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Government silent on ABC Learning fee specula -

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Government silent on ABC Learning fee speculation

The World Today - Friday, 7 November , 2008 12:18:00

Reporter: Simon Santow

ELEANOR HALL: There are more questions than answers this lunchtime on the future of the collapsed
childcare operator, ABC Learning.

The company's receivers and the Federal Government are both seeking to assure parents and staff
that it's business as usual.

But no details are being released on the extent of the company's debts or how much public money may
be needed to help keep the 1,100 childcare centres in business.

And the Deputy Prime Minister Julia Gillard is also refusing to answer questions about whether fees
will need to rise to keep ABC Learning afloat.

Simon Santow has our report.

SIMON SANTOW: ABC Learning's receivers McGrathNicol are spending today and most likely the next few
days at least, going through the collapsed childcare operators' books.

In the meantime, they're leaving the commentary to the Federal Government and Education Minister
Julia Gillard.

JULIA GILLARD: Good morning Fran.

FRAN KELLY: Julia Gillard, 1200 childcare centres, more than 10,000 staff and 110,000 children -
who is in charge of this rescue and what role and responsibility does the Federal Government have?

JULIA GILLARD: Well a receiver was appointed to ABC Learning yesterday so obviously the receiver is
managing the situation and has all of the legal obligations that you would anticipate in those

SIMON SANTOW: Julia Gillard might have been fielding questions from Radio National's Fran Kelly,
but she wasn't answering too many of them.

FRAN KELLY: What sort of government funds are we going to be contributing to make sure this

JULIA GILLARD: Well, we will continue to stay working with the banks and with the receiver on this.

SIMON SANTOW: On and on it went, repeating assurances from the receiver that centres will remain
open and that any parent or staff member concerned can ring a hotline.

FRAN KELLY: So let's get clear on this. The care for kids, these centres will remain open, that it
an open-ended commitment. The Government is backing that guarantee?

JULIA GILLARD: The receiver yesterday upon his appointment put out a media statement which was
entitled, "ABC Childcare centres stay open". Centres are open. They are providing care.

SIMON SANTOW: But the minister was reluctant to answer whether any taxpayer dollars had been asked
for or pledged to keep the centres operating or if the Government had any plans to buy any or all
of ABC Learning.

JULIA GILLARD: We are in discussions with the receiver and with the banks.

SIMON SANTOW: The lack of answers and details has the Opposition calling for more transparency.

Spokeswoman Sophie Mirabella.

SOPHIE MIRABELLA: The Government did inherit a very huge surplus and it is incumbent on them to
make decisions and I would have thought that 100,000 in care in about 80,000 families is a crisis
and does require, whether it is some sort of financial assistance, or whether it is some sort of

It may not necessarily require significant government funds but to have some sort of idea about
what you are doing in government to deal with this crisis would be a starting point, one would have

SIMON SANTOW: The Opposition wants to know whether parents will be slugged extra, on top of already
high fees, to keep ABC Learning Centres from closing.

Julia Gillard wouldn't speculate.

But the Opposition's Sophie Mirabella isn't ruling that out as an option if it came to it.

SOPHIE MIRABELLA: I would need to look at all the options there on the table and I want to know
before any further commitments, what the contingency plan that is in the Government's intray. What
is their contingency plan?

There may be a way around it. There are a myriad of solutions and we need to look at all possible
solutions. I am not sanctioning a particular course of action but we firstly need to start with the
basics and the basics is, what's the plan?

SIMON SANTOW: Ginny Udy runs SDN Children's Services in New South Wales, a not-for-profit childcare
organisation with more than 20 centres.

She rejects the often repeated commentary that ABC Learning was run on a profitable model and there
was nothing wrong with the business except that it expanded too quickly and took on too much debt.

GINNY UDY: We would look very carefully at any centre and make sure that it did have the potential
to be viable and we would be very interested in the management of centres. That is sort of what we
are good at.

We are not-for-profit organisation. We don't have a lot of money. We haven't got the financial
resources to be buying up the centres but we believe that the Government has an obligation to do
that and to put these centres into the hands of organisations with a proven track record of being
sustainable and delivering good outcomes.

ELEANOR HALL: Ginny Udy is the Chief Executive of SDN Children's Services in New South Wales. Simon
Santow was our reporter.