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Gillard insists childcare industry sound -

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Gillard insists childcare industry sound

Broadcast: 19/11/2008


TONY JONES: Parents are being urged not to panic about the availability of childcare after the
collapse of yet another big corporate player. NSW-based CFK Child Care today followed ABC Learning
into receivership, saying it's losing close to half a million dollars a month.

But the Deputy Prime Minister Julia Gillard insists there's nothing inherently wrong with the
viability of childcare as a business and is confident there won't be a domino effect throughout the

Dana Robertson reports.

DANA ROBERTSON: It's an alphabet soup that's been dumped in the hands of administrators. Hot on the
heels of ABC Learning's collapse, another titan of the child-care industry, CFK, has called in the

CHRIS BURRELL, PARENT: This is the first I've heard about it. Obviously I saw everything about the
ABC Centre but nothing in relation to this.

CFK child-care operates more than 43 centres throughout NSW which care for more than 4,000

But a failed buy-out of eight of its centres by ABC has left the company struggling in a sea of
debt. It owes more than $12 million and says it's haemorrhaging $400,000 a month.

One analyst says it's a warning about the consequence of child care as big business.

ROGER MONTGOMERY, CLIME CAPITAL: Where there's a race on to accumulate assets or to accumulate
centres at a rapid rate you find that your returns drop and you can't do the best by the children
and satisfy shareholders at the same time.

LOUISE TARRANT, MISCELLANEOUS WORKERS UNION: Look it certainly must shake confidence in market
driven solutions. The reality though is that three quarters of child care in Australia is provided
through commercial providers, but it certainly calls into question some of the sort of business
practices of the corporate end of the commercial market.

DANA ROBERTSON: In the short term at least the company is promising it will be business as usual.
But parents aren't so sure.

CLARE WHARRIER, PARENT: What that means in two, three, four months time who is going to be running
the centre, what changes, and the possibility of being left without child care at the end of that.

JULIA GILLARD, DEPUTY PRIME MINISTER: No child-care centre in this country can close without giving
30 days notice.

So people should not be immediately concerned that their child-care centre is not going to be
available for them to drop the kids off tomorrow or next week.

DANA ROBERTSON: And while Julia Gillard is offering reassurance to parents, there's no promise of
an ABC-style financial bail-out.

JULIA GILLARD: ABC Learning was obviously in a unique position. It was the biggest child-care
provider in this country, providing care to more than 100,000 children.

DANA ROBERTSON: The Federal Government says it only learnt about the imminent receivership of CFK
yesterday. And that its child-care taskforce is in urgent talks with the administrators.

But Julia Gillard insists that the collapse isn't a sign of things to come and says child care is
still a viable business.

JULIA GILLARD: There are child-care centres around this country, they are stable, they are
financially viable, and they are going to be there for the long term.

So it is clearly possible in this country to run child-care centres so that they are stable and
financially viable.

DANA ROBERTSON: There's just no word yet on who will be doing it.

Dana Robertson, Lateline.