How neoliberalism betrayed the children of Australia

The last forty years have taught us that neoliberalism and privatisation of social services doesn’t work, and it’s time to rebuild what does work.

Photograph: Alex Craig.

The recent revelations of child sexual abuse at two early childhood education centres in Melbourne have exposed far more than individual acts of harm – they have revealed a sector in crisis and a system that has been allowed to decay under the demands of profit motives and privatisation. They are symptoms of a deeper, systemic problem that comes from four decades of neoliberal ideology that has hollowed out public institutions and replaced them with the demeaning and impersonal logic of the market, which costs everyone a great deal more in the long term.

Early education, once seen as a vital public good, has become a vehicle for private profit – it’s a sector dominated by corporate operators and shareholders who measure success not by the wellbeing of children, but by quarterly returns and healthy balance sheets. And we’re now seeing the result of this: unqualified staff, poor oversight, relentless cost-cutting, and a culture where safety and care of children are secondary to the profit motive. This isn’t just mismanagement – it’s an abject moral failure and it’s the young children who are paying the biggest price.

Since the 1980s, fuelled by the free-market philosophies of Ronald Reagan in the US and Margaret Thatcher in Britain, governments around the world – including Australia – began treating essential social services like commodities. Under the catchphrases of “efficiency” and “choice”, early childhood education, aged care and health were progressively deregulated and opened up to private providers, and public accountability was cast aside in favour of competition and the needs of investment bankers. But after many years of this failed experiment, the results are clear: fees have exploded, the quality of care has declined, staffing shortages are chronic, and the most vulnerable in our society are left at the mercy of these failing systems.

Neoliberalism promised more for less, but has instead delivered less for more. And yet, even as the cracks widen, there remains a reluctance to admit to this failure, essentially, because both the Coalition and the Labor Party have been a big part of this failure in Australia. The political class insists the system is too far gone to repair, that public ownership is an unrealistic fantasy, but this kind of thinking just preserves a broken system. The reality is, that these services already rely overwhelmingly on public funding. In many cases, governments are paying between 60 to 90 per cent of the costs – yet they continue to hand over control and profits to private operators. It’s not about affordability: it’s about the political will to make the substantial changes that are needed. If the public already is footing most of the costs for these services anyway, why shouldn’t the public regain control?

This isn’t a nostalgic call for a return to public ownerships just for its own sake: it’s a call for re-establishing the principle that essential services – those that safeguard children, support the elderly, educate the next generation, and look after the sick and unwell – shouldn’t be run for profit. It’s the foundation of what we’d expect from a decent society.

But the corruption of these services goes deeper than just funding models. The public service itself has been gutted and outsourced to the ‘Big Four’ consultancy firms – KPMG, PwC, Deloitte, EY – whose interest lies not in service delivery but in perpetuating their own influence and contracts. Politicians have grown complicit and, in the case of many Liberal Party MPs, handsomely rewarded, unwilling to challenge a system that keeps them comfortable. The result ends up being a government that no longer governs, but contracts; a service that no longer serves, but exploits. While the Labor government has attempted to slow down the external contracting that was prevalent during the era of the Coalition government, there is still a massive amount of outsourcing of services that should be performed internally by government.

And there’s just too many examples of the failures of privatisation or applying market philosophy to the management of essential services: early childhood education in disarray, the university system has been transformed into a debt machine for many graduates, private schools are raking in public funds to build luxury facilities while public schools scrape together money with cake stalls. Aged care homes where neglect and abuse are systemic, health systems buckling under cost pressures, and mental health support are practically inaccessible unless you can afford to pay. This isn’t efficiency – it’s theft: it’s known as neoliberalism, but it really is a con – a very old con, played on the public with devastating consequences. And people are starting to see right through it.

How profits hollowed out early education

At the heart of early childhood education in Australia lies a basic misunderstanding – one that has been nurtured and entrenched by decades of policy shaped not by the needs of children, but by the economic demands of neoliberalism. Over the past 30 years, early education has been treated as little more than a warehousing function – a convenient solution for working parents, a productivity tool, a child-minding service, or the insulting term of ‘baby-sitting’. This view has clouded policy thinking, especially from conservative governments, whose approach to early learning has typically revolved around workforce participation and economic output, rather than a meaningful engagement with the developmental, social, and educational importance of the early years.

When the Coalition was last in government, this philosophy was embedded with their “Jobs for Families” package – early learning was not framed as an educational right or a public good – it was repackaged as an economic imperative.

