Extend Group's Ethical and High-Quality Approach Under The Spotlight

100:00:02,197 --> 00:00:07,917Welcome to Why Is It So? Your last defence for common sense with your co-hosts200:00:07,917 --> 00:00:10,157Paul Zammit 300:00:11,280 --> 00:00:19,760Music.400:00:17,717 --> 00:00:23,957Welcome again to Why Is It So? In this episode, we have the honour of hosting500:00:23,957 --> 00:00:29,837the founder and CEO of the Extend Group, Darren Stevenson, one of Australia's600:00:29,837 --> 00:00:32,017leading before and after school care providers.700:00:32,697 --> 00:00:37,837As we explore the landscape of the child care industry, we aim to provide informative,800:00:37,977 --> 00:00:40,497engaging content for our listeners.900:00:41,157 --> 00:00:46,077Thank you for being with us today, Darren. I always thought that after school1000:00:46,077 --> 00:00:48,457care was a kind of a babysitting.1100:00:49,237 --> 00:00:53,597So perhaps, Darren, you should at least enlighten me and tell us a little bit1200:00:53,597 --> 00:00:54,537about your company. Certainly.1300:00:54,877 --> 00:00:59,697We're the largest family-owned outside school hours care company in the country.1400:00:59,957 --> 00:01:06,077And a lot of OSH providers have been taken, the bigger ones have been taken over by private equity.1500:01:06,337 --> 00:01:10,557So it's been a lot of turmoil and chain. Paul, there's a lot of people,1600:01:10,717 --> 00:01:13,137how can I explain it? Let me give you an example.1700:01:13,437 --> 00:01:18,737There's people out there that go, after school care, how hard can that be?1800:01:19,197 --> 00:01:23,157You're just babysitting children at the end of the day until mum or dad come.1900:01:23,897 --> 00:01:28,537Let's be. Okay. And it happens a lot to me, social functions and so forth.2000:01:28,697 --> 00:01:32,817And then we start talking and I explain, well, actually, there's a national2100:01:32,817 --> 00:01:35,457law and there's national regulations.2200:01:37,437 --> 00:01:44,537There's the regulations and there's the law, right? This is for outside school hours, Kent.2300:01:44,717 --> 00:01:50,077So, number one, it's a highly regulated environment, which people don't understand.2400:01:50,977 --> 00:01:54,657They think that the highly regulated environments are just for medicine and2500:01:54,657 --> 00:01:58,417telecommunications and transport and those kind of industries,2600:01:58,477 --> 00:02:00,017but it's hit childcare as well.2700:02:00,966 --> 00:02:06,446Then they often don't understand the moving parts within our operation.2800:02:06,806 --> 00:02:12,386So how we need to communicate with the school, because if the school board or2900:02:12,386 --> 00:02:17,406the principal don't sign a contract with us, we then can't do business with3000:02:17,406 --> 00:02:18,246parents and government.3100:02:18,566 --> 00:02:22,146Oh, right. So we need them to give us the opportunity.3200:02:22,266 --> 00:02:25,966So we've got to convince them that we're the right provider for their community.3300:02:25,966 --> 00:02:29,166Community then we have the the privilege if3400:02:29,166 --> 00:02:31,986you like to do business with parents send them3500:02:31,986 --> 00:02:35,626an invoice generate money for the the company then there's3600:02:35,626 --> 00:02:40,886the complexity of staff wherever i go everyone's saying we have staffing difficulties3700:02:40,886 --> 00:02:47,066well we've got to try and make sure that we get the right numbers of staff because3800:02:47,066 --> 00:02:52,346there's ratios of staff to children that we need to abide by and they vary a3900:02:52,346 --> 00:02:53,546little bit across the country.4000:02:53,886 --> 00:02:59,506And then we've got to make sure that we have all our staff working with children4100:02:59,506 --> 00:03:04,126checked so they don't have a criminal record or anything that precludes them4200:03:04,126 --> 00:03:05,206from working with children.4300:03:05,526 --> 00:03:09,826We've got to make sure they're first aid trained. We've got to make sure they're4400:03:09,826 --> 00:03:15,346trained in the key components of the regulations so that we get regularly inspected4500:03:15,346 --> 00:03:19,406by government so that we pass those audits and assessments.4600:03:19,406 --> 00:03:23,706Assessments, and then we get a rating that's made public for every service.4700:03:24,486 --> 00:03:29,226Part of my challenge is, and you might be able to help me here, Paul, is.4800:03:30,214 --> 00:03:34,914Explain a component or a topic without confusing the listener.4900:03:35,494 --> 00:03:39,694I don't want to go on and on and then your listener's going, what does he mean?5000:03:40,174 --> 00:03:45,094So I've got to make sure I capture it in the right context. In layman's language5100:03:45,094 --> 00:03:46,614type thing. Yep, I understand.5200:03:47,054 --> 00:03:53,594Well, in my background, Paul, I've always been involved in sport coaching or5300:03:53,594 --> 00:03:55,374education and care of some kind.5400:03:55,434 --> 00:03:59,874So I started out life many years ago, way back