1 of 13

G8 Education: Start caring for the carers

Investor brief

March 2025

2 of 13

Source: WGEA, 2024, Leading Practice Parental Leave.

What SIX is asking

SIX is asking G8 to implement an employer-funded paid parental leave (PPL) policy. The policy should be determined by the Board and informed by the WGEA Leading Practice Parental Leave Policy Guide

The proposal balances the need for the company to remain competitive in a market where paid parental leave is increasingly the norm with the flexibility to offer an amount and length of PPL that the Board determines is appropriate.

The resolution is found on the UNPRI website: https://collaborate.unpri.org/group/27561/stream

3 of 13

If you read one slide, read this one

G8 Education is the largest childcare provider in Australia that does not fund paid parental leave (PPL) for employees.* It runs 400+ centres and employs over 10,000 people

Behind competitors

Barrier to women in work

Australian women spend 43% less time in paid work than men - one of the lowest rates in the OECD due to low wages and inadequate PPL

Source:WGEA Data Explorer, Private employer - 2025

PPL means higher GDP

Achieving womens full and equal economic participation would add equivalent of 500,000 FTE jobs and $128bn to Australia’s economy

*The Australian Government funds parental leave at the minimum wage for 22 weeks. It is widely accepted this is amount and duration is insufficient to harness full female workforce participation and close the gender pay gap, hence companies largely now pay PPL on top of this amount

Staff turnover = higher costs

Childcare workers are leaving the industry due to poor conditions, keeping them is crucial for future profitability. Staff leaving G8 after birth jumped 150% in past year - potentially millions spent on rehiring - but not disclosed in reporting

PPL improves profitability

We estimate the cost of any type of PPL is less than the cost of rehiring lost staff from not offering it, resulting in higher Net Profit After Tax (NPAT)

Higher returns for investors

Over the long-term, market returns that universal owners are invested in will move in relation to GDP and other measurements of the intrinsic value of the economy - therefore more women in workforce should improve GDP and financial returns

4 of 13

G8 lags behind largest childcare providers

	Weeks of employer funded PPL	Includes super	Employees
Mission Australia Early Learning	11	No	2,473
YMCA	10	Yes	3,819
United Early Learning	10	Yes	3,562
Mayfield Childcare	10	Yes	730
Early Childhood Management	6	Yes	1,042
Goodstart	4	Yes	17,548
KU Children’s Services	3	Yes	1,829
G8 Education	0	N/A	10,193
Affinity Education Group	0	N/A	5,528
Guardian	0	N/A	5,008

Source:WGEA Data Explorer, Private employer - 2023-24

Leaders

Laggards

7.7 weeks is the average length

of PPL when offered by the biggest providers

5 of 13

Employer-funded PPL is ASX norm

Source:WGEA

75% of companies in female dominated industries (such as retail and child care) provide employer-funded PPL

85% of employers with more than 5000 staff provide employer-funded PPL

93 of ASX100 companies offer PPL to primary carers. 89 offer it to primary and secondary carers

Median primary PPL for ASX100 is 16 weeks, and 5.9 weeks for secondary carers

84% of ASX300 companies offer PPL to primary carers

6 of 13

PPL can enhance G8 enterprise value

Sources

HESTA, ‘State of the Sector: Early Child Care and Education, 2021; Randstad, 2023: Focusing on the high cost of employee turnover; Australian Consumer and Competition Commission, 2023, Child care inquiry, Final Report.; Bankwest Curtin Economics Centre, Dimensions and Prevalence of Decent Work in Australia.; G8 Education, Annual Report 2024.

Ruppaner and Squires (2020), The Future of Women @ Work

Major competitors (for-profit and NFP) hire more qualified staff and offer PPL - G8 is a less attractive employer which is a key determinant of perceived quality, which affects profitability (ACCC)

Australian women entitled to longer PPL are more likely to return to full-time work with the same employer (Ruppaner and Squires 2020)

No. of G8 staff taking leave after birth constant, but no. that quit after parental leave jumped from 27 to 66 from 2023-2024 - highest of 10 largest childcare companies reporting to WGEA.