Labor has acted differently in government, moving towards universal access, better educational outcomes, and a higher quality of care. However, even with these changes and ambitions, the system is still highly based around market principles and private provision, and a lot more has to be done to undo the structural damage initially caused by neoliberal thinking and privatisation.

Early childhood was not just a collateral victim of privatisation – it was a litmus test for the conservatives. In 1997, the Howard government essentially used the early learning sector as the laboratory to trial a model it ultimately wanted to roll out across all levels of education: a de facto voucher system. The basic idea borrowed heavily from Thatcher-era reforms in Britain – give families a fixed amount of public money and let them choose where to spend it on educating their child, whether on public or private providers. While the principle might seem democratic and empowering for parents, in practice, it’s exclusionary, regressive, and works against the values of equity.

The Australian version of this model operates in early learning under the guise of subsidies and rebates, but the outcome is pretty much the same – public money flows into private hands, and the more money a family has, the more they can “top up” their child’s care or education. The voucher system was never about equality – it was about engineering a move away from public services. The goal wasn’t to make education better overall; it was an attempt to make public education a safety net.

The myth of the market in social services – that only the strong survive – is exposed by this contradiction. What survives is not what serves the public, but what serves the private investor. And those left behind are the early childhood workers scraping by on poverty-level wages, the overworked teachers in underfunded public schools, and the university academics forced into precarious contracts. The real winners are not the educators or the students – they are the corporate landlords of education, the consulting firms, and the private owners who treat social services as a revenue stream.

The logic (or illogic) of privatisation needs to be reversed. Education, from the early years through to tertiary learning, is a social investment, not a market. Until that truth is reinstated at the heart of public policy, the system will remain broken, no matter how many subsidies are offered to paper over the cracks.

Public ownership is the only way forward

After the failures of neoliberalism, the question is not so much about whether privatisation of essential services has failed or not – it has – it’s how long we’re willing to continue pretending that it hasn’t. All the signs for government are there: rising costs, falling standards, widespread dissatisfaction, and an overwhelming sense that these services – early education, health, aged care, transport, electricity, water (and let’s not get started on gas) – are no longer accountable to the public they are meant to serve. Instead, they have been repurposed to serve investors, shareholders, and consultancy firms. The model is broken and the system is broken. And for too long, we’ve been told that nothing can be done to change it. But it can be changed, and it has been changed – in other countries and right here in Australia.

Governments around the world have already started reversing the trend of privatisation because they are slowly realising that it doesn’t work. In Britain, France, Germany, Sweden and Argentina, essential services that were sold off in the name of efficiency and cost-saving have been brought back under public or community control. These decisions weren’t made out of ideology – they were made out of necessity and to end a system that wasn’t working. The private model, in too many of these countries, simply didn’t deliver. And the public, after being treated like consumers for decades, has finally started to push back.

In Australia, we had our own example of buy-back in 2008 with the collapse of ABC Learning – the world’s largest publicly listed childcare corporation at the time. It didn’t just fail – it imploded – and thousands of families were left stranded, early learning centres were closed overnight, and the illusion of market stability in early education disappeared. The private market had promised professionalism, scale, and innovation but, instead, it delivered a crash.

The Labor government of the time established Goodstart Early Learning, a not-for-profit consortium that rescued hundreds of these ABC Learning centres from collapse. Goodstart still operates today – and it remains one of the largest providers of early education in the country and, most importantly, it does so without the drive for shareholder profits. Its focus is service, quality, and community – not market expansion. Certainly, it isn’t a perfect organisation – no organisation is – but it is proof that alternatives do exist. And it also proves that community and public ownership is not some utopian socialist fantasy – it’s already here, and it works.

Of course, reclaiming essential social services won’t be simple. There will be costs, transitions, disruptions. Buying back assets, rebuilding public capacity, retraining and rehiring staff – all of this requires money and long-term planning. But the cost of keeping things as they are is far greater. And the public is already paying – through higher fees, reduced quality, lower wages, social fragmentation, and the human cost of neglect. Continuing on the current path is not much more than throwing good money after bad.

This isn’t about taking backward steps – it’s about reclaiming what was always meant to be shared. Water, energy, education, health, transport – these are not luxuries to be sold off, nor opportunities for corporate gain – they are the lifeblood of a functioning society and, they belong to all of us. The public already knows this and they sense that something has gone horribly wrong with privatisation over the years. And they’re ready for change.

It’s governments that are lagging behind and it really is time for bold, collective action. The last forty years have taught us that neoliberalism and privatisation of social services doesn’t work, and it’s time to rebuild what does work. And it’s not just for us – but for the generations to come.