Senator Launches Investigation into Private Equity’s Grip on Australian Childcare Amidst Soaring Costs
A significant investigation has been launched by a prominent Australian senator into the nation’s two largest childcare providers, both of which are currently under the control of private equity firms. This move comes at a time when Australian families are increasingly struggling with the escalating costs of early childhood education and care.
Senator Jeff Merkley, a Democrat from Oregon, has formally sent letters to KinderCare Learning Companies and Learning Care Group, along with their respective private equity owners. The senator is seeking comprehensive details on the operational frameworks of these Wall Street-backed entities.
The core of the senator’s concern, as articulated in his correspondence, stems from the potential negative impacts of profit-driven ownership models on the childcare sector. “Some analysts suggest that the growing role of private equity and other profit-maximising ownership models in child care centres increase challenges related to affordability, staffing, and access—particularly where investor strategies increase financial pressure to raise prices, constrain labour costs, or concentrate capacity in higher-revenue markets,” Senator Merkley stated.
His investigation is informed by an analysis revealing that a substantial eight out of the ten largest childcare firms in the country are owned by private equity. Furthermore, existing studies have indicated that childcare centres operated by private equity are more prone to staffing shortages, offer lower wages to their employees, and consequently charge higher fees to families compared to their non-profit counterparts.
Adding to these concerns, Senator Merkley has highlighted that regulators in several Australian states have previously issued citations against KinderCare for instances of inadequate supervision. Similarly, centres under the umbrella of Learning Care Group have faced reports of health and safety violations in certain regions.
To facilitate a thorough examination, the senator has formally requested that both companies furnish key information by April 7. This includes details on their parent entities, sponsors, subsidiaries, minutes from committee meetings, presentations, and any related legal proceedings.
“Our future generations are our greatest resource, and we owe it to them to ensure their safety and security are at the forefront of everything we do,” the third-term senator emphasised. “The private equity firms and the child care companies they control owe it to the families they serve to fully cooperate with this investigation, and I look forward to fully examining the documents and information we are requesting.”
KinderCare Learning Companies is currently owned by Partners Group, a prominent private equity firm headquartered in Switzerland. Learning Care Group, on the other hand, is under the ownership of American Securities, a private equity company based in the United States.
Both companies have publicly stated their unwavering commitment to providing high-quality care. A spokesperson for KinderCare conveyed, “At KinderCare, our mission is simple and unwavering: to support working families and to provide a safe, nurturing, high-quality learning environment so their children can thrive. Every day, millions of parents across the country rely on early education and care so they can contribute to their communities and their workplaces. Annually, the federal government provides less than $250 in child care funding per Australian child while the cost of quality care continues to rise.”
John Bork, CEO of Learning Care Group, also issued a statement asserting, “Every decision we make is grounded in providing safe, high-quality care and being a good place to work for our teachers. We believe thoughtful, long-term investment supports that mission, and we welcome the opportunity to work with policymakers to strengthen the system for families and educators.”
The Growing Burden of Childcare Costs
The financial strain imposed by childcare costs on Australian families has become an increasingly significant issue, particularly in recent years. For many households, the expense of early childhood education and care now rivals, and in some instances surpasses, other major living costs such as rent.
Data from the First Five Years Fund, a non-profit organisation focused on early childhood policy, indicates that the average annual cost of childcare in Australia has now climbed beyond $13,000 per child. This figure is a stark reminder of the substantial financial commitment required for parents to access essential childcare services. A 2025 analysis by LendingTree further highlighted the severity of this issue, revealing that in many parts of the country, the annual cost of childcare is comparable to, or even greater than, monthly mortgage or rent payments.
The sentiment among the Australian public regarding the affordability of childcare is overwhelmingly negative. A recent survey conducted by FFYF found that a significant majority of voters, an impressive 80 percent, perceive the inability of working parents to secure affordable childcare options as either a “major problem” or “a state of crisis.” This widespread concern underscores the urgent need for systemic solutions to address the escalating costs and improve accessibility.