Additional rehring costs for G8 to attract and retain good staff in market where PPL is the norm and industry has staffing shortage. Rehiring can be up to 1.5-2X annual salary, lower productivity (staff take time to adjust to a new workplace), and therefore profits

G8 doesn’t disclose what it spends on staffing agencies (used to fill staffing shortages) nor disclose what it costs to replace staff who didn’t return from parental leave - which is likely millions

“It was a rude awakening for me. Perhaps I was a bit naive not to realise we don't get paid maternity leave. When I worked in my previous industry, they offered 6 months of paid parental leave. Childcare is a sector that's all about women and children, but they don't offer any parental leave! I thought it was a given. The wage gap between my usual pay and the government scheme was huge. I haven't gone back since having my child.”

Former childcare centre director speaking to SIX

7 of 13

PPL can enhance G8 enterprise value

Sources

HESTA, ‘State of the Sector: Early Child Care and Education, 2021; Randstad, 2023: Focusing on the high cost of employee turnover; Australian Consumer and Competition Commission, 2023, Child care inquiry, Final Report.; Bankwest Curtin Economics Centre, Dimensions and Prevalence of Decent Work in Australia.; G8 Education, Annual Report 2024.

Mayfield childcare is a large for-profit competitor that offers 10 weeks of employer funded PPL, proving that employer funded PPL can sit alongside profit

we estimate cost of replacing staff (approx 1.5x annual salary) to be greater than the cost of both 4 and 8 weeks of PPL, resulting in higher NPAT. If G8 only ‘topped up’ the difference between the government PPL and staff wages, rather than paid it in addition to Gov PPL, the effect would be even greater.

Staff that left G8 after parental leave jumped from 27 to 66 in past year - this could have resulted in millions of avoided recruitment costs

By following WGEA’s recommended process, it should be possible for G8 to create a PPL policy where the financial benefits outweigh the financial costs

Decent work, including flexibility and good conditions, can directly improve company financial performance through improved productivity and motivation

8 of 13

G8 is failing women and mothers

G8 employs 10,193 people, 96% are women (>50% of oil and gas workers in Australia)

A third of the gender pay gap can be attributed to the time women spend outside of the workforce undertaking unpaid care, including looking after newborn children

Access to generous universal paid parental leave is linked to higher labour force participation by women after birth

Partly due to inadequate PPL, women in Australia face a ‘motherhood penalty’, with earnings reduced on average by 55% in the first five years of parenthood.

Low wages for childcare workers led the Federal Government to raise them by approx 15% from 2025-27 to help address the industry staffing crisis

G8 faces reputational risks from being seen as not supportive of women and mothers, which is who it targets with its services and branding

Sources:

Source:Impact Economics and Policy: Addressing Australia's Critical Skill Shortages: Unlocking Women's Economic Participation

9 of 13

G8 not counting cost of inequality imposed on other companies

Sources

TAI, The Economic Benefits of High Quality Universal Early Child Education; UNPRI, A Legal Framework for Impact: Australia, 2022.; Impact Economics and Policy: Addressing Australia's Critical Skill Shortages: Unlocking Women's Economic Participation

Inadequate PPL is a driver of the gender pay gap

Gender inequality is a hidden externality that limits Australia’s economic growth.

Despite being highly educated, Australian women spend 43% less time in paid work than men - one of the lowest rates in the OECD due to low wages and inadequate PPL

Closing half the gender gap in employment and work hours would add the equivalent to 509,000 FTE workers with post-school qualifications, equivalent to 82% of Australia’s unemployed population.