in 1988.5500:04:00,214 --> 00:04:05,234As a teacher in a school. And that was a brand new independent school.5600:04:05,434 --> 00:04:10,414So to help the school market and grow, we ran extracurricular activities,5700:04:10,874 --> 00:04:13,874sports coaching clinics, etc., which I did.5800:04:14,074 --> 00:04:18,614And so from those early days for me, I've always had a bit of a passion for5900:04:18,614 --> 00:04:23,134that learning that takes place outside the classroom, the extracurricular things.6000:04:23,434 --> 00:04:29,054And so I went overseas for a few years and became head of an independent school in London.6100:04:29,394 --> 00:04:34,234And during that time, I also started a business, which was the first structured6200:04:34,234 --> 00:04:37,654after-school care program of its kind.6300:04:37,874 --> 00:04:42,194Interesting. Is that here in Melbourne? No, that was in London in the early 1990s.6400:04:42,214 --> 00:04:46,514And we had a little group of mini buses that would transport children from schools,6500:04:46,774 --> 00:04:50,754activities, and then ultimately deliver them home at the end of the session.6600:04:51,474 --> 00:04:56,794That went quite well. I grew that business and then sold it to the school network6700:04:56,794 --> 00:04:59,094that I was actually also working for.6800:04:59,214 --> 00:05:04,654And then I returned to Australia and I became a manager of a community education6900:05:04,654 --> 00:05:07,874facility for a large independent girls school in Melbourne.7000:05:08,134 --> 00:05:13,534And part of that was delivering the outside school hours care activities for7100:05:13,534 --> 00:05:15,114primary school aged children.7200:05:15,892 --> 00:05:19,592And the board at the time were very supportive, and I spoke with them,7300:05:19,692 --> 00:05:25,252and they agreed for me to take parts of that operation external under my own7400:05:25,252 --> 00:05:27,832business name and grow that across Australia.7500:05:28,052 --> 00:05:30,252Oh, okay. So they were very supportive.7600:05:30,512 --> 00:05:35,392So that was our first school where we had holiday programs and after-school7700:05:35,392 --> 00:05:38,052care. So that started in 2002.7800:05:38,572 --> 00:05:44,592And since then, we've just grown steadily over those 22 years to now have 1207900:05:44,592 --> 00:05:47,872schools that we partner with around the country.8000:05:48,052 --> 00:05:52,772Australia-wide. Australia-wide. And as a consequence, as we've grown,8100:05:53,012 --> 00:05:56,912we've needed to look to the right type of people that we want to bring into8200:05:56,912 --> 00:06:01,492the organisation to be educators and carers in the service.8300:06:01,492 --> 00:06:04,412And over that time there's also been growing8400:06:04,412 --> 00:06:07,592regulation a greater emphasis on the national8500:06:07,592 --> 00:06:10,412law that we need to abide by so a lot8600:06:10,412 --> 00:06:14,252of our work is in recruiting the right people training8700:06:14,252 --> 00:06:17,072them up to make sure that they're capable and they're able8800:06:17,072 --> 00:06:20,032to deliver good levels of education and care8900:06:20,032 --> 00:06:25,412for the children and and we want to do that for several reasons to grow a good9000:06:25,412 --> 00:06:32,272business but also to give the parents of these children confidence in the care9100:06:32,272 --> 00:06:37,152that we're delivering because we believe they need to be able to work free from9200:06:37,152 --> 00:06:39,612guilt while we're caring for their children.9300:06:40,012 --> 00:06:47,012Just to interrupt you there, with the kids doing the before and after care,9400:06:47,132 --> 00:06:50,052if that's what you call it, I'm insured I'm saying that?9500:06:50,172 --> 00:06:57,752Correct. With that, how does your tutoring, managing the children go against, say, opposition?9600:06:58,032 --> 00:07:01,552There are opposition companies doing the same thing as you are,9700:07:01,612 --> 00:07:06,012I assume. Why are you different and how are you different in what you do?9800:07:06,312 --> 00:07:09,692Well, our sector has a really interesting makeup.9900:07:10,012 --> 00:07:16,712There's about 4,700 outside school hours care services around the country.10000:07:16,892 --> 00:07:17,872I thought there might have been a few.10100:07:18,112 --> 00:07:24,132Yeah, there's a lot. Now, for most of those, they're run by individual operators.10200:07:25,111 --> 00:07:28,231So mum and dad operations, for example, and they might have one,10300:07:28,271 --> 00:07:32,811possibly two, small businesses linked up. In ours, we have 120.10400:07:33,231 --> 00:07:37,871Some other companies are bigger than us, but the number of big companies in10500:07:37,871 --> 00:07:39,771the sector is actually quite small.10600:07:40,591 --> 00:07:45,251Now, the largest company in our sector has around about 500 schools.10700:07:45,371 --> 00:07:50,111Now, they have been predominantly owned by private equity. So private equity10800:07:50,111 --> 00:07:55,951entered childcare or outside school hours care in