Friday, 14 November 2008

ABC Learning Centres- the saga continues

With the appointment of receivers by the banks to ABC Learning Centres, along with the board of the compnay appointing voluntary administrators, in all likelihood the company will be broken up and sold off either piece meal or in large chunks.

It has been suggested by Julia Gillard that 40% of the centres are losing money. As she has pointed out- with a company that has opaque accounts, these losses could be for any reason- and not necessarily because these centres' ordinary expenses are higher than their income.

The company hired to hire staff, 123, has suggested that ABC has breached its various licence requirements because the ration of students to staff is too high because there are too few staff.

The receivers have been back to the banks, asking for more money, to stay afloat, on top of $22M committed by the Federal Government to keep things going to Christmas (in addition to all the money thrown by the Federal Government in subsidies).

Julia Gillard has also sent in the forensic accountants to try and sort out the mess (one can guess that they will be expensive) and Kevin Rudd even mused about amending the Trade Practices Act so that one company cannot dominate the market as ABC is alleged to have done.

In the midst of all this mess, worried parents will think, night after night- "Will my children be able to go there tomorrow? What if they can't? Will I have to quit my job? What then? What happens after Christmas?"

This is what Julia Gillard had to say in a media release:

ABC Learning - Administration and Receivership


The Minister for Education, Julia Gillard has welcomed the receivers of ABC Learning Centres, McGrathNicol, commitment to keeping the child care centres open and that they would continue to operate as usual.

The Australian Government has been in discussions with creditors, particularly the banking syndicate of international and Australian banks who have appointed the receiver, to support continuity of service delivery to provide some comfort to parents and employees.


The Government’s priority is to ensure working families reliant on ABC Learning can continue to access child care for their children and ABC Learning employees have
some immediate stability.


This is a unique situation because ABC Learning is the largest private child care provider in the country with approximately 120,000 children attending more than 1000 child care centres that employ more than 16,000 people.


The Child Care Industry Taskforce, in the Department of Education, Employment and Workplace Relations, is working closely with the administrator, Ferrier Hodgson, and the receiver, McGrathNicol.

The Government continues to support working families to access child care by
providing subsidies through the Child Care Benefit and the Child Care Tax
Rebate. It is anticipated ABC Learning Centres will receive more than $300
million in Child Care Benefit, a fee reducing payment on behalf of parents, from
the Australian Government this financial year.

Information for parents and employees about this morning’s announcement is available on the mychild.gov.au web site. Parents and employees will
also be able to register to receive further information via email as it becomes
available.

The Australian Government has set up a dedicated information
hotline on 180 2003 to provide basic information to parents and employees about
the announcement. The call centre will operate from 3pm today.
Specific questions concerning the management and operation of ABC centres should be directed to the receiver’s hotline on 1800 222 543.

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