Expanding PPL can help achieve this, as unpaid care, career interruptions and part-time employment account for 33% of the gender pay gap in Australia (KPMG)

Relying on government PPL and staff discounts for low-paid women reinforces traditional caregiving roles, as men, who typically earn more, are less likely to take leave. This ‘motherhood penalty’ hinders career progression, wage growth, and retirement savings

Countries with generous, equally shared parental leave see higher female workforce participation. If Australian women had Sweden’s participation rates, they would earn an additional $696,000 over their careers and retire with $180,000 more in savings

10 of 13

G8’s PPL policy reduces GDP and diversified portfolio returns

Sources

Jon Lukomnik and James P. Hawley, Moving Beyond Modern Portfolio Theory: Investing that Matters, 2021.

The Shareholder Commons, Living Wage & the Engagement Gap

Impact Economics: Addressing Australia's Critical Skill Shortages, 2022

Women’s Economic Equality Taskforce: A 10-Year Plan to Unleash the Full Capacity and Contribution of Women to the Australian Economy, October 2023.

Diversified universal owners depend on overall market return

Universal ownership requires diversification, diversified investors should prioritise overall market returns and macroeconomic performance over the value of an individual company - overall market performance determines 75-94% of portfolio returns
Over the long-term, broad market returns (including equities) will move in relation to GDP and other measurements of the intrinsic value of the economy
Universal owners should focus on the macroeconomic impact of companies' actions rather than just their valuation - including using voting in their own interest to address negative externalities from company actions

Inequality reduces economic growth and market returns

If Australian women had Sweden’s participation rates, they would earn an additional $696,000 over their careers and retire with $180,000 more in savings
Closing half the gender gap in employment and work hours would add the equivalent to 509,000 FTE workers with post-school qualifications, equivalent to 82% of Australia’s unemployed population.
Another study estimated achieving womens full and equal economic participation would add $128bn to Australia’s economy - including a recommendation that PPL is paid at replacement wages.

11 of 13

Responding to objections

#1 - “We already offer discount childcare instead of PPL which is of greater financial value than 6-8 weeks of PPL”

This claim appears unlikely. The Aus Gov estimates a single parent earning $57,500 p.a. (roughly what a childcare non-manager FTE would earn under award rates) would pay $78/week out of pocket for an average day centre, with a 3 year old going for 9 hours/day 4 days/week = $624 over 8 weeks assuming a 100% discount (G8 hasn’t confirmed the discount rate).

8 weeks of PPL at full pay would be over $9,000 (not including super) - meaning less wages and less super at the end of their career.

This does not address the other incentives that lead women to do more unpaid care than men - low pay and inadequate PPL available regardless of gender. Staff leaving after birth suggests this is an inadequate incentive to remain employed at G8.

PPL is a necessity in addition to affordable childcare. PPL is necessary for mothers to recover from childbirth and bond with newborn children immediately after birth - which also affects their cognitive and linguistic development

12 of 13

Responding to objections

#2 - “Our employees didn’t say they want PPL”

The Independent Education Union supports SIX’s ask. It represents over 33,000 people in Australia, including many G8 child care workers. PPL was a demand in recently completed Multi-Enterprise Agreement that the companies rejected.

#3 - “Inequality isn’t relevant to fiduciary duty”

Law firm Freshfields Bruckhaus Deringer recently issued a report arguing prioritising systemic macroeconomic risks over individual enterprise value should be consistent with best “financial interest” test applied by Australian regulators - as well as respecting the duties of institutional investors to address sustainability concerns in 10 other critical jurisdictions

For more common objections to using stewardship to address systemic risk - see The Shareholder Commons: Labour and Inequality Case Study, pp. 36-37.

#4 - “This is a cost borne by shareholders”

we estimated the cost of 4-8 weeks of PPL ($1.2-2.2m) is less than the cost of rehiring lost staff ($2.7m) resulting in higher NPAT.

If G8 ‘topped up’ the difference between government PPL and staff wages, rather than paid it in addition to Gov PPL as we have assumed, the effect would be even greater.

13 of 13

If you would like to discuss this analysis please contact

James Alexander

Senior ESG Manager

james@six-invest.com.au