around about 2017.10900:07:56,251 --> 00:08:02,391And so that changed the dynamics of things in terms of how the childcare businesses11000:08:02,391 --> 00:08:07,671were run, how they were accountable, and an emphasis on profit margins as well.11100:08:07,671 --> 00:08:14,431Well, so for us, we've remained free of any private equity buy-in or syndicate ownership.11200:08:14,671 --> 00:08:18,091We're still independent, completely family owned.11300:08:18,311 --> 00:08:23,251But probably the biggest differentiator for us in a business sense is we've11400:08:23,251 --> 00:08:26,631remained debt free throughout the whole time.11500:08:26,891 --> 00:08:30,791And I suppose, Paul, we have two parts to the business to look at.11600:08:30,891 --> 00:08:35,411One is we're educating and caring for kids, the most important thing in the world to a parent.11700:08:35,411 --> 00:08:38,151So that's a serious business even though we11800:08:38,151 --> 00:08:41,471like to say we have fun along the way but then the other component is11900:08:41,471 --> 00:08:44,151genuinely to run a good business that's going to be12000:08:44,151 --> 00:08:47,111financially stable for the long term that's in12100:08:47,111 --> 00:08:51,111everyone's interest and we've been able to do that because we've run a good12200:08:51,111 --> 00:08:56,211business but also we haven't taken on debt and some companies now that took12300:08:56,211 --> 00:09:00,891on a lot of debt before the pandemic are now facing difficulties in servicing12400:09:00,891 --> 00:09:06,391that debt along with some reduced numbers of children attending after the pandemic.12500:09:06,891 --> 00:09:09,871With staff, how do you find staff?12600:09:09,931 --> 00:09:13,931Staff has got to be, as you say, A, they've got to like kids and they've got12700:09:13,931 --> 00:09:15,411to like that sort of work.12800:09:15,591 --> 00:09:19,671And then on top of that, they've got to have the education and the willpower12900:09:19,671 --> 00:09:22,851to go into this business. How do you find them?13000:09:23,914 --> 00:09:28,354We find staff through two key mechanisms. One is word of mouth referral.13100:09:28,634 --> 00:09:32,354There's no better referral than someone already working in the business that13200:09:32,354 --> 00:09:36,794says, I know someone who shares the values and the ethos of the company and13300:09:36,794 --> 00:09:38,254might want to come along and work.13400:09:38,514 --> 00:09:41,874So we have a strong network of referrals to come into the business.13500:09:42,154 --> 00:09:48,354The second component is we actually do advertise on the job boards and online networks,13600:09:48,634 --> 00:09:52,914the same as many other companies in other industries would, which means we have13700:09:52,914 --> 00:09:57,274a dedicated catered internal recruitment team to advertise,13800:09:57,634 --> 00:10:03,914shortlist, interview with line managers so that we choose the right people.13900:10:04,074 --> 00:10:08,114And just like you said, we've got to find the right person because these are14000:10:08,114 --> 00:10:12,614people that need to get up perhaps at 5am to go and work in a before school14100:10:12,614 --> 00:10:15,074care shift. And that doesn't suit everyone.14200:10:16,994 --> 00:10:22,114So we've got to find the right people who can deliver the the education and14300:10:22,114 --> 00:10:27,414care components, meet the national regulations and quality and compliance,14400:10:27,694 --> 00:10:31,534but also have a bit of spark in them. They're engaged.14500:10:31,834 --> 00:10:36,734They enjoy being with kids. So it's a unique person that we're dealing with.14600:10:36,854 --> 00:10:39,054So this is head office. Melbourne is head office.14700:10:39,534 --> 00:10:44,554And when you're looking for staff in Western Australia, what's the situation there?14800:10:44,614 --> 00:10:49,474Do you have a chief of staff over there or do you sort of send someone from14900:10:49,474 --> 00:10:50,754here there to interview?15000:10:51,394 --> 00:10:55,474Do you bring them here? How do you sort of, I mean, nowadays it's all done Zoom15100:10:55,474 --> 00:10:59,274and things. But we didn't have Zoom in my day.15200:11:01,054 --> 00:11:05,554Nine of mine, Paul, I understand. Well, in the example of, say,15300:11:05,674 --> 00:11:10,294Perth, we have a regional manager, a programs manager based there.15400:11:10,414 --> 00:11:13,994So Grace will be a strong part of the recruitment process.15500:11:14,474 --> 00:11:18,894So we might do some preliminary interviews first by phone, perhaps by video15600:11:18,894 --> 00:11:23,354conference, And then Grace would interview those people in person as well.15700:11:23,994 --> 00:11:29,334It's a good mixture of using technology to move swiftly and get the recruitment15800:11:29,334 --> 00:11:33,494wheel turning because you can't be too slow because you've got to be competitive15900:11:33,494 --> 00:11:37,754and have a compelling offer to get the right people to come and educate and care for children.16000:11:37,974 --> 00:11:42,214But equally so, you can't