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More childcare comes online

By johnboy - 9 April 2012 21

Minister for Community Services Joy Burch is celebrating a rise in the number of licensed long day care places in Canberra’s childcare centres:

Data from the Community Services Directorate shows that between January 2011 and March 2012 the Directorate approved licenses for an additional 532 long day care places in 26 centres across Canberra.

“These extra places will give more families the opportunity to place their child in an education and care centre, and help address the strong demand for extra childcare,” Ms Burch said.

Ms Burch said an ongoing capital upgrade program for community-based childcare services and grants have assisted a number of centres to offer more places over the past year.

“And this growth will continue thanks to the ACT Government’s investment of $9.2 million for capital works upgrades funded in the 2011-12 Budget, which will see an increase about 170 places across nine community-based centres.”

childcare stats

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21 Responses to
More childcare comes online
1
Gerry-Built 1:36 pm
09 Apr 12
#

It is appallingly difficult to get a baby into Childcare since the new regulations came in from January 1. We had a hell of a time finding a place for our 9MO when it was time for Mum to head back to work… Even though he’d been on a waiting list prior to birth (and had siblings in the centre at the time), he was knocked off the list due to new staffing ratios – which affected all centres in the same way… Hope this move helps, we really are not satisfied by care at the Centre we did find a place at…

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2
Jethro 3:28 pm
09 Apr 12
#

Perhaps I’m a bit naive, but why aren’t there more entrepreneurs investing in childcare centres?

It seems that there is a massive market not getting the service it wants, so why aren’t people investing in opening new centres?

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3
Dilandach 8:03 pm
09 Apr 12
#

Jethro said :

Perhaps I’m a bit naive, but why aren’t there more entrepreneurs investing in childcare centres?

It seems that there is a massive market not getting the service it wants, so why aren’t people investing in opening new centres?

Razor thin profits. You can’t just open a centre and jam the kids in like beanie babies and expect the cash to flow. There are limits on how many kids you can have at a centre. Along with a certain ratio of kids to staff that needs to be kept. Those both put a cap on how much you can earn from a kid.

Of course, with a private centre you could charge what you wanted with the demand being there but even with a demand you’d still have to show why paying premium is better than waiting a bit on a list. Which would mean premium food, equipment, education and staff. Once again, cutting into any profit and still facing the same limits of numbers and ratios.

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4
Jethro 9:15 pm
09 Apr 12
#

Dilandach said :

Jethro said :

Perhaps I’m a bit naive, but why aren’t there more entrepreneurs investing in childcare centres?

It seems that there is a massive market not getting the service it wants, so why aren’t people investing in opening new centres?

Razor thin profits. You can’t just open a centre and jam the kids in like beanie babies and expect the cash to flow. There are limits on how many kids you can have at a centre. Along with a certain ratio of kids to staff that needs to be kept. Those both put a cap on how much you can earn from a kid.

Of course, with a private centre you could charge what you wanted with the demand being there but even with a demand you’d still have to show why paying premium is better than waiting a bit on a list. Which would mean premium food, equipment, education and staff. Once again, cutting into any profit and still facing the same limits of numbers and ratios.

But why are the profits wafer thin?

A kid in childcare pays more than a kid in an elite grammar school. The carers get paid close to minimum wage. Where is the money going?

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5
Gerry-Built 9:24 pm
09 Apr 12
#

It doesn’t matter how many “new” places are created if at the same time you close a similar number of places via new legislated requirements… This needs to be read in the context of how many places disappeared with the new requirements… Which I believe lowered the staff ratios and raised the amount of required floor space per child – the net effect of which was to lower the number of children a service could cater for.

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6
Jethro 11:15 pm
09 Apr 12
#

Gerry-Built said :

It doesn’t matter how many “new” places are created if at the same time you close a similar number of places via new legislated requirements… This needs to be read in the context of how many places disappeared with the new requirements… Which I believe lowered the staff ratios and raised the amount of required floor space per child – the net effect of which was to lower the number of children a service could cater for.

Which surely means a start-up childcare company has even more of a market?

Surely, if there is a market of 10 000 kids and there are only 9 000 places available, and then all of a sudden legislative requirements reduce the number of places to 8000, the demand would go up and the prices charged would also go up?

What is stopping entrepreneurs entering the market?

I want to know, because the way it seems at the moment, I would be stupid not to lease one of those giant empty shop spaces in Garema Place (eg. that empty JB store) and get a business loan in order to start up a big childcare centre in the middle of the city.

I could put a sign up in the city tomorrow advertising a new childcare centre and its places would be filled by tomorrow evening. In fact, I would wager that it would end up with a massive waiting list by the end of the week.

I’m really interested why a market with such demand just sitting there (and a market that is heavily subsidised by the government) hasn’t rapidly expanded to meet the demand.

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7
steveu 6:44 am
10 Apr 12
#

Jethro said :

But why are the profits wafer thin?

A kid in childcare pays more than a kid in an elite grammar school. The carers get paid close to minimum wage. Where is the money going?

This is something I think alot of people are asking. It cant all go to insurance companies, and despite a generous CCB scheme it seems thats theres not much difference between working and staying at home for a parent when you have 2 kids in care…

Surely this isnt a case of something being priced at what the market is willing to bear, is it?
Lets hope not.

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8
Erg0 10:08 am
10 Apr 12
#

steveu said :

Surely this isnt a case of something being priced at what the market is willing to bear, is it?
Lets hope not.

Considering that centres run by not-for-profit organisations cost about the same per day as private operations, I’d also hope not.

