Childcare is undergoing a 'reckoning' but safety gaps remain

When Christina Spark toured Little Zak's Academy in the Sydney suburb of Gladesville early last year, it seemed like the perfect place to enrol her one-year-old.

"The playground was shiny, they had soccer and yoga and swimming," she said. "I was pretty blown away and amazed."

Within weeks, Spark started to notice hygiene issues, dietary instructions not being followed, her little boy's milk bottle coming home unused and babies sitting in soiled nappies.

"The underlying problem was just a lack of supervision … and not enough people," she said.

Then the incidents started to pile up. One bite turned into two and by October her child, now 19 months old, had been bitten five times.

After months of mounting concerns, Spark pulled her son out and used her skills as an auditor to dig into the centre and the chain behind it.

"If I just looked up who owns the centre, done a little bit of digging, realised the number of enforcement actions, realised the level of profits being generated, I wouldn't have sent him there, but I just didn't know," she said.

Little Zak's is one of the country's fastest growing childcare chains, generating $142 million in revenue and $17 million in profit in 2025.

The family-owned business also has the highest proportion of centres subject to enforcement action among the country's 26 largest long daycare operators.

'It's child abuse'

At the Little Zak's centre at Shellharbour, two hours south of Sydney, the warning signs had been building for months.

Leigh Cotter said he initially blew off the incidents as kids being kids, but when they started to escalate, he raised concerns.

"I said, 'Look, you guys really need to do something about the safety of kids, because if you don't, something serious is going to happen.'

"A month later, my son broke his leg in daycare, and I don't think they were completely honest about how it happened."

Cotter said the centre told him his son was wearing socks indoors and had slipped and hit his head and left ankle just before pick-up.

When he took him to the hospital, the doctors discovered a spiral fracture on the other leg, running from his ankle towards his knee.

Cotter said an educator later told him his son had been screaming in another room much earlier in the day, but staff had not realised he was seriously injured.

"Six hours of walking on a broken leg — it's child abuse," Cotter said.

Four Corners put the claims to Little Zak's but it did not comment for privacy reasons.

Since Cotter pulled his son from Little Zak's Shellharbour in May 2023, the centre has faced repeated parent complaints and regulatory action.

In the past two years alone, it has been subject to four enforcement actions, including an emergency action notice over staffing ratios, which is the minimum number of educators legally required for the children in care.

In August, regulators issued a further compliance notice.

The centre has also been downgraded from Meeting the National Quality Standard to Working Towards, which means it is no longer meeting the nationally agreed upon standards for child care.

Gabrielle Meagher, an emeritus professor at Macquarie University, has spent decades researching privatised social services including childcare.

Her analysis of the country's 26 largest long-daycare providers found the proportion of Little Zak's centres subject to enforcement action was 10 percentage points higher than the next highest, Edge Early Learning, which entered voluntary administration in August.

Meagher says 56 per cent of Little Zak's centres are recorded on Starting Blocks as having been subject to enforcement action in the past two years.

She says the chain has experienced rapid expansion. The family-owned company grew from 16 centres in 2021 to about 43 today.

A deeper analysis of regulatory records reveals almost 600 confirmed breaches of Little Zak's centres by the regulator between 2020 and September 2025, with 181 of them linked to inadequate supervision, inappropriate discipline and failures to protect children from harm and hazards.

At September 2025 staff turnover was 79 per cent, which is equivalent to almost eight departures for every ten employees in its average workforce over the year.

Childcare sector faces 'reckoning'

But the problems uncovered at Little Zak's are not isolated.

Four Corners has analysed thousands of regulatory records from across the sector, examined internal company documents, spoken to parents and educators and obtained CCTV as part of an investigation into child safety across Australia's $23 billion childcare sector.

It has uncovered serious failures at some major operators and examined the gaps that remain despite sweeping government reforms.

ABC Investigations has been uncovering systemic failures in childcare for the past 18 months.

Early Childhood Education Minister Jess Walsh says those stories have had a profound impact on the sector.

"There has been a reckoning in this system over the past 12 months, and it is changing in no small part because of the way in which you have shone a light on the problems in early learning," she said.

The revelations have triggered a series of reforms including tougher penalties, mandatory child-safety training, a national worker register, tighter Working With Children Check requirements, greater powers for regulators and new powers to cut Commonwealth childcare subsidies to poorly performing providers.

"The reforms that we have put in place are the right reforms," Walsh told Four Corners.

"They are on track, and we are seeing the results of those reforms."

So far, 120 services with a history of failing to meet quality and safety standards have been put on notice to improve or risk losing access to Commonwealth subsidies. To date, funding has been withdrawn from 12.

More than 1,300 childcare services are currently failing to meet the national quality standards, accounting for around 48,000 childcare places. About 350 have failed twice in a row and can go on average more than three years between assessments.

"Around half of the services that we have put those conditions on have turned around and have met the quality standards," Walsh said.

"That is what we would like to see, but where they fail to do that or refuse to do that, we are clear that there is no place for those services in early learning."

But a year into the funding crackdown, some big operators with regulatory issues have not been caught by it.

None of Little Zak's centres are on the list, despite a regulatory record spanning dozens of centres and hundreds of confirmed breaches including failures involving supervision, staffing ratios and protecting children from harm.

Little Zak's said it had restructured its executive management team, including replacing its CEO, and that its focus was the health, safety and wellbeing of children in its care.

It said notifiable incidents and compliance breaches were down following increased investment in staff training and more open communication with families.