move so fast that you don't do a proper due diligence16100:11:42,214 --> 00:11:46,854of people because you need the right characters. Oh, absolutely.16200:11:48,014 --> 00:11:51,774Yeah, they've got a, kids are something that, you know, everybody loves.16300:11:51,974 --> 00:11:54,394As long as there's like grandparents, they can give them back.16400:11:55,934 --> 00:11:59,434Like it's your turn. I've seen the kids there later. Absolutely.16500:12:00,154 --> 00:12:03,334There's a lot of similarities. Yeah, they sort of get there.16600:12:04,034 --> 00:12:05,854You don't want people who, you16700:12:05,854 --> 00:12:08,314know, have a bad day and they're going to take it out on the kids. Yes.16800:12:09,123 --> 00:12:13,323Obviously, these things. And you have a supervisor or a manager in each state,16900:12:13,383 --> 00:12:14,923I take it, the same way. That's right.17000:12:15,123 --> 00:12:20,923Okay. So someone who can look after their cluster of schools and their job,17100:12:20,943 --> 00:12:25,683because we're a people business, we don't have a lot of machinery in our operation.17200:12:25,743 --> 00:12:27,383It really is a people business.17300:12:27,743 --> 00:12:31,823So we talk about the three R's that we have in the company, which are relationships,17400:12:32,183 --> 00:12:33,643relationships, relationships.17500:12:33,643 --> 00:12:37,263Relationships it's all about developing good professional relationships17600:12:37,263 --> 00:12:40,323with the school leaders with the parents with17700:12:40,323 --> 00:12:44,143the children our colleagues the regulators the17800:12:44,143 --> 00:12:47,323offices that we might deal with at local state and17900:12:47,323 --> 00:12:50,563federal government as well so there's a lot of stakeholders involved18000:12:50,563 --> 00:12:53,703so we need people who have18100:12:53,703 --> 00:12:57,183a bit of emotional intelligence can communicate their18200:12:57,183 --> 00:12:59,903messages well but also at the end18300:12:59,903 --> 00:13:02,983of the day they have a desire they want to be in this sector18400:13:02,983 --> 00:13:06,383done it is hard work dealing with people continually absolutely18500:13:06,383 --> 00:13:10,743so uh so we need to find the right people and support them well there are people18600:13:10,743 --> 00:13:14,603who you know love that sort of work and there's other people of course that18700:13:14,603 --> 00:13:20,923be quick to sort of go off the off the mark if you like and you've got to be18800:13:20,923 --> 00:13:23,743careful who you do pick in that in that sense don't you.18900:13:24,403 --> 00:13:28,043You're absolutely right paul first of all we've got to make sure we have the19000:13:28,043 --> 00:13:32,063right character sector and that's why working with children checks,19100:13:32,283 --> 00:13:36,783criminal record checks are an important part of not just our operation but for19200:13:36,783 --> 00:13:41,623any child care provider and then the right character traits as you've said for19300:13:41,623 --> 00:13:45,103someone that actually wants to work in the sector because as I said before,19400:13:45,343 --> 00:13:52,463I could think of no worse job in the world if you didn't genuinely like educating and caring for kids.19500:13:52,583 --> 00:13:54,883Imagine having to turn up day after day.19600:13:55,023 --> 00:13:58,183So we need the right people for the role.19700:13:58,683 --> 00:14:01,323People that can collaborate as well for us.19800:14:02,561 --> 00:14:08,161Probably one of the differentiators we have, Paul, is we employ all our own staff.19900:14:08,461 --> 00:14:13,421And what that means is we don't use agency staff to cover gaps,20000:14:13,641 --> 00:14:15,381whether they're short-term or long-term.20100:14:15,541 --> 00:14:18,821Now, that's a little bit more costly for a business because you have to invest20200:14:18,821 --> 00:14:20,481more in your own recruitment team.20300:14:20,721 --> 00:14:25,701But it does give you a better educator and it's caring for children.20400:14:26,641 --> 00:14:30,601Yeah, because they know what is expected of them. Whereas from an agency,20500:14:30,721 --> 00:14:33,521they've come from a lot of different jobs they've had.20600:14:33,781 --> 00:14:37,481That may not be the way you work, the discipline you're getting at.20700:14:37,621 --> 00:14:42,361And basically, if you've taught them, they'll do it your way.20800:14:42,461 --> 00:14:46,041If someone else has taught them, they may do it their way, which is correct.20900:14:46,561 --> 00:14:48,221That's very correct. Yeah, okay.21000:14:49,081 --> 00:14:54,121So you've been going now for 20 odd years. Where do you see you going from here?21100:14:54,121 --> 00:15:00,981How do you get more and more schools to engage your company?21200:15:02,281 --> 00:15:05,981Well, one of the things that I'm actually quite proud of, and particularly of21300:15:05,981 --> 00:15:08,041our people in this organisation,21400:15:08,501 --> 00:15:14,281in this business, is that during the pandemic, when we had to lock down services21500:15:14,281 --> 