Should childcare be offered by for-profit providers?

The Minefield

In March, an ABC Four Corners investigation detailed widespread instances of abuse, injury and neglect in childcare centres across the country. Just a few months later, in a climate of already heightened public awareness and media scrutiny, a series of deeply disturbing allegations came to light of child sex abuse in childcare centres in Victoria, New South Wales and Queensland.

The nature and extent of these instances of neglect and abuse, as well as the fact they involved the most vulnerable among us, suggested a systemic problem in Australia’s $20 billion childcare sector — something that tougher regulation or a national register of childcare workers or improved child safety training or even CCTV cameras will not fully address.

Put simply: the concern isn’t simply that a few ‘bad actors’ managed to slip through the regulatory cracks, but that something more thoroughgoing or pervasive is undermining the quality of the care and education being provided to young children. Interestingly, both the Education Minister, Jason Clare, and the Minister for Early Childhood Education, Jess Walsh, have implicated the profit motive itself as compromising the care of some providers. Walsh singled out “some repeat offenders who continue to put profit ahead of child safety”, and Clare has acknowledged that “overwhelmingly higher levels” of quality are found among the not-for-profit providers.

The federal government has announced a series of measures that, it hopes, will restore the trust of parents and the public in Australia’s childcare system — two-thirds of which is comprised of for-profit companies that have benefitted greatly from the subsidies provided to parents by the government. One of these measures is the ability to strip unsafe early education and care providers of their eligibility for subsidised care.

But it is government subsidies themselves that have fuelled demand in the first place, precipitating a rapid influx of stock-market listed companies hoping to reap their own share of the windfall. It’s a familiar story that has played out since the late-1970s: rather than running vital utilities or social services themselves, government delegates the provision of vital goods and services to “the market” into which it intervenes through funding or regulation. Michael Maron has termed this the advent of the “regulatory state”.

But are there some social goods — which is to say, goods that are integral to the possibility of human flourishing — that should not be exposed to the perverse incentives afforded the market? As Andrew Hudson, CEO of the Centre for Policy Development, has pointed out: “For too long, early childhood education has operated as a private market — leaving governments with limited tools to manage quality, access, or safety across the system. That’s what needs to change.”

Unless there is an overriding commitment to the wellbeing and flourishing of the children on the part of the organisation — as the animating principle or ‘telos’ of the organisation itself — what reason is there not to cut corners, to limit staff pay, to reduce overhead, to maximise efficiency, to do the bare minimum in order to approach compliance?

When the wellbeing of children is made subordinate to the goal of profit, it is the children themselves who are worse off.

You can read Luara Ferracioli and Stephanie Collins reflect on whether early childhood care and education are compatible with the profit motive on ABC Religion & Ethics.