Add Category
Within weeks of being informed that nine-month-old baby Ada Coen had a severe egg and dairy allergy, an educator at her childcare centre in Melbourne fed her yoghurt.
In August 2022 after undergoing specialist testing, Ashlea Coen emailed her daughter's childcare provider, a Guardian early education centre in Melbourne, an allergy action plan.
Ashlea says she also handed in a hard copy of the plan to the front desk, and personally spoke to two educators about Ada's allergies.
In an email seen by 7.30, the centre confirmed in writing that it was already egg-free and would ensure Ada was not fed any dairy products.
Guardian Childcare and Education is a national chain with 150 locations.
"We just trusted that they knew what they were doing, and they put all of the procedures in place to protect her," Ashlea told 7.30.
She was working from home when the call came through.
"The lady said, 'Oh, Ada's been fed a teaspoon of yoghurt and she seems to be reacting. We don't really know what's going on. Does she have an allergy to, to dairy?'" Ashlea recalled.
The phone call led Ms Coen to believe that staff weren't trained to enact Ada's treatment plan, which included administering adrenaline via an EpiPen, and calling an ambulance.
"In the car on the way there I was on the phone to the ambulance. We turn up to the centre and walk into her room — we were very confused that they were sitting her on the lap and not really doing anything," she said.
"She was really red, and her eye was all swollen. And I could hear that she wasn't breathing very well. She had rapid breathing and it sounded very wheezy."
The impact had been rapid — Ada's little body had gone into anaphylaxis.
The life-threatening condition can restrict or even block the airways.
"When you're going through those moments, you're kind of in survival mode. At that point in time, all I cared about was her surviving this," Ms Coen said.
After two shots of adrenaline and a night in hospital, Ada recovered and the family returned home.
It was then that Ashlea discovered a voicemail message left on her phone by an educator the previous day as she had made her way to the childcare centre.
The voicemail said: "Hello there Mummy. Now we've given her a Telfast [antihistamine] because you know actually her reaction is not very, very serious … just a little bit sneeze so we try to give her a Telfast. Can you please call us back? Thank you."
"Hearing that voice note of her saying that her symptoms weren't serious and she's just sneezing a little bit, versus walking into the centre and seeing how unwell she was — that was quite disturbing," Ashlea said.
7.30 put detailed questions to both Guardian Childcare and Education, and the Victorian Department of Education, as the regulator of child care in the state. Neither responded.
Signs of neglect
In late 2023, a new player listed on the Australian Stock Exchange.
Nido Education has become the second-largest listed operator in the industry, and is already up to 52 centres and has 30 more under construction.
In the middle of last year, Melissa Dias-Harrison enrolled her son at a brand-new Nido in greater Perth.
"We noticed the problems straight away," Ms Dias-Harrison said.
"Issues with his clothes being wet, and him smelling like he hadn't been cleaned properly. There were several times he came home with a soiled nappy that hadn't been changed for hours as far as we could see.
"It was difficult to be close to him. We'd have to put him straight in the bath immediately."
She also noticed her son was coming home with injuries, some of which had no explanation.
"He would have bumps and scratches, he had a couple of bumps on his head even, and there would be no incident reports [and] people wouldn't know what would have happened," she said.
"We'd get notifications a couple of times a week that another staff member was leaving and another staff member was leaving.
"Every day we'd come in there would be a different staff member in the room, and we wouldn't know their name and they wouldn't know our son's name."
Melissa emailed her concerns about conditions at the centre to the Nido area manager, as well as head office.
A local manager replied via email: "I appreciate there are a lot of new faces around the service, which are new to the team, members of our sister services or agency staff."
The head office deferred to the local manager. Dissatisfied with their responses, Melissa withdrew her son after just six weeks.
Targeting 'low to middle income areas'
In a November 2023 presentation to investors, Nido executives explained their services were designed to "fit comfortably in Toorak" and were "built to be the best in their markets".
It described itself as "high occupancy, and high profit" — meaning, it aimed to operate centres that were running with the highest number of enrolments.
Nido explained to investors the strategy behind its locations.
"Nido's business model is to locate services where there is a high worker population in low to middle income areas," the presentation said.
"Typically in these areas both parents have to work in order to meet the costs of living.
"In this example, with an 85% CCC (childcare subsidy), parents pay 15% of the daily fee."
7.30 contacted Nido with detailed questions about its business model and about the experiences of Melissa Dias-Harrison's family, but it did not respond.
Lisa Bryant is a childcare policy expert and has worked as a consultant to local councils running not-for-profit childcare centres, as well as for-profit businesses in the sector, for more than 20 years.
She says the problems in the industry have little to do with a lack of policy or regulation.
"They have people working away in their back offices creating the most perfect policies. But there's a difference between having a policy and having it implemented on the ground," Ms Bryant said.
"Keeping children safe is really expensive, and profits depend on keeping things very, very cheap.
"The things that we know keep children safe is having a lot of staff, really experienced staff, and really highly qualified staff. Whereas in the last few years that's not what we've got as that drive to make profits has intensified."
There is huge money at play in the childcare industry, and about 70 per cent of operators exist on a for-profit basis.
A growing section of the market is backed by private equity firms or are listed companies — and what's making the sector alluring to investors is the promise of government subsidies.
Profit margins as high as 50 per cent
"For real estate investors and developers, building childcare centres and then being landlords of childcare centres are very attractive. It has the underlying guarantee from the government funding that there will be an income flow in the manner of rents," Gina Cass-Gottlieb, chair of the ACCC, said.
"It also has, in the case of childcare centre providers, tenants of good standing so that it delivers, importantly, on a well-placed foreseeable income flow."
Ms Cass-Gottlieb said it would be "very difficult" to return to a blank page and rewrite the composition of the sector.
"This is why we have proposed continued close monitoring and the credible threat including power for there to be price intervention," she said.
Federal Minister for Early Childhood Education Anne Aly acknowledged the not-for-profit sector was delivering better outcomes for the community and taxpayers.
"The ACCC review has found that the not-for-profits do deliver better quality, and at a lower price. [And] this is where and this is why we need to reform the sector," Ms Aly said.
The inquiry also found that while some centres were struggling to stay afloat, others were generating profit margins as high as 50 per cent.
While the report confirmed that the latest boost to the childcare subsidy did reduce out-of-pocket costs for families by about 11 per cent, it found that in the past services had consistently raised their fees, which subsumed additional government funding within a year.
Ms Aly acknowledged that was the case.
"The behaviour of the market results in increased fees that eventually can undo some of the benefits of increasing the childcare subsidy," she said.
7.30 approached the two main childcare industry groups that represent private operators in the sector. Both declined to be interviewed.
The minister told 7.30 the government was working to reform the sector.
"There is a lot of work to do," Ms Aly said.
"I do not shy away from that. And I do not disagree that we have work to do to ensure that parents' expectations of quality and safety when they send their child to early childhood education and care are met."
If you're unable to load the form, you can access it here.
Watch 7.30, Mondays to Thursdays 7:30pm on ABC iview and ABC TV