00:15:16,361and open them all at short notice,21600:15:16,541 --> 00:15:22,301and there was a massive task in accounting for children that attended or those21700:15:22,301 --> 00:15:23,661that needed to isolate, are late.21800:15:23,741 --> 00:15:26,041We had to do regular reports through to the government.21900:15:26,421 --> 00:15:31,881And so what I'm getting at is during that time, we needed to be adaptable and flexible.22000:15:32,041 --> 00:15:35,181And we had the key people in the organisation to do that.22100:15:35,521 --> 00:15:40,061And for us, that was essential for where we are in the marketplace,22200:15:40,261 --> 00:15:43,221for the promises that we make to schools and parents.22300:15:43,421 --> 00:15:45,501So we didn't compromise on our quality.22400:15:45,901 --> 00:15:49,521And that was a tough task, but well worth doing.22500:15:49,801 --> 00:15:52,861And so now that we've emerged on the other side of a pandemic,22600:15:53,041 --> 00:16:00,081we have a reputation for fulfilling the promises that were made without having to cut staffing ratios,22700:16:00,681 --> 00:16:07,221reduce the quality of the services or programming or resources or toys or games or any of that.22800:16:07,481 --> 00:16:12,541And so we like to say that we have a little bit of credibility in what we do.22900:16:13,261 --> 00:16:17,281And so if someone says, I can see that you've stayed true to your values,23000:16:17,301 --> 00:16:21,001to your promises services throughout the tough times, they know we're going23100:16:21,001 --> 00:16:22,261to do it throughout the good times too.23200:16:23,176 --> 00:16:27,916And so now we're using that. As I say, we have been in the industry for,23300:16:27,956 --> 00:16:29,556as you say, over 20 years.23400:16:29,656 --> 00:16:33,716We have an excellent track record, great people working in the organisation.23500:16:34,376 --> 00:16:37,796We can help schools with the services. That's got to speak for itself.23600:16:37,976 --> 00:16:42,916The time that you've been in business and, as you say, you've got a good name23700:16:42,916 --> 00:16:48,956in the industry and you've sort of looked after everybody in the right way to get the right people.23800:16:49,336 --> 00:16:53,956And we were talking about staff before. all, how many staff have you got Australia-wide?23900:16:54,396 --> 00:16:59,676Yeah, we've got about 450 staff Australia-wide, and they come in at different levels.24000:16:59,816 --> 00:17:05,156So there's a small sort of central administrative and management team that are24100:17:05,156 --> 00:17:09,176based in Melbourne, but representatives in other states around the country as well.24200:17:09,396 --> 00:17:13,896And they all meet up every month. We fly everyone in because we think that meeting24300:17:13,896 --> 00:17:16,636in person is a really important part of our operation.24400:17:17,276 --> 00:17:20,896Then out in the services, we have a a service coordinator.24500:17:21,236 --> 00:17:24,616That's a bit like an on-site manager that will do the programming,24600:17:24,996 --> 00:17:28,876the compliance, and make sure that the before school care, after school care,24700:17:28,916 --> 00:17:33,616and vacation care programs are well-structured, they're great quality,24800:17:33,796 --> 00:17:36,216and they're a bit of fun for the kids as well.24900:17:36,556 --> 00:17:42,336So they lead the program, but they may well be small teams. So it could be two,25000:17:42,516 --> 00:17:44,876three, or four educators working together.25100:17:45,136 --> 00:17:48,956So there's a lot of work to be done to make sure that those teams get along,25200:17:49,136 --> 00:17:53,696they're harmonious, they respect each other and that they fulfill their role,25300:17:53,836 --> 00:17:56,196but also the promises that we've made to parents.25400:17:57,160 --> 00:18:03,780Deliver great quality education and care. So one of the things we focus on continually is storytelling.25500:18:04,380 --> 00:18:09,800So you mentioned before a similarity between grandparents where they can give the children back.25600:18:09,940 --> 00:18:13,320Well, we give the children back as well. And just like grandparents,25700:18:13,560 --> 00:18:18,480we need to give the children back in a safe and sound condition, but with a story to tell.25800:18:18,800 --> 00:18:22,220So we often say that when the child goes back to the parent,25900:18:22,360 --> 00:18:26,520they need to be able to say, well, mum or dad, here's something I learned or26000:18:26,520 --> 00:18:28,960created or did in after-school care today.26100:18:29,260 --> 00:18:34,460And I was with the educator, Jim, and he was fantastic, and I want to go back tomorrow.26200:18:34,820 --> 00:18:40,300So they have a story to tell about their experience, and that's where we're26300:18:40,300 --> 00:18:44,940a little bit different at the Xtend group as well, in that we focus a lot on26400:18:44,940 --> 00:18:47,120storytelling across the whole organisation.26500:18:48,240 --> 00:18:53,300That will seem to be very happy about things, and all very diligently working