I cannot agree that 'for nurseries a profit is ethical'. Both the public sector and third sector deliver services where, using Ms Tanuku's definition, all 'profit' goes back into services, without the need for moral justification.
More government funding to the PVI sector would inevitably lead to the destruction of the small business model she promotes. The corporate sector has held off investing heavily in this sector precisely because of the precarious nature of profit. However, the guarantee of sustained funding will give a green light to larger providers to swallow up smaller innovative and community-based settings.
For staff, the future doesn't appear attractive. The current system of underfunding means significant numbers of workers on very low pay, with limited training opportunities. Larger providers might improve chances for career development, but the history of private companies in the public services is not one of bounty below director level.
If greater surplus would mean better pay and conditions for staff, then we may have some common cause. But experience in other sectors suggests this element of 'profit' is well down the list of priorities and that in the long run, money will end up in the hands of shareholders of large corporations.