Labor opposes out-of-school care merger

Federal Labor wants a proposed merger between two providers of before and after school care prevented.

The opposition has lodged a submission with the competition watchdog with concerns about Camp Australia - which was recently acquired by US investment firm Bain Capital - merging with Junior Adventures Group.

The ACCC is reviewing the proposal and sought views on how it may affect prices and service levels.

Labor's early childhood spokeswoman Kate Ellis is concerned about the merger's potential impact.

"This is all about an overseas hedge fund getting access to government subsidies and parents' fees on an unprecedented scale," she told ABC radio on Tuesday.

She fears it would drive up costs and is worried about what would happen if something went wrong down the track.

"If we have one foreign-owned for-profit provider controlling so much of the market place, then there is a huge risk that if anything happened to that provider, it would be disruptive to our education system but also to our national economy," she said.

A spokesman for the Department of Education told the ABC the government has not made a submission.

It is the role of the ACCC to consider the effect that the proposed merger would have on competition, he said.