Language matters in public policy.
In early childhood education and care (ECEC), terminology shapes perception, informs debate and influences reform. One term that continues to attract attention is ‘for-profit’.
As national conversations intensify around funding, regulation, quality and workforce sustainability, a question is emerging: should the sector reconsider how privately operated services are described?
‘For-profit’ is a legal and tax distinction. It differentiates providers that distribute profits to owners or shareholders from not-for-profit organisations that reinvest surpluses into operations.
Yet in public discourse, the phrase often carries broader connotations. In education and care – sectors closely linked to children’s wellbeing, ‘for-profit’ can imply that financial return is prioritised over quality outcomes.
For many approved providers operating private services, that characterisation does not reflect day-to-day reality. These services operate under the same National Quality Framework (NQF), are assessed against the same National Quality Standard (NQS), and are subject to identical compliance requirements as not-for-profit counterparts.
Quality is regulated, measured and publicly reported irrespective of ownership structure.
Advocates for a shift in terminology argue that ‘privately owned’ is a more neutral descriptor. It describes governance and ownership without implying motive.
In other sectors, including healthcare, aged care and schooling, the term ‘private’ is commonly used without the same moral framing. Independent schools, for example, are rarely described as ‘for-profit schools’ in everyday conversation, even when operated by corporate entities.
A move towards ‘privately owned’ could:
- Reduce adversarial framing in sector debates
- Acknowledge diversity within ownership models
- Better reflect the operational realities of small and medium providers
- Shift discussion towards quality and sustainability rather than structure
This may be particularly relevant given that many privately owned ECEC services are small businesses, often family operated, embedded in their communities.
However, language is rarely neutral in policy settings.
When examining this financial landscape, it is crucial to acknowledge the structural imbalances between ownership types. For instance, not-for-profit childcare operators generally do not pay payroll tax. This exemption provides them with a significant financial advantage and creates a corresponding disadvantage for privately owned providers, who must absorb these heavy tax burdens while competing in the same market. Furthermore, while the not-for-profit label implies surpluses are purely reinvested, there needs to be greater transparency regarding the substantial salaries and compensation packages paid to board members and executives at large not-for-profit organisations.
Critics of a terminology shift may argue that ‘for-profit’ provides transparency. It signals financial structure clearly and allows stakeholders to interrogate how public funding intersects with private return.
ECEC in Australia operates within a mixed-market model heavily supported by government subsidy through the Child Care Subsidy (CCS). In that context, ownership and profit distribution are seen by some as legitimate areas of scrutiny.
From this perspective, clarity of language supports accountability.
Australia’s ECEC landscape includes community-based organisations, large not-for-profits, small to medium, family operators, corporate groups, public providers and independent schools.
Under the NQF, all approved providers must meet regulatory standards relating to safety, staffing, governance and educational program quality. Families choose services based on availability, location, philosophy, cost and reputation, not solely ownership type.
Research has shown variability in quality exists across all ownership models, rather than being determined by structure alone.
If the central policy objective is improved child outcomes, workforce sustainability and service viability, the debate may need to focus less on labels and more on:
- Funding adequacy
- Workforce conditions
- Leadership capability
- Regulatory consistency
- Market stability
The question of terminology emerges at a time of significant national reform. Fee caps, workforce attraction initiatives, regulatory cost increases and subsidy adjustments are reshaping the operating environment.
In this context, framing matters.
Describing services as ‘privately owned’ may reduce polarisation and encourage more constructive dialogue between peak bodies, policymakers and providers. Conversely, retaining ‘for-profit’ may reinforce transparency in funding debates.
Ultimately, the issue is not semantics alone. It is about how language influences trust, policy design and public perception.
Early childhood education is no longer viewed solely as a market service. It is widely recognised as essential social infrastructure underpinning workforce participation and long-term educational outcomes.
As the sector evolves, its language will continue to evolve with it.
Whether ‘for-profit’ remains the dominant descriptor, or ‘privately owned’ gains traction, the critical question remains unchanged:
How can Australia ensure that all services, regardless of ownership structure – are sustainable, accountable and delivering high-quality outcomes for children?
That debate extends well beyond terminology.
Author: Fiona Alston