Parents are losing their faith in the childcare industry

Parents invest enormous trust in the childcare industry, but they are fast losing their faith as scandals – including allegations of sexual abuse in centres, physical assaults and neglect – mount, costs increase and quality issues persist.

The announcement on Wednesday that Australia’s largest private childcare centre operator, G8 Education, is planning to close up to 40 centres – nearly 10 per cent of its local operations – is emblematic of the crisis confronting the sector.

It followed the Herald’s revelation that the group planned to close early learning education centre Greenwood Penrith next month.

G8 said the mass closures resulted from ongoing occupancy slumps, rising costs and the fallout from the childcare sex abuse scandal. But G8 is the latest of 27 childcare services in NSW to either shut down operations or be sold to new owners.

G8 refused to specify reasons for choosing the Penrith business other than it had “no tolerance for any behaviour or practices that compromise a child’s health, safety or wellbeing”. However, parents and ex-staff say the centre was understaffed and undersupported and should have been closed years ago, alleging toddlers were left in soiled nappies all day and children frequently were unaccounted for at the sprawling site.

Parliamentary documents show Greenwood Penrith had come to the attention of authorities four years ago and subsequently received three show cause or emergency action notices, but it continued to operate.

Greens MP Abigail Boyd said the centre was a “pretty shocking service” and, given its history, not unreasonably slammed the regulator for “letting big providers off the hook” by allowing them to close their doors rather than stepping in to force their closure.

The 2023 childcare inquiry found for-profit operators – which own about 70 per cent of Australia’s childcare centres – had higher margins than not-for-profits, while spending significantly less on staffing, with more casuals and less-experienced educators.

Governments are finally trying to lift quality benchmarks for childcare after years of giving little thought to the perils of allowing profit motives to take precedence over professional standards. The centres burgeoned, and staff turnover intensified as fees soared until we now have a have situation in which some centres are unable to meet the standards with current budgets.

Childcare is shaping as a major political policy battleground. The Albanese government is expanding financial support for childcare and the opposition is canvassing alternatives to subsidised childcare, including vouchers for nannies or family members, income splitting, extending paid parental leave and tax breaks.

But such piecemeal promises no longer wash. Ongoing problems, including allegations of physical and sexual abuse, have significantly undermined the confidence of parents, while putting huge pressure on their budgets. It’s time for root and branch reform.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.