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It’s not as easy as “ABC”?

By Jillian Wolfe
Created 19/09/2008 - 15:04

This contribution has been submitted to Webdiary by a student in the Online Journalism unit for the Masters in Media Practice and Masters in Publishing courses at The University of Sydney as part of the unit's assessment. The topics covered in the pieces awaiting publication are interesting – and diverse. We hope that Webdiarists will enjoy reading them, as well as giving these aspiring journalists plenty of constructive commentary.


It’s not as easy as “ABC”?
by Jillian Wolfe

ABC Learning, a leading organisation with many political links, is another of Australia’s blue chip companies on the verge of collapse. Its problem, as has befallen the property and banking sector, is too much debt. What’s difficult to fathom is the social impacts of this on our community with all the dependencies on the services they provide. It’s easy to ignore a broken bank as just another greedy institution and that deserves their demise. Not so when you are the nations largest childcare provider to hundreds of thousands of working families. The challenge here is whether the government should intervene and nationalise a private sector entity to ensure delivery of a vital piece of social infrastructure. It is time to look at this potentiality, surrounding which there is presently no debate.

What failed? The business, the leaders or the customers?

ABC Learning undertook massive debt and overseas expansion. This is a reflection of greed and is inconsistent with social outcomes or values shown by the Kindergarten Union as opposed to ABC Learning.

ABC Learning grew on the government incentives to parents to support more child care places. So what were they doing expanding overseas? They were acting in their shareholders interests without due regard for the children’s interests. The Government may need to inject capital to stabilise the company should there be a lack of interest in a potential infrastructure fire sale.

The customers with the government rebate in tow were more likely to take on a larger mortgage. Mum and Dad both work to pay the mortgage and the children attend childcare. With the potential collapse of ABC Learning these families will be faced with the possibility of one parent having to give up work to care for the children.

With household mortgage debt at record levels, John Howard’s experiment is about to fail, dismally. All those families with two incomes, and children in ABC Learning centres are about to learn their DEF’s.

Sarah Brown* and her husband have two children currently attending an ABC Learning centre in Western Sydney five days a week. Between them they earn approximately $120,000.00 a year which supports their $400,000.00 mortgage. More than 25% of their salaries, including government rebates, go toward childcare fees. When I asked Mrs Brown how her circumstances would change should the ABC Learning centre close down she showed concern. “We have no family living in Sydney. All our family are in Brisbane, so we can’t call on Grandparent’s to help out with looking after the kids. So it would be a case of either of us having to give up work, which would be difficult (because) we need the money to pay our mortgage”.

If Mrs Brown was to give up her job (being the lower paid of the two) it would force the Brown’s into a situation where they would incur massive mortgage stress. “It is something that we have looked at and we may have to sell our house and probably, possibly move back to Queensland even”.

So Eddie, you might have centres in Australia, New Zealand, America and the United Kingdom, but have you stopped ever to consider the mortgage belt that will pay for your greed?

*name changed for privacy reasons

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