there.26600:18:53,400 --> 00:18:55,700Maybe it's because the boss is walking around. I don't know,26700:18:55,780 --> 00:18:58,940but they seem quite a happy crowd.26800:18:59,120 --> 00:19:03,020And that's a good thing to retain and maintain.26900:19:03,580 --> 00:19:09,720Yeah. We're very fortunate in the caliber of people that we've got working in the organization.27000:19:10,420 --> 00:19:15,640But I'd also like to think that's because with our senior team in particular,27100:19:15,820 --> 00:19:18,140we've been able to create the right environment.27200:19:18,420 --> 00:19:22,980And when you have the right environment where people feel a sense of belonging,27300:19:23,220 --> 00:19:27,640that the the environment is on one hand non-threatening.27400:19:27,860 --> 00:19:33,960So they can feel comfortable, they can speak their mind, but it also balances27500:19:33,960 --> 00:19:36,060a little bit of accountability with that.27600:19:36,180 --> 00:19:39,300So the environment's non-threatening. We want to hear your ideas,27700:19:39,460 --> 00:19:42,420but if, for example, your manager listens to you and then says,27800:19:42,540 --> 00:19:46,680we're not going to follow that idea, that that person's still resilient enough27900:19:46,680 --> 00:19:47,940to carry on with their job.28000:19:48,180 --> 00:19:52,980So we're looking for the right environment to empower people and then support28100:19:52,980 --> 00:19:55,980support them so that they can get on and do their job and do it well.28200:19:56,560 --> 00:20:01,760What do you see next for you, for the company, the Xtend group? What...28300:20:02,543 --> 00:20:05,363Where are you heading now? What is the agenda from here?28400:20:05,903 --> 00:20:14,063Are we looking to expand in other states or more in Melbourne or just improve on what we've got?28500:20:14,723 --> 00:20:19,123Where are you going with the way that the company's tracking?28600:20:19,643 --> 00:20:24,583Sure. Well, we'd certainly like to expand, but we want to make sure that our28700:20:24,583 --> 00:20:27,423growth is what I would call controlled growth. growth.28800:20:27,683 --> 00:20:32,423Now, not all businesses in our sector have had controlled growth.28900:20:32,703 --> 00:20:38,783Some of them have poured in private equity or syndicate funding to buy business29000:20:38,783 --> 00:20:43,703with high rents. What that means is you might win a school tender or a partnership29100:20:43,703 --> 00:20:47,563by paying an extraordinarily amount of a high rent.29200:20:48,283 --> 00:20:52,443Now, we've never done that. And the reason we don't is because then to make29300:20:52,443 --> 00:20:56,743a service viable, viable, you need to cut costs and corners.29400:20:56,963 --> 00:21:01,463And invariably, being a people business, it would mean we'd need to cut corners29500:21:01,463 --> 00:21:05,443in the number of people and their capability or their qualifications.29600:21:05,903 --> 00:21:09,643And we don't want to do that. We want to hold true to the promises that we've29700:21:09,643 --> 00:21:10,783made to a school community.29800:21:11,303 --> 00:21:15,603So we want to keep growing a controlled growth on that platform.29900:21:15,983 --> 00:21:18,423For us, we have an an excellent reputation.30000:21:18,963 --> 00:21:23,243Now, the reason I say that, Paul, is some people think childcare,30100:21:23,583 --> 00:21:26,623that must be an easy sector to operate in.30200:21:26,683 --> 00:21:30,943It must be warm and cuddly and inviting and everyone's friendly.30300:21:31,163 --> 00:21:34,763It actually can be quite ruthless and it's highly competitive.30400:21:34,883 --> 00:21:41,383And in the past, there's been all sorts of under the table deals done for businesses30500:21:41,383 --> 00:21:44,303to grow in particular sectors or states.30600:21:44,803 --> 00:21:50,303We've never entertained anything unethical. We've kept a good solid line on30700:21:50,303 --> 00:21:54,803the way we do business and our accountability and the transparency.30800:21:55,363 --> 00:22:00,083And so that has meant that we've got a good, strong, stable company in place30900:22:00,083 --> 00:22:03,003now, which is well positioned to grow for the future.31000:22:03,363 --> 00:22:08,823And I said before, we carry no debt. That puts us in a unique position as a31100:22:08,823 --> 00:22:14,563major player within our sector to now utilise the good balance sheet that we've31200:22:14,563 --> 00:22:17,863had and the funds that we've accumulated to grow into the future.31300:22:18,123 --> 00:22:23,583So we feel we can do that without taking unnecessary risks, which then compromise31400:22:23,583 --> 00:22:26,783the quality of education and care for children and for families.31500:22:27,323 --> 00:22:29,623With funding, just going back to.31600:22:30,496 --> 00:22:34,976Government funding and your own funding in the company.31700:22:35,416 --> 00:22:40,596Just recently, government decided to increase the childcare expenses,31800:22:40,716 --> 00:22:43,636if you like, in what you get as a funding.31900:22:43,936 --> 00:22:50,816But