The profit motive is a great thing in the right industry.

But long ago we worked out that education wasn’t one of those industries. There is no profit motive driving school education in Australia.

Private schools in Australia are non-profit. They are run by school boards that are supposed to be focused on providing the best education for their students.

How does the government keep the for-profit sector out of school education? A for-profit school is ineligible for government funding.

We need to do the same for childcare.

The only priority of childcare providers should be the children in their care. They should not be distracted by the idea of keeping their shareholders happy.

The government is rushing its childcare changes through Parliament. It will use threats of funding cuts to ensure improvements to safety standards.

It’s a good move. Money talks in this industry.

But the heartbreaking stories out of Melbourne in recent weeks, which are driving these changes, could be a catalyst for significant long-term change.

Australia’s childcare industry is dominated by for-profit providers. They make up 70 per cent of the childcare industry, and 95 per cent of the growth in the industry is in the for-profit centres.

The expansion of government subsidies means that a childcare centre in the right urban location is a licence to print money.

This is not to say that there are no for-profit providers providing high-quality services that have the welfare of children as their absolute priority. But the billions of dollars that the government is pouring into the sector attracts all sorts.

There are all kinds of information problems that can be exploited to wring extra profit out of childcare.

The consumers, young children, are not able to judge the quality of the service or effectively communicate what is happening. This makes it hard for parents to judge the quality of each service and even harder to know when profit-motivated providers are cutting costs.

And childcare has become big business in Australia.

The big providers are companies worth hundreds of millions of dollars who pay their CEOs seven-figure salaries.

Childcare centres have changed hands for millions, with sales in 2024 reaching almost a $1 billion.

We have to take the money out of childcare.

But if we cut government funding to for-profit providers, which make up 70 per cent of the industry, won’t that just make it impossible for parents to find childcare?

That is a problem that can’t be fixed overnight.

The government’s changes are designed to clamp down on dodgy providers and create more transparency to expose workers who are doing the wrong thing.

But to really fix this problem, over the longer term, childcare centres need to be converted from for-profit to either non-profit or government-owned.

The government doesn’t need to reinvent the wheel here. It should look to primary and secondary schools as the model of how to provide vital education and care to the youngest in our community.

In almost every suburb there is a local government-owned and run primary school. The same should be true for childcare centres.

These centres could even be co-located with those primary schools where it is practical to do so.

By incorporating childcare into the school system, the industry can be professionalised and provide real career paths for childcare workers. This would stabilise employment in the industry, which, at the moment, is plagued by casual, short-term, insecure work.

As a society, we don’t think it is appropriate for schools to make profits. There is no reason why childcare shouldn’t be the same.

Our youngest children deserve the best possible start in life, and that is not going to happen when providers are focused on making a profit.