Governments allowed Genius Childcare to acquire 31 childcare centres. Parents want to know why

The federal government has refused to answer questions on if and why it allowed controversial provider Genius Childcare to expand its nationwide operations earlier this year, after a spate of resignations from Canberra staff who say the company owes them wages and entitlements.

Some 15 educators at Gowrie Genius Childcare quit last Friday (6 December), although Region is informed the service remains open this week.

Several parents have also withdrawn their children from the centre, including Meike Moeckel, whose daughter has stopped attending.

“We withdrew her because we overheard staff talking about not being paid super. After inquisition, they said there had been payment issues since the time Genius took over the service six months ago,” Ms Moeckel said.

“We had been with them for five years and never had any issues. The people there have been our family. But with all the staff resignations, there’s no educator left that my daughter knows.”

Parents and educators have asked why governments allowed Genius to take over 31 childcare centres nationwide from another private provider, G8 Education, including five in Canberra, despite the fact the company was previously embroiled in financial controversy.

In March 2023, a landlord evicted them from a Perth location due to unpaid rent.

A few months later, the company was taken to court over $4.9 million of rent owed at a centre in Melbourne.

Region asked Dr Anne Aly, the Federal Minister for Early Childhood Education, if she approved the decision to allow Genius to take over the G8 centres and whether the federal government were now investigating the company.

Her office referred the matter to her department, which made a general statement.

“Australia has a dual process to gain approval to administer the Child Care Subsidy that involves the State and Territory Regulatory Authorities and the Commonwealth Department of Education,” a spokesperson said.

“The Department is closely monitoring developments and will work with State and Territory Regulatory Authorities who have responsibility for regulating quality and safety to ensure any appropriate action is taken.”

The federal childcare regulator, the Australian Children’s Education and Care Quality Authority, also refused to answer questions on what involvement it had in the decision to approve Genius, providing Region with contact details for state and territory regulators.

The national workplace relations regulator, the Fair Work Ombudsman, was asked if it had any oversight of Genius.

“The Fair Work Ombudsman is making inquiries in relation to Abacus, a subsidiary of the Genius Childcare group,” a spokesperson said.

“The Fair Work Ombudsman’s investigation into G8 Education following its self-reported underpayments of its staff is ongoing.

“It is not appropriate to comment further on either matter at this time.”

Region also asked the ACT childcare regulator, Children’s Education and Care Assurance (CECA), if and why it approved Genius’s expansion.

“In October 2023, G8 Education Ltd announced a plan to divest 31 loss-making education and care services to companies within the Abacus group and pay the acquirer $26.5 million. This arrangement involved the acquirer taking over G8’s lease liabilities,” a spokesperson said.

“In November 2023, G8 Education Ltd applied to have all its seven approved services in the ACT transferred to Abacus 49 Pty Ltd (formerly known as TAK Operations Pty Ltd) (Abacus). Abacus was an existing approved provider under the National Law, having been approved by the Queensland Regulatory Authority in 2018.

“CECA, the ACT’s childcare regulator, intervened in these transfers under provisions of the National Law. CECA did have concerns about the provider and interviewed people with management and control from the provider about their history of compliance under the National Law. Ultimately, the evidence available to CECA did not warrant the prevention of transfer under the National Law.”

Rebecca Odlander, a parent of a one-year-old and three-year-old, who recently withdrew her children from the Genius Gowrie service, can’t understand why the company was given the green light.

“If you’re the regulator and approve childcare centres, how can you allow them to have childcare centres if they’re not paying staff? Because this ultimately affects children. If staff leave because they’re unpaid, parents don’t know who is going to be looking after their kids,” she said.

Ms Moeckel also said the decision is affecting children in the care of the centre.

“We’ve noticed standards start to slip. The yard doesn’t look as good as it used to, two toilets out of the four are not working. The educators have to do the cleaning themselves as there’s no paid cleaner.”

Genius Childcare was contacted for comment.