"Our focus is on quality and safety in our existing services, not on growth," it said in a statement.

Only About Children (OAC), which is owned by US-listed Bright Horizons, isn't on the list either. In the past two years, more than one in four of OAC's centres have been subject to enforcement action, including for inadequate supervision of children.

In April, OAC's Mosman centre on Sydney's north shore entered into an enforceable undertaking after a child was subjected to inappropriate conduct.

In August, enforcement action was also taken against two OAC centres in Victoria. Brunswick West was cited for inadequate supervision and failing to protect children from harm and hazards.

Coonans Hill was cited for a much broader range of breaches, including inappropriate conduct, inadequate supervision, staffing arrangements, protecting children from harm and hazards, interactions with children, and safety and record-keeping requirements.

"They've got 78 services, and of them, 21 have had enforcement actions against them in the last two years, which is 27 per cent of them, more than a quarter of their services," Meagher said in September. One centre has since been closed.

"That's quite a high number, and it's more than twice as many as the largest not-for-profit."

The public record tells only part of the story.

Four Corners has seen previously secret regulatory records, parent complaints and internal documents detailing thousands of incidents across its centres, including children going missing, serious injuries, failures of supervision and allegations of children being grabbed, dragged and forcibly restrained.

OAC's Williamstown centre in Melbourne's inner west has its own troubling history. Alleged paedophile Joshua Brown, who was committed to trial on 156 charges, worked there in 2020 and 2021, and police have since identified alleged victims from his time at the centre.

In the past two years Williamstown has also faced two enforcement actions. In July, it was breached for failing to protect children from harm and hazards, as well as breaches of health, hygiene and safe food practices. In September its quality ratings were slashed from exceeding to "working towards", which means it failed to meet the national quality standards.

The Williamstown centre is slated to close next year and its website says it isn't taking any new enrolments.

OAC said in a statement that child safety was its highest priority, that it had a strong reporting culture and acted quickly when problems were identified.

It said more than 97 per cent of services were meeting or exceeding the standards. Services facing enforcement action were down 20 per cent.

For-profit providers still dominate

The Commonwealth has begun using its new powers against some major operators. One is Edge, which has 59 centres across Australia.

"We had very serious safety concerns about that provider," Walsh said. "Since then, we know that Goodstart Early Learning, which is a large quality not-for-profit provider, is in discussions with the administrator to take over some of those services. We're supporting them in that," she said.

Walsh said the Commonwealth had also stopped two large providers from expanding until safety concerns were addressed. One was Edge. She would not name the other.

While experts and advocates say the reforms will make childcare safer, they warn they won't fix the deeper structural problems in a sector dominated by for-profit operators.

Georgie Dent, from parent advocacy group The Parenthood, says until the funding model is addressed, little will change.

"I think if we look at the money that is being spent on early education and care from taxpayers via the childcare subsidy to the tune of $16 billion a year … and you look at the out-of-pocket costs that parents are contributing, which is billions and billions of dollars, and you think for the exponential increase in investment, what are we getting?" she said.

"Are we seeing better outcomes for children? Are we seeing better access? Are we seeing better quality services? The answer is no, we're not. Not at scale, not across the board."

She says the problem is not educators or every childcare service, but a funding model that she argues creates the wrong incentives.

"It means our system is not delivering on the objectives of best meeting the needs of children and enabling parents to participate in the workforce," she said.

"Providers have set up in areas where they can charge higher fees. They are far less likely to go and set up in a regional town."

The Commonwealth is trying to change that. Its $1 billion Building Early Education Fund will support up to 160 new or expanded services, with a focus on not-for-profit provision in areas where childcare is scarce.

"We do want to see more quality not-for-profit services out there and we're backing that to happen," Walsh says.

But in a sector plagued by childcare deserts, with one in four Australians living in areas where demand outstrips supply, rolling out 160 new or expanded centres will hardly make a difference.

Dent argues a much bigger shift is needed.

"Over 70 per cent of long daycare in Australia is now delivered by for-profit organisations, and that has come at the expense of not-for-profit and community organisations, notwithstanding the fact we know that not-for-profit and community services tend to have higher quality ratings," she said.

In Melbourne's north, parents are fighting to save Merrilands Uniting Early Learning, a not-for-profit long daycare centre that signalled it would close before the end of the year after three for-profit centres opened in the area since April.

"There are [now] six for-profit centres in the area and another one being built that's due to open next year," said one mother, Erica. Another mother, Etta, said one of the reasons she sent her child to Merrilands was that staff had been there for a long time.

"A lot of them [have been there] decades," she said.

"It was just full of heart. There was a lot of warmth in all the staff," said Nikolas, the father of another child.

Non-profit childcare services operate under a different model with any surplus reinvested back into the centre. They are generally cheaper for families, employ more highly qualified staff and perform better on national quality standards. But they are losing ground as for-profit childcare expands.

One of the parents who sends their child to Merrilands, said the difference could be as much as $70 a day.

"The financial impact is … huge," said one mother, Eman.

For Eman, however, she chose a community-run centre mainly for reasons of safety.

"For me, the deciding factor … was about the lower incident rate. I'm a survivor of child sexual abuse myself, so it was really important to find somewhere where my daughter will be safe," she said.

Walsh says safety is the priority.

"The reforms that we're making are really putting children first. We have made child safety and wellbeing the paramount consideration in early learning as it should always have been," she said.

Putting children first may now be written into law. But in a sector dominated by large for-profit operators, including private equity-backed and listed companies, ensuring children come first will not be easy.