at the same time, I noticed a lot of childcare-type places raised the rates32000:22:50,816 --> 00:22:55,456to exactly the same amount as the government raised the income or their part of it.32100:22:55,616 --> 00:22:59,736What is the situation there? You mentioned before that although they increase32200:22:59,736 --> 00:23:03,096the income, there's a lot of businesses that are struggling.32300:23:03,456 --> 00:23:06,756Actually, there is a lot of businesses struggling at the moment,32400:23:06,776 --> 00:23:09,176and they're delivering negative profits at the moment.32500:23:09,316 --> 00:23:13,016So they're running at some massive losses, particularly with the bigger companies,32600:23:13,276 --> 00:23:16,176some of them in the case of tens of millions of dollars.32700:23:16,436 --> 00:23:20,276So there's a lot of money that's evaporated in that area.32800:23:20,576 --> 00:23:26,956So the question is, with such high government funding and subsidy, how can that be?32900:23:27,276 --> 00:23:32,376Well, the key driver is at the same time that subsidies have increased for providers,33000:23:32,576 --> 00:23:36,736so too has the cost of delivering a compliance service.33100:23:37,336 --> 00:23:43,056Regulation has ballooned in the past few years, particularly during COVID.33200:23:43,776 --> 00:23:49,796Government reporting, the same. The training that's required for educators in33300:23:49,796 --> 00:23:56,516the business has also increased exponentially, and they have also incurred significant wage increases.33400:23:57,276 --> 00:24:02,476So all those things need to be brought into the calculation on what fee needs33500:24:02,476 --> 00:24:07,976to be charged to deliver good quality care, but still keep it affordable for families.33600:24:08,396 --> 00:24:12,236Now, you're not alone in saying, but there's an amazing coincidence.33700:24:12,736 --> 00:24:17,896Government increases the subsidy, childcare providers increase their fees.33800:24:18,236 --> 00:24:23,216And part of that reason is it all happens around the 1st of July each year,33900:24:23,336 --> 00:24:25,156the beginning of the financial year.34000:24:25,156 --> 00:24:28,116That's when governments roll out any34100:24:28,116 --> 00:24:31,176increase in funding through the child care subsidy the34200:24:31,176 --> 00:24:34,436CCS but it's also when educators fees34300:24:34,436 --> 00:24:38,796increase through the children's services award which is the award that most34400:24:38,796 --> 00:24:44,756child care providers need to employ their educators under and typically most34500:24:44,756 --> 00:24:49,696providers especially in outside school hours care will have an annual fee increase34600:24:49,696 --> 00:24:52,616rather than several smaller smaller ones each year.34700:24:52,676 --> 00:24:56,696And again, typically, to meet their obligations of wage increases,34800:24:56,776 --> 00:25:00,216they tend to be around the first of July. The same times the funding is announced.34900:25:00,536 --> 00:25:04,416Okay, that makes sense. And I can understand now that we used to...35000:25:05,578 --> 00:25:09,138You know, everything else has gone up, but it certainly has gone up.35100:25:09,138 --> 00:25:14,338And you see it in the supermarkets where, you know, one day it's $5 for a particular35200:25:14,338 --> 00:25:16,558item, and the next day it's $5.30.35300:25:17,558 --> 00:25:21,998And it seems to go up from there. And although they have all these specials,35400:25:21,998 --> 00:25:27,058it still costs a hell of a lot of money to go and get some food out of the providers.35500:25:27,518 --> 00:25:33,198Yeah. And we're no different in our sector because our parents,35600:25:33,318 --> 00:25:38,538for example, will see a fee increase, but they'd like to understand that the35700:25:38,538 --> 00:25:41,798mechanics behind it. Why is the fee going up?35800:25:41,898 --> 00:25:46,458So it's actually important for us to be a responsible provider and let the families35900:25:46,458 --> 00:25:49,678know how much more the staff are being paid,36000:25:49,818 --> 00:25:54,578the increase in regulation, because we find most parents are actually quite36100:25:54,578 --> 00:25:59,638reasonable once they can see that their fees have gone up a a certain percentage36200:25:59,638 --> 00:26:02,318that correlates with wage increases,36300:26:02,518 --> 00:26:07,638that correlates with the increase amounts that governments charge us to license a service.36400:26:08,098 --> 00:26:12,838Then they can understand. It's that, I think people get a little bit miffed,36500:26:12,838 --> 00:26:15,938and I can understand this, when they can't understand.36600:26:17,209 --> 00:26:22,309The rationale, the reason for fee increases. So we have an obligation to explain that to them.36700:26:23,169 --> 00:26:26,029With what you know, I've heard people sort of say, well, look,36800:26:26,089 --> 00:26:28,289we're funding other people's children.36900:26:28,509 --> 00:26:33,009But does it seem to you that people are sort of expecting more?37000:26:33,449 --> 00:26:37,429I know they're