Havign a partner who works in child care, this has been an area of mild interest to me for a while, and I really can’t figure out where the money goes. I heard an estimate of insurance costs in a tv interview with a child care lobbyist a while ago, and it didn’t come close to covering the gap between her centre’s revenue and expenses. I’m not sure if I’m missing a big expense (beyond wages, rent, food, insurance and consumables) or if there are some serious inefficiencies in the way these places are run.

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9
Chop71 11:30 am
10 Apr 12
#

Send the little tackers to school @ 3. They do it in Canada and trained the child care workers up to be Junior Teachers. Seems a win win situation with Junior Teachers earing more than a child care worker, parents don’t have to pay child care fees and the kiddies get off to a good start with education.

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10
poetix 12:50 pm
10 Apr 12
#

Chop71 said :

Send the little tackers to school @ 3. They do it in Canada and trained the child care workers up to be Junior Teachers. Seems a win win situation with Junior Teachers earing more than a child care worker, parents don’t have to pay child care fees and the kiddies get off to a good start with education.

It can’t be good for children as young as three (or younger) to be in full time or nearly full time care, whether for a normal school day as is possibly suggested here, or in a child-care centre. There are babies at childcare who get there at 8am and leave at 6pm every work day. It’s a negative development in our society that we push children away from us as soon as we can, often for as long as we can.

Sending children off as early as possible is not a ‘good start with education’, unless you want them educated to feel less important than the parents’ work. I feel the same way about the proposals to have government assistance for nannies looking after children, as if children were entitled to no more than a paid baby-sitter every day. It’s just not good enough. They should usually be in the care of someone who loves them. I’m not saying one partner should be stuck at home all the time, but there needs to be more balance in favour of young children than there is at the moment. I am not having a go at anyone here, but I just feel that society’s emphasis on everyone who can working in as highly paid a job as they can has distorted out priorities.

When exactly did it become necessary to have two full time wages (minus massive childcare costs) to live? That is a serious question; is it because our expectations are so much higher in the area of housing? Or because we put such emphasis on status and being at home with children is seen as a low status occupation and/or an indulgent luxury? (Someone actually told me I was spoilt for staying at home with my daughter once, with just very part-time childcare. I buried this person in the backyard in my copious free time.)

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11
DeskMonkey 1:16 pm
10 Apr 12
#

Jethro said :

Gerry-Built said :

It doesn’t matter how many “new” places are created if at the same time you close a similar number of places via new legislated requirements… This needs to be read in the context of how many places disappeared with the new requirements… Which I believe lowered the staff ratios and raised the amount of required floor space per child – the net effect of which was to lower the number of children a service could cater for.

Which surely means a start-up childcare company has even more of a market?

Surely, if there is a market of 10 000 kids and there are only 9 000 places available, and then all of a sudden legislative requirements reduce the number of places to 8000, the demand would go up and the prices charged would also go up?

What is stopping entrepreneurs entering the market?

I want to know, because the way it seems at the moment, I would be stupid not to lease one of those giant empty shop spaces in Garema Place (eg. that empty JB store) and get a business loan in order to start up a big childcare centre in the middle of the city.

I could put a sign up in the city tomorrow advertising a new childcare centre and its places would be filled by tomorrow evening. In fact, I would wager that it would end up with a massive waiting list by the end of the week.

I’m really interested why a market with such demand just sitting there (and a market that is heavily subsidised by the government) hasn’t rapidly expanded to meet the demand.

If you are willing to go through the extensive process of ensuring that your company meets all the tax requirements and legislation surrounding opening a childcare centre, then go fo it.
1. http://www.deewr.gov.au/Earlychildhood/Programs/ChildCareforServices/Operation/Pages/Informationonbecominganapprovedchildcareservice.aspx
2. http://www.deewr.gov.au/Earlychildhood/Programs/ChildCareforServices/Operation/Pages/Legalresponsibilitieswhenoperatingachildcareservice.aspx

You’ll then need to find the appropriately trained staff, the right location, probably a highly recommended cook if you want to provide that service, purchase Early Learning tools like puzzles, toys etc, pay for the water, electricity,food, wipes, spare nappies in case a parent forgets, sleeping mats, administration (paper, envelopes etc)
Then you need to pay your insurance, wages, rent….maintenance of the property…the list goes on.

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12
Erg0 1:44 pm
10 Apr 12
#

poetix said :

When exactly did it become necessary to have two full time wages (minus massive childcare costs) to live?

The short answer is “When everyone else started doing it”. Everyone wants to have the same standard of living as the family next door, and if the family next door has two incomes then you’ll need the same. Multiply by a few million and you have our current state of affairs, where what started as a financial benefit for those who chose to do it has, in the face of increasing household incomes and consequently increasing cost of living, become a necessity for most.

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13
johnboy 1:52 pm
10 Apr 12
#

Not to mention the minor matter of a great number of women not wanting to spend their lives at home raising the children.

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14
DeskMonkey 2:05 pm
10 Apr 12
#

johnboy said :

Not to mention the minor matter of a great number of women not wanting to spend their lives at home raising the children.

I went back to work, not because I wanted to, but because I had to. I would absolutely love it if I could stay at home with my little one, still have enough to pay off my car, put food on the table and pay bills associated with home ownership, but I can’t.

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15
Erg0 2:32 pm
10 Apr 12
#

johnboy said :

Not to mention the minor matter of a great number of women not wanting to spend their lives at home raising the children.

That’s certainly another factor, but as a childless male I’ve learned to steer clear of any discussion involving what mothers may or may not want to do with their lives.

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