Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

This is the third time since December I have risen to speak on the issue of child care. I am returning to it because I am angry, just as working parents in my electorate are angry. They are angry at the continuing crisis in child care in Australia and this government’s failure to address the problem. On 11 March the Sydney Morning Herald published a feature article by Ben Hills called ‘Cradle snatcher’, a profile of Eddie Groves, the multimillionaire boss of ABC Learning Centres. I commend Mr Hills on this long investigatory article. It cast new light on the scandalous situation which this government, lazy and complacent in the area of child care, has allowed to develop during its decade in power.

Mr Groves’s company is an Australian private sector child-care provider. The opposition has no objection in principle to private child care or to Mr Groves getting into the child-care business and making a profit. If Mr Groves had become a multimillionaire by filling a need in the community or providing a quality product at a reasonable price, I would say good luck to him. But that is not what Mr Groves has done. What he has done is get rich by milking government subsidies. As he told the Canadian Broadcasting Corporation recently, when the federal government in Australia is paying you $128 million a year in subsidies—44 per cent of the income that he gets from the 25 per cent near monopoly of the Australian private child-care sector—‘you can’t help but make some money’.

It is enough money, in fact, to be able to build a fortune estimated at $1.2 billion since he opened his first child-care centre in 1989 and enough money to be able to donate large amounts regularly to the Queensland Liberal Party and recently $60,000 to the Nationals. It is no coincidence that the chair of ABC Learning Centres is Sallyanne Atkinson, a former Liberal Lord Mayor of Brisbane and a Liberal parliamentary candidate. Nor is it a coincidence that the National Party’s Larry Anthony, a former minister for children’s services, is on the ABC board.

Ben Hills’s article shows how Mr Groves has been using his corporate clout to squeeze out competition. It is monopoly power—something the ACCC should investigate. Small community child-care centres cannot afford to fight ABC Learning in court. Mr Groves is using legal power and financial clout to establish monopoly power—something that the Liberal Party in the old days would have been against. He has cherry-picked the most desirable locations—affluent suburbs full of young families where both parents work—while leaving the rest of the community deprived of an essential service. Mr Groves has maximised his profits by underpaying staff and forcing them on pain of dismissal to perform cleaning duties and other tasks that they are not trained for.

When the union which covers child-care workers accused ABC Learning of driving down wages, Groves sued the union secretary for defamation. These tactics will of course become much easier now that the government’s extreme industrial relations law has come into effect. Groves has shown how the combination of low-wage labour and milking government subsidies can lead to huge profits in a short time. Where he has gone, others will surely follow. (Time expired)