Monday, March 3, 2008

~ more pernicious mischief from eddy the ‘milkman’ groves

'The board of directors “must act in the best interests of the company as a whole’ with their main task being "to drive the performance of the Company" - ABC Learning Annual Report 2004, p. 32'

And how far down the list of priorities are the children?

Can’t stop myself. Sorry. But it isn’t every day a bone fide capitalist swine meets a sticky end. With his brown winkle-pickers, his Ferrari and his basketball team [the Brisbane Bullets], he is the corporate vulture to end all corporate vultures.

Since my earlier post on the subject, I’ve learnt some more things about Groves’ operation which I just have to share. In Sunday’s Age a financial commentator named James Kirby discussed his fall in a wider context. The piece was far too apologetic for my taste - concentrating on Groves' impact on the business world rather than on our society - but Kirby did point out some of his failings – hubris was the word he used.

In 2003 Fast Eddie sued the child-care union for defamation. It began with his insistence that carers [then on $10, now on $14 an hour] wear uniforms and pay for them themselves. The LHMU [Liquor Hospitality & Miscellaneous Union] reacted with an ‘Uncle Scrooge’ campaign. distributing ‘defamatory’ pamphlets at his centres. Groves spat the dummy, “they made it personal and they are going to regret it. I'm looking for $500,000 in damages.” He refused to meet with the union, and the case, though it did reach the courts, seems to have fizzled out.

In a 2003 article, Kirby wrote that ‘big profits are drawing free-wheeling entrepreneurs into the industry’. One financial adviser commented, 'I'm 77 and the child-care business is the best business I've ever seen in my life. The Government pays subsidies, the parents pay you two weeks in advance and property prices keep going up."

Kirby tells us that ‘diamond miners, dot-com pioneers and real estate agents are getting on board.’ but it does trouble him that due to a lack of appropriate regulation ‘anyone in any business, from cigarettes to strip joints, can buy a chain of child-care centres’. That was four years ago. I wonder if anything has changed? It does tell us that Groves was not the only one with his finger in the pie – he just stole the biggest slice.

Claire Kimball [a ministerial advisor to Howard's Minister for Children Larry Anthony] was quoted as saying. "There is no regulation of ownership and there is no reason to believe there should be."

Astonishingly, the maleficent Michael Kroger [and, for a time, father in law Andrew Peacock] also got involved in the child-care industry. I wonder, would someone like him be in it for the money or the children? Or, a more pertinent question, would you put your children under his care? Kroger’s company Child Care Centres of Australia would up getting into hot water with ASIC and pulling its horns in.

While on the political angle, The Age also draws our attention to the aforementioned Larry Anthony who, after he lost his parliamentary seat in the 2004 election, was appointed to the board of ABC Learning. Anthony was Howard’s Minister for Children. He was instrumental in the creation of the 30% government child-care rebate, which was largely responsible for those ‘diamond miners’ jumping on the childcare milk-wagon. Labor accused him of a conflict of interest. Anthony would give Groves ‘unparalleled access’ to the Howard government. Indeed, I recall reading that a new defence Department building had chosen ABC to manage their in-house crèche.

I have also come across a very revealing 2006 report by The Australia Institute, a left-leaning think-tank based at ANU. It was gratifying seeing many of my perceptions and suspicions given weight by a scholarly paper.

Though there is much disparity in the quality levels of ABC centres, they are generally deficient compared to independent or community based centres. There are poorer staff-to-child ratios. Staff have insufficient time to develop relationships with the children. Some centres have no cleaners, and the staff must pick up the slack, as well as wrangling a large amount of paperwork - leaving too little time for their primary responsibility.

There is often insufficient food or it is of poor quality, or lacking in fresh fruit and vegetables. Qualified cooks are poorly paid. ‘Equipment budgets appear to be adequate but… staff felt limited by the fact that these budgets must be spent at an ABC Learning-owned toy company that does not provide a wide enough variety for programming which is developed for individual children.

Staff were ‘expected to present a professional program without being paid or treated as professionals. A number said that they and other staff regularly complete tasks at home. Some said that they were not paid for set up time, clean up time, or for evening staff meetings. One said that since the introduction of the Work Choices legislation, staff had been told that they were no longer permitted even to claim time-in-lieu for these necessary tasks.’ [Some familiar Work Choices horror scenarios follow].

In my previous post, I quoted many ex-staff members who felt obliged to lie. Something similar crops up here. ‘Staff appear to be discouraged from raising any concerns about the operation of ABC Learning centres outside the company itself.’ The report goes on to suggest that since so much public money is paid to these centres, then the public has a right to know what’s happening in them. They conclude, wisely in my opinion, that the government ‘should consider the wisdom of allowing any further expansion of corporate chains in the long day care sector

It’s a detailed paper and I suggest you look at it, if you’re interested in the subject. It reports that ‘children are secondary to concerns regarding efficiency and cost-containment’, and warns that if there is pressure on the share price – as there is now - these strictures will tighten.

You may wonder, where did this all start? Who let the dogs out? Well, perhaps you can guess.

In 1997’, quoting Kirby, ‘the Howard Government scrapped special subsidies to non-profit child-care centres and in a single stroke, child care was changed. Privately owned and non-profit child-care centres could charge roughly the same fees. Now… the reality of a privatised child-care sector is hitting home.

I couldn't sleep at night if one my centres was not up to scratch – Eddie Groves.

~ eddie groves' evil empire
~ an exercise in physiognomy
~ the sweet death knell of ABC Learning

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dysthymiac said...

"The board of directors 'must act in the best interests of the company as a whole’ with their main task being to drive the performance of the Company - ABC Learning Annual Report 2004" ... and also Telstra, The Commonwealth Bank, every privatised Utility supplier, etc etc.
Origin and OPTUS both owned by Singapore, TRU is owned in Texas, USA, and only god knows who owns AustraliaPost franchises anymore; but I am old enough to recall when all the above services were government owned for the facility of The People and there was a degree of Responsibility and Accountability.

A board-meeting in Asia could bring Australia to it's knees overnight, however much we spend on the ADF (2.4% of our GDP)

Bwca said...

and a day later the ews is
"ABC Learning founders Eddy Groves and his wife Le Neve have separated, and are under renewed pressure ... "

why am I cynically guessing this is like John Elliott (and others)separating from his wife right before he lost all his money?

... because stuff is in HER name that cannot then be sold for creditors. call me crazy.

Sam Sejavka said...

Oh yes, I'm sure you're right. I doubt that the Groves haven't planned for their demise. Even if it's legal, it must feel criminal to heartlessly exploit toddlers. All their Liberal friends are out of power now too, and they may be scared of being brought to account.

Today - whether willingly or not - most of his personal shares were sold [he has about 3,000 left] - and all those of his wife.He's sold a few of his properties too and maybe the basketball team [bought with money that could have gone on better lunches].

In the business pages, they never suggest that what he does is parasitic and wrong, that this may have something to do with people selling shares ... There's such a gulf, isn't there, between real life and the money-makers?

[I've been reading that ABC are trying to do the exact same thing in Canada too, where they call it 'Big Box' childcare, and describe his techniques as the 'Walmart Model']