Investigation Shows Private Equity Has No Place in Childcare

A media investigation into Australian private childcare centers reveals how private equity ownership is compromising child safety and care quality. The ABC News investigation exposes systemic issues at Affinity Childcare centers including disturbing videos of child abuse, over 1,700 regulatory breaches, and chronic understaffing.

Former Affinity employee Loretta Dodwell, who worked at a centre in Queensland, said "The cost cutting and the lack of staff really caused serious incidents in the centre… They are just not suitable to be in the childcare industry because they are just so greedy.”

Affinity Childcare was acquired by Private Equity firm Quadrant in 2021 and quickly expanded to over 250 centres. The deteriorating conditions described by staff follow a pattern documented in PSI’s recent "Privatisation Playbook" which examines the costs of private equity's growing control of childcare for children, families and staff around the world.

Emeline Gaske, National Secretary for the PSI affiliated Australian Service Union said: “Early childhood education and care should be about children’s development, not corporate profits. When services are driven by the bottom line, quality, access, and affordability suffer. Families need affordable, well-resourced care, but for-profit providers too often put shareholder returns ahead of community needs. That’s why many local councils have stepped in as providers of last resort, running childcare and even health services when no one else will. These communities cover the financial cost, because the alternative is leaving families without the essential care they need."

The revelations about Affinity care centers come as governments worldwide are looking to expand childcare funding. PSI General Secretary Daniel Bertossa said "Without stronger regulation and public alternatives to private provision, we risk pouring public funds into the pockets of private equity partners at the expense of children and workers. The evidence is clear: we can not trust private equity firms with the care of our children."

PSI's Privatisation Playbook documents how private equity firms have deployed similar tactics across countries - from the United States to the United Kingdom and Australia - to maximize returns while minimizing spending on staff, facilities and compliance. PSI and our affiliates are calling for:

  • An end to private equity ownership of childcare services

  • Mandatory staff-to-child ratios and legislate for future workforce planning

  • Better pay and workplace conditions for childcare workers to retain quality staff

  • Support staff with access to further training and qualifications 

  • Stronger regulatory powers and enforcement

  • Expansion of public childcare provision

Bertossa said "We cannot keep gambling with children's safety and development by leaving essential care services at the mercy of private equity firms."