The ABC's of Privatizing Daycare

Coming to a city near you, sooner than you think; state subsidized Big Box Day Care. Not public non-profit daycare but private for profit daycare.

- A multinational chain that some day-care advocates warn will bring a big-box concept to Alberta child care has started shopping for day-care centres in the province.

Now will our 'pals for child care choice' be outraged? Somehow I doubt it.

Edmund Groves is CEO of Australia-based ABC Learning Centres, which has aggressively expanded into jurisdictions where governments provide generous payouts to offset child-care costs. Tens of millions of those public dollars have contributed to ABC profits.

In a 2006 report by the Australian Institute, a respected Australian think-tank, researchers said poor food quality and cost-cutting have compromised quality even as ABC has amassed a fortune from public child care subsidies given to parents.

The report was based on a survey of employees at daycares across Australia. The report singled out ABC, saying that despite an estimated $172 million in government subsidies, the daycare giant fell short in most areas of quality care when compared to community based, non-profit centres.

The report said the chain did not always serve nutritious food (one staffer interviewed called the food "atrocious"); did not always provide enough quality toys and equipment (toys often have to be purchased from an ABC-owned company); and hired only the minimum number of staff required by law. It notes daycare teachers "are required to do all the cleaning themselves as well as care for the children."

In Alberta clearly the Tired Old Tories don't care.

Jody Korchinski, spokeswoman for Alberta Children's Services, said foreign and chain ownership (of daycares) are not concerns of the government.

In Alberta the government has always favoured private operators, baba sitting, anything but publicly funded, public day care.

With 65% of day care provided by private owners in Alberta why would the government care about corporate Big Box Day Cares making a profit off of parents and taxpayers. The government has one of the worst records for enforcement of regulations of private operators who have faced scandals over the past number of years.

But this big box operator from Australia is not pursuing the small private daycares, it is after the publicly funded not for profit sector. One entrenched it will then eliminate by sheer size the small operators not unlike the capitalist model it is built on; Wal-Mart.

And after all it's just another form of the Tired Old Tories beloved P3's .

Of course it is inevitable that if a corporate monopoly like Australia's ABC takes over in Alberta it will wipe out both private and public daycares. It fulfills the dictum of the market; capitalism exists to concentrate capital through monopoly.

It isn't known exactly how many operators are selling their facilities, but day-care operators say they have heard nine centres in Edmonton and even more in Calgary are being sold to 123 Busy Beavers Learning Centres, which is affiliated with the Australian-based day-care giant ABC Learning Centres.

In Edmonton, officials with the Garneau/University Child Care Centre received a letter from Adroit Investments LLC of North Carolina informing them that "we might have an interest in purchasing your child-care centre."

The letter says that if they are interested in selling, they should contact Adroit, and if the centre meets its criteria "we will make you an offer that may be of interest to you ...

"We represent a financial group buying child-care centres in Alberta. We have been contacting and purchasing child-care centres in Alberta since January of this year.

"If we have spoken over the phone over the past six months, please take this time to really think about what you want out of your business."

Meanwhile, a Calgary jobs website has listed postings for child-care workers on behalf of 123 Busy Beavers. Calls to a toll-free number on the Busy Beavers website were not returned.

Mark Davis, a representative of Adroit in Charlotte, N.C., wouldn't say who his company represents.

But an e-mail from Adroit to a B.C. child-care centre refers to websites for 123 Busy Beavers and for ABC's parent company, 123-Global.

The message also contained an Australian fax number.

Child-care advocates are sounding the alarm since learning an investment firm called Adroit Investments LLC has contacted local child-care operators in a bid to buy them out.

The Coalition of Child Care Advocates of B.C. traced the company back to 123-Global and A.B.C. Learning Centres, a private Australian child-care corporation that's gotten flak in several countries for monopolizing child-care and providing minimal services to cut costs.

Meanwhile, some child-care providers approached by Adroit wonder if they will be able to compete.

"We've known about them for years," said Susan Harney, operator of Country Grove Children's Centre in Langley. "They build up what they call critical mass and put other programs out of business."

Harney has already rejected Adroit's advances and wants others to do the same. "Our child-care system is not for sale," she said. "The focus needs to be on providing good service, not making a profit."

The Groves daycare empire has grown with remarkable speed in the past few years.

Recent purchasing raids into the U.S. and U.K. have made Groves's kiddie care empire the largest in the world with some 2,400 daycares in its stable and a ticker tape value of more than $2.5 billion.

Corporate records show three ABC-related companies – ABC Acquisitions, 123 Global and 123 Busy Beavers – share a director named Donald Jones.

ABC Acquisitions and 123 Global, two companies that scout out international growth opportunities for ABC, share the same Brisbane address where Groves's ABC Learning Centres was also headquartered until recently.

A report by Citigroup analysts last year reported a close corporate lineage between Groves's ABC Learning and Jones's ABC Acquisitions.

It says the acquisitions arm finds daycares appropriate for international expansion and then sells the properties to ABC.

"We believe the purpose of the `arm's length' arrangement is to enable the (daycare) licence to be categorized as an asset in (ABC's) balance sheet," the report concludes. "Once a decision is made to proceed on a centre, (ABC) are committed to acquiring the centre."

The report also says ABC's development team is looking to expand into Canada.

Corporate records also show other signs of Groves's interest in Canada.

In August, Groves and several other ABC executives incorporated a company called ABC Canadian Holdings in Brisbane, which lists ABC Learning Centres as the sole shareholder.

A Groves spokesperson said ABC Canadian Holdings "is a dormant company with no assets and no trading."

In practical life we find not only competition, monopoly and the antagonism between them, but also the synthesis of the two, which is not a formula, but a movement. Monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists. If the monopolists restrict their mutual competition by means of partial associations, competition increases among the workers; and the more the mass of the proletarians grows as against the monopolists of one nation, the more desperate competition becomes between the monopolists of different nations. The synthesis is of such a character that monopoly can only maintain itself by continually entering into the struggle of competition.

Karl Marx
The Poverty of Philosophy
Chapter Two: The Metaphysics of Political Economy

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