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Goodstart’s commitment to investment steadfast despite a challenging year says 2022 Annual Report
Jason Roberts
Nov 22, 2022
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Goodstart Early Learning, Australia’s largest provider of early childhood education and care (ECEC) services, has released its 2022 Annual Report which confirmed that despite challenging operating and financial conditions the group remained steadfast in its commitment to maintain investment in pursuit of its strategic goals.
A total of $47.3 million was spent on a range of initiatives categorised as “targeted social purpose investments” in areas such as professional learning, quality improvement, inclusion and reconciliation, up from $42.0 million last year, an increase of 13 per cent.
This comes against a backdrop of lower revenue and operating surplus performances which were impacted by a range of external factors that affected not only Goodstart but also the broader ECEC sector at large.
“Goodstart’s results show the impact of the successive COVID-19 waves, increasing costs and a severe workforce shortage.” Chair Paul Robertson AO said.
“Like any strong organisation,” he continued, “we are rising to meet the challenge, doubling down on our safety, health and wellbeing, as well as working to improve occupancy and attract new talent.”
These sentiments were echoed by outgoing CEO Julia Davison who added that “Despite financial and operational challenges, Goodstart has continued to invest in our people, in safety, in quality improvement and in social inclusion to further our Strategic Direction.”
Social impact investment builds as Goodstart works towards strategic goals
As one of its six strategic directions outlined in its 2021 - 2025 corporate strategy, “Impact” is at the heart of Goodstart’s overall mission and purpose and is central to its ambitions to catalyse positive change across the ECEC system and beyond.
This year the Group commissioned its first Social Return on Investment, an initiative that is designed to measure the impact of the delivery of quality early learning and the social and economic value that it creates across Goodstart’s key stakeholders and beyond.
Social Ventures Australia, one of Goodstart’s founding members, conducted the study with benefits modeled across three sets of stakeholders, namely; children, families and communities and governments.
The report concluded that Goodstart’s targeted social investments created meaningful levels of impact with each $1.0 invested creating $5.50 of benefits.
Over the course of FY2022 Goodstart committed $18.9 million to professional development, $7.6 million to quality improvement programs, $9.6 million to inclusion programs, $4.3 million to inclusion access and affordability, $3.0 million to inclusion support of children with additional needs, $1.2 million to reconciliation and $2.6 million to advocacy.
Spending in these areas represented a total of $47.3 million, equivalent to 3.8 per cent of total revenue, a level that comfortably oustrips equivalent investments in previous years.
Operating conditions in FY2022 were challenging as COVID impacts lingered
Although Goodstart’s commitment to investing was unwavering in FY2022, the spending was conducted against a backdrop of challenging operating, and by extension financial, conditions.
“January and February are our key enrolment months, and our enrolment pipeline was severely impacted by Omicron,” Ms Davison explained, “We started the year with our occupancy rate down six per cent on the previous year, which our hard-working centre teams reduced to three per cent by June 2022.”
Total revenues were $1.26 billion, down six per cent compared to the same period last year, with the operating surplus (revenues - operating costs) down to $17.1 million, lower than in FY21 when a record surplus of $95.1 million was recorded.
The net deficit, which includes the cost of lease expenses, came in at negative $65.7 million, which more than canceled out the relatively strong performance generated in the previous year.
“COVID-19 has resulted in child and staff absences soaring, adding to our costs which we covered by drawing on our financial reserves. In 2021, these costs were offset to a substantial degree by generous financial support from the Federal Government. However, the support came to an end in December 2021, which unfortunately was when the highly contagious Omicron variant took hold,” Ms Davison added.
The challenging operating environment prompted Goodstrat to bring forward its annual fee increase from July to March of this year breaking a seven year stretch of sector average fee increases.
Team members and family experience central to Goodstart operating culture
On July 1 2021 Goodstart’s newly completed enterprise agreement was implemented with around 15,600 employees initially covered and a range of financial and non financial pay and conditions benefits enshrined within it.
Educators saw increases of four per cent above award in 2022 rising to five per cent next year with most teachers now receiving pay on par or better than levels paid at state schools. Additionally, more non-contact time has been built into rosters and flexible working arrangements including rostered wellbeing days and paid parental leave also included.
Total staff costs increased by two per cent in FY2022 to $920.9 million and represent 73.2 per cent of overall revenue, which similar to the Group’s social impact investments is a new record.
10.3 million child attendances were recorded at Goodstart centres across the year with families continuing to express their support for the Group through its feedback program. Families rated their likelihood to recommend Goodstart to another family at 8.8 out of 10.0.
Consistent with its goals to develop more personalised experiences for families, the Goodstart at Home product improved its online capability and family experience. More than 26,000 families used their online learning resources in 2022, up from 15,000 last year.
The Group maintained its policy of non charging for public holidays saving families $42 million across the year, and also actively used the gap waiver allowances during COVID to the tune of $21.2 million for families impacted by the illness.
Other key highlights from this years annual report include:
- Inclusion - Goodstart remained active in its inclusion initiatives with the Enhancing Children’s Outcomes (EChO) approach, new learning modules in four streams of its Inclusive Practices Program, Intensive Individual Support Plans and its Early Learning Fund remaining central to its broader inclusion goals.
- Safety, health and wellbeing - Following the appointment of a Chief Safety Officer last year, Goodstart’s safety, health and wellbeing team has been expanded, and now includes a food safety specialist and child safeguarding experts. Processes and assurance frameworks have been updated and their COVID-19 response has evolved.
- Advocacy - Goodstart continued to work with partners to amplify its impact. Smart Start, Goodstart’s dedicated campaign website now has 15,400 subscribers, the Group partnered with Minderoo Foundation’s ‘Thrive by Five’ campaign, The Parenthood and also contributed to peak bodies, the Early Learning and Care Council and Early Childhood Australia.
- Reconciliation - Close to 3,000 staff have undertaken Arrilla Cultural Training over the past year, taking the total to 14,000 team members. Goodstart’s Board formally endorsed a First Nations Employment Strategy targeting a workforce participation rate of seven per cent by December 2025.
To read more about Goodstart’s other achievements in 2021/22, view the Annual Report here.
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