The Federal Opposition is calling for a proposed merger between two out of school hours care providers to be scrapped.
- Camp Australia looking at merging with school care provider Junior Adventures Group
- If the merger were to go ahead, US-based Bain Capital would control about a quarter of the market
- Labor opposes merger, lodges a submission to the ACCC
Camp Australia, which was recently acquired by the US-based investment firm Bain Capital, is looking at merging with before and after school care provider Junior Adventures Group, which operates about 400 sites around Australia.
If the merger were to go ahead, Bain Capital would control about a quarter of the market.
The Australian Competition and Consumer Commission is reviewing the proposal.
Labor is opposed to the merger and, in a rare move, has lodged a submission to the ACCC.
Opposition spokeswoman for early childhood education and development Kate Ellis said she had several concerns about the proposal.
“This is all about an overseas hedge fund getting access to government subsidies and parents’ fees on an unprecedented scale,” she said.
Ms Ellis warned the merger would drive up costs for parents.
“Where these for-profit, privately-owned providers have stepped in previously, fees have on average been higher and the quality of service that’s been delivered has on average been lower,” she said.
Labor is also concerned about one provider being in control of such a large share of the market.
Ms Ellis said she did not want to see a repeat of the ABC Learning collapse, which would leave thousands of working mums and dads in the lurch.
“If we have one foreign-owned for-profit provider controlling so much of the market place, then there is a huge risk that if anything happened to that provider, it would be disruptive to our education system but also to our national economy,” she said.
Parents could be forced to pull kids out of care: peak body
Her concerns are supported by the peak body representing the before and after school care sector, the National Out of School Hours Services Alliance.
Spokeswoman Robyn Monroe Miller said parents could be forced to pull their kids out of their care.
“Latchkey kids were very popular in the 1970s. Is this what we are going to have to return to?” she said.
Responding to questions about fees, Bain Capital said in a statement that schools select providers “following a tender or contract process”.
“Prices are part of that tender process, which means schools have a say on pricing when they select the provider,” it said.
“There are also regular opportunities for review.”
ACCC to consider impact of merger: Government
A spokesman for the Department of Education and Training said the Government has not made a submission to the ACCC.
“It is the role of the ACCC to consider the effect that the proposed merger will have on competition in the market,” they said.
But Ms Ellis said she did not agree and is turning up the political heat.
“The Government should have a view on what is the big picture,” she said.
“It would be unthinkable for us to think about any part of our education system being run like this.
“We would not have for-profit, foreign-owned hedge funds controlling so much of our education services.”
The ACCC will announce its final decision or release a Statement of Issues by the end of the month.