ABC Learning Centres create limbo for 100,000 children
Ben Packham and Susie O'Brien
November 07, 2008 12:00am
TENS of thousands of families could be forced to find new child care after the collapse of industry giant ABC Learning Centres.
Receivers yesterday took over the company's 1200 childcare centres, which look after more than 100,000 children.
Corporate recovery firm McGrathNicol said all ABC centres would remain open while the company's operations were reviewed.
But there are no guarantees for parents in the longer term.
Industry experts believe many less profitable ABC centres -- run at a loss to squeeze out competitors -- will be forced to close. Those in inner-city areas with high land values could also be sold. Deputy Prime Minister Julia Gillard, said the company's collapse was a "unique situation" because of its huge position in the market.
She said the Government, through a special departmental taskforce, would do everything it could to keep the centres open.
But she refused to say if extra government funding would be used to prop the centres up. The big banks have a combined exposure of about $1.3 billion to the company, Australia's biggest childcare provider.
McGrathNicol partner Chris Honey said none of the company's assets would be sold until a thorough analysis of the business had been undertaken.
"Parents and staff can be reassured that, following our appointment, the group's child care centres will continue to operate, certainly while we conduct a review of the group."
Anne, whose daughter Alyssa who attends ABC in Balwyn North, said it would be difficult if the centre closed.
"We have been given a letter saying it's business as usual and let's hope that the Government does step in because there are so many centres at stake," she said.
But Rebecca Tomaszycki, whose son Austin, 5, attends the ABC Learning Centre in Bulleen North, said she was not worried.
"If the company needs to be bailed out it will be, and the Government will step in.
"I'm not worried about it. Anyway, Austin is at school next year," she said.
The company's 16,000 workers are nervously awaiting developments after being told their leave entitlements were not guaranteed from today.
Staff members were barred from speaking to the media.
But the husband of a worker at the North Croydon ABC Learning Centre said: "Staff are all upset because they don't know if they are going to get their holiday pay or long service leave and, really, their jobs as well."
As community childcare operators signalled their preparedness to take over ABC centres, experts warned less competitive centres were likely to close.
Barbara Romeril, national secretary of Australian Community Children's Services, said those with low enrolments in areas of high competition were most in jeopardy.
"It's been part of the ABC plan for some time to carry some non-viable centres because their normal practice is to put other centres out of business by saturating the market," she said.
A hotline has been set up for information on ABC Learning Centre -- 180 2003.