Every early educator knows that in early education, despite millions of dollars of government funding and high fees for families, there is still not enough money going to children or educators.
Now we know more about where all that money is going. A shocking report from United Workers Union has exposed obscene greed and dodgy financial practices, with Australia’s largest for-profit early education providers taking taxpayers’ money and sending it to shareholders offshore, or to line the pockets of CEOs.
• Hundreds of millions of dollars are distributed annually to shareholders and CEO salaries can top $1 million
• $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.
• 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.
Our sector desperately needs more transparency and financial regulation.
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 and profit margins of overseas companies.
– Pixie, Early Childhood Educator
Why is this important?
Parents would be horrified to learn that for profit services are more likely to be understaffed, to fail to meet quality standards and to commit safety breaches.
Private ECEC companies are enriching their owners and executives at the expense of the care provided to children and wages and the wellbeing and security of their employees. These practices are contributing to the worst staffing crisis the sector has ever seen, with educators leaving the sector in record numbers.
That’s why educators like me are calling on the Federal Government to:
• 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;
• 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.