having tough, but it's not only now, it's been going for years.37100:26:37,949 --> 00:26:42,269Do you feel that they're being unreasonable for asking for more or getting free37200:26:42,269 --> 00:26:44,249as they've been asking to be?37300:26:44,669 --> 00:26:49,409Child care in the community. What's your opinion on that?37400:26:49,529 --> 00:26:53,809It's an interesting one because you're right, that the federal government spends37500:26:53,809 --> 00:26:58,549an enormous amount of money on childcare, $14 billion and increasing.37600:26:59,529 --> 00:27:03,789And a lot of that goes to subsidising the fees for working parents,37700:27:03,889 --> 00:27:07,909so those parents that use whatever component of childcare that they need.37800:27:08,229 --> 00:27:14,529And so at the moment, as an average across the country, If not everyone gets37900:27:14,529 --> 00:27:17,089the same amount of subsidy, it's means tested.38000:27:17,329 --> 00:27:20,809But if I were to average it out, the government's footing the bill for around38100:27:20,809 --> 00:27:24,489about 70% of the costs. That's pretty generous.38200:27:25,009 --> 00:27:28,269In return, they're asking for certain standards of compliance,38300:27:28,729 --> 00:27:30,789meeting regulation and quality as well.38400:27:31,029 --> 00:27:33,829So in my opinion, that's all very reasonable. reasonable38500:27:33,829 --> 00:27:36,609you're right though that it's the38600:27:36,609 --> 00:27:40,629families or taxpayers that38700:27:40,629 --> 00:27:43,569may be making contribution through their tax38800:27:43,569 --> 00:27:48,289that aren't receiving that benefit back the argument is however that they're38900:27:48,289 --> 00:27:53,269helping working families with children a better quality of education and care39000:27:53,269 --> 00:27:58,109for those children who in turn will become taxpayers in time that contribute39100:27:58,109 --> 00:28:02,749to society society in other ways that create a better place for everyone.39200:28:02,949 --> 00:28:07,249I believe there is some argument in that, that we do need to make sure that39300:28:07,249 --> 00:28:11,489in this day and age we are providing good quality education and care for children.39400:28:11,649 --> 00:28:13,069It's not like the old days.39500:28:13,851 --> 00:28:17,091Perhaps, Paul, when you were a boy and the same when I was a boy,39600:28:17,191 --> 00:28:21,871where it was easy to walk home from school or grab our bikes and ride for the39700:28:21,871 --> 00:28:23,431day and come home at dusk.39800:28:23,651 --> 00:28:27,631Our children don't have those same freedoms or opportunities.39900:28:28,131 --> 00:28:32,911So we can deliver some of those opportunities in outside school hours care and40000:28:32,911 --> 00:28:34,051other components of childcare.40100:28:34,311 --> 00:28:37,071And I think we do have an obligation to do that for them.40200:28:37,451 --> 00:28:42,971Actually, that was well covered. It makes sense. And generally in the public,40300:28:43,151 --> 00:28:45,591it's usually that everyone's looking after themselves.40400:28:46,651 --> 00:28:51,051And basically their argument was, as I said before, like they're not my children.40500:28:51,451 --> 00:28:54,751They had the children. They should pay for it. And I understand what you're40600:28:54,751 --> 00:28:55,831saying, which is really.40700:28:56,151 --> 00:29:00,551And at the same time, I think the government is being generous with the 70%,40800:29:00,551 --> 00:29:06,411even though not all the parents get 70% of whatever they've got to pay,40900:29:06,511 --> 00:29:10,211depending, as you say, on their means test, which I wasn't aware of.41000:29:10,211 --> 00:29:13,611I thought it basically was this is it. You've got one child.41100:29:13,711 --> 00:29:16,151You get X amount of dollars. If you've got two children, you get X amount of41200:29:16,151 --> 00:29:17,631dollars. And I thought that's it.41300:29:17,771 --> 00:29:20,711But I can understand when you say it's means tested.41400:29:21,051 --> 00:29:25,611So overall, it does make sense what you're telling me. It's very good.41500:29:26,031 --> 00:29:31,491Yeah. So you've got to go shortly. I do in a few minutes, I'm afraid.41600:29:32,411 --> 00:29:37,591Well, we won't hold you up anymore. So thank you very much for having a talk41700:29:37,591 --> 00:29:41,951to us and putting us straight on what's happening in the childcare area.41800:29:42,891 --> 00:29:46,731And good luck. And as I say, thank you very much for squeezing us in today.41900:29:47,211 --> 00:29:48,911Thanks, Darren. Talk to you soon.42000:29:49,451 --> 00:29:53,151That was very interesting, actually, speaking to Darren. I trust you found our42100:29:53,151 --> 00:29:54,131little chat informative.42200:29:54,951 --> 00:29:59,771And we look forward to speaking with you shortly in the not-so-distant future.42300:30:00,011 --> 00:30:03,111Have a good day. Thank you for listening to Why Is It So?42400:30:03,391 --> 00:30:08,571Make sure you tune in to our next episode. Remember, it's your last defense, but common sense.