care, residential aged care and ECEC wanted to see in this Budget long-term structural fixes to address low pay and insecure work for overwhelmingly female workforces that have been ignored for far too long.

“It leaves the firm impression of a Budget built largely by men trying to find solutions to problems they do not fully understand.”

1. Home care and residential aged care (stats on female participation below)
2. Early childhood education and care (stats on female participation below)

Home care and residential aged care

“This Budget gives the illusion of action on aged care but fails to address fundamental issues facing the sector,” Carolyn Smith, Aged Care Director of United Workers Union, said today.

“In residential care when you look at the promise of care time for older Australians, it’s being introduced with the lightest feather of regulatory enforcement: an obligation to report care time minutes in July 2022.

“The aged care sector knows what this is about: no-strings-attached funding for providers and no clear expectation that money will be meaningfully tied to care for older Australians.

“Given 42 per cent of the sector is not profitable – while others are wildly profitable – it looks a lot like a bailout package rather than caring for older Australians.

“In home care clearing the waiting list over two years simply means older Australians will continue to die on the waiting list.

“Scott Morrison has broken his promise for a comprehensive response to the aged care crisis by rejecting the Royal Commission’s recommendation that the home care wait list be cleared by the end of the year.

“In both sectors, and completely unaddressed by this Budget, women are on some of Australia’s lowest  pay rates for insecure work that barely give them enough hours to live on, amid chronic understaffing.

“Where is the commitment to secure, well-paid, safe jobs necessary for quality care of older Australians, with the Royal Commission forecasting there will be an extra 80,000 aged care workers needed by 2030?”

Ms Smith also said the centrepiece aged care funding measure of $17.7 billion a year over five years – or $3.5 billion a year – paled in comparison to the $50 billion in funding needs indicated by the Royal Commission and others over the same period.

“In its final report the Royal Commission found Federal Government funding in 2018-19 was $9.8 billion lower annually than it should be if aged care had been appropriately funded,” Ms Smith said.

“The funding shortfall is leading to horrendous human costs in aged care, with older Australians left unsafe and vulnerable, and workers left physically and emotionally exhausted.

“Respected think tanks including the Grattan Institute and the Centre for Future Work have come to exactly the same figure of $10 billion extra a year needed for quality aged care for older Australians. When is the Federal Government finally going to recognise that a well-staffed, well-trained, adequately-paid workforce  is the single biggest driver to providing the quality care time needed by older people in Australia?”

Early childhood education and care

“Once again, Scott Morrison’s Federal Government has failed to deliver a cohesive national vision for early education in Australia,” Helen Gibbons, Early Education Director of United Workers Union, said today.

“The promises last weekend about additional fee relief for parents hasn’t lived up to the hype, with many families missing out on any help and all changes delayed till after the next election. Early education continues to be unaffordable for many.”

Budget announcements tonight did nothing to improve the quality of services across the country, with 19 per cent not meeting minimum standards. A total of 2800 services across Australia failed to provide the very basic care and education the community considers a minimum and this Budget ignores this continuing problem.

“The Budget tonight did nothing to support and value the essential early education workforce that this community relied on throughout the pandemic.

“The vast majority of workers in early education are female and low-paid. The Morrison government continues to treat this mostly female workforce with indifference.”

The early education sector is facing a workforce crisis, without enough qualified educators to meet current demand due to high turnover. Researchers report that 37 per cent of educators intend to leave the sector with this alarming figure rising to 45 per cent in remote areas. Staffing waivers are increasing dramatically as centres struggle to fill positions and the government estimates that Australia will need an additional 39,000 educators in the sector by 2023.

“Educators leave the job they love because love doesn’t pay the bills. The Budget did nothing to address the workforce crisis,” Ms Gibbons said.

“This Federal Budget was Scott Morrison’s opportunity to make a real difference for women, including the hundreds of thousands of workers in early education. Instead Morrison has well and truly missed the mark.

“The early education sector is in crisis, with calls for reform sounding from every corner of our society. Scott Morrison has chosen not to listen.”

1. About 89 per cent of home care workers and about 87 per cent of residential aged care workers in direct care roles are women, within a total aged care workforce of more than 360,000.
2. About 94 per cent of women in early education roles are women in a workforce of more than 150,000

ENDS Media Contact: 1300 898 633, [email protected]

GOVERNMENT FUNDING ANNOUNCEMENT FORGETS WORKERS IN EARLY EDUCATION

The United Workers Union (UWU) welcomes additional Federal money for early education but the Federal Government’s recent announcement offers no solution to a growing crisis in the sector.

“The Federal Government’s announcement of $1.7billion to fund early childhood education is a band-aid on a sector in crisis,” said UWU ECEC Director Helen Gibbons.

“The announcement provides some financial relief to some families, but provides no funding linked to improving the quality of the sector or educator wages.

“The early education sector is facing a workforce crisis, without enough qualified educators to meet current demand due to high turnover. The Federal Government’s announcement will only increase that demand, without providing any support for educators to stay in the sector.

“The system is broken, and this half-hearted attempt by the Federal Government is not good enough and speaks more to a short term political fix than a vision of delivering a world class early education system.

“There can be no resolution to the growing crisis in early education without directing funding to pay early childhood educators a decent wage, and to ensure quality standards across the sector.

“United Workers Union calls on Scott Morrison and the Federal Government to deliver a Budget which addresses the workforce crisis in early education.”