This Bills Digest contains references to child sexual abuse and physical abuse. If this material raises issues for you, information and support is available from Lifeline Australia (ph. 131 114) and 1800RESPECT - the National Domestic Family and Sexual Violence Counselling Service (ph. 1800 737 732)

Key points

• The Early Childhood Education and Care (Strengthening Regulation of Early Education) Bill 2025 amends the A New Tax System (Family Assistance) (Administration) Act 1999 to implement a number of measures aimed at improving quality and safety in the early childhood education and care sector. The Bill also implements other measures relating to regulatory powers and the administration of the Child Care Subsidy payment.
• In relation to quality and safety, the Bill will:
  
  • add specific quality and safety considerations to provider and service eligibility criteria for Child Care Subsidy approval
  • allow the Secretary of the Department of Education to apply sanctions, including approval suspension or cancellation, when child care providers and services fail to meet quality and safety considerations
• The Bill does not set quality and safety benchmarks or details the thresholds at which sanctions will apply. Providers and services would benefit from further detail on the expected standards.
• Issues with state and territory regulation of the child care sector, such as delays in quality assessments, may affect the effectiveness of the proposed changes.
• The new quality and safety considerations could have been added to provider and service approval conditions without legislation.
• At the time of writing, the Bill had not been referred to or reported on by any parliamentary committees.

Introductory Info

Date of introduction: 23 July 2025
House introduced in: House of Representatives
Portfolio: Education
Commencement: Parts 1 to 4 of Schedule 1 commence on the day after Royal Assent. Part 5 of Schedule 1 commences on the later of 1 January 2026 and the day after Royal Assent.

Purpose of the Bill

The purpose of the Early Childhood Education and Care (Strengthening Regulation of Early Education) Bill 2025 (the Bill) is to amend the A New Tax System (Family Assistance) (Administration) Act 1999 (the FA Admin Act) to:

• Allow the Secretary of the Department of Education to refuse to approve a child care provider or a service, to set conditions on an approval, and apply sanctions, because of specific quality and safety considerations.
• Expand the Secretary’s powers to publicise actions taken against providers to include approval refusals, infringement notices and conditions for continued approval imposed on a service.
• Allow authorised persons, appointed by the Secretary, to enter the premises of an approved child care service without consent.
• Allow the Secretary to delegate their existing powers to apply for monitoring warrants under the Regulatory Powers (Standard Provisions) Act 2014 (Regulatory Powers Act) to officers at Executive Level 1 or above.
• Allow the Secretary to delegate to Senior Executive Service employees their existing power to appoint an expert to conduct an independent audit of a large child care provider.
• Give legislative effect to a new requirement that all Family Day Care and In Home Care providers will be required to collect Child Care Subsidy (CCS) gap fees—the fee amount paid by families after any CCS is deducted—instead of educators collecting the payments.

The measures in relation to provider and service approvals, child safety, and entry powers were announced by the Government on 27 March 2025. The remaining measures were announced in the 2024–25 Budget (p. 86).

Background

The issue of children’s safety in early childhood education and care (ECEC) services has become a central issue for Australian governments following the high profile arrest of 2 educators charged with child sexual abuse and other crimes—in Victoria in May 2025 and in Queensland in August 2023—as well as an ongoing ABC investigation into child safety in the ECEC sector. The Queensland offender pleaded guilty to 307 charges and was sentenced to life imprisonment in November 2024. Federal, state and territory governments have responded to the issue with different measures and are working on joint initiatives to improve children’s safety.

Early childhood education and care in Australia

In March 2025, there were around 1.4 million children from 1.0 million families attending ECEC services approved for the Australian Government Child Care Subsidy (this excludes standalone preschools). Of those attending ECEC:

• 59.4% (857,930 children) attended Centre Based Day Care
• 40.3% (582,020 children) attended Outside School Hours Care
• 5.0% (71,960 children) attended Family Day Care.

As at 1 April 2025, there were 7,208 providers operating 18,013 services (including preschools) approved to operate under the National Quality Framework (see below). Table 1 sets out the number of services by category and provider management type.

Table 1  ECEC services by type and provider management type, April 2025

Service sub-type	Long day care	Preschool/ Kindergarten	Outside school hours care	Family day care
Private for profit	6,686	24	2,712	272
Private not for profit community managed	979	1,549	770	62
Private not for profit other organisations	1,156	351	871	16
State/territory and local government managed	333	641	123	62
State/territory government schools	9	339	321	0
Independent schools	204	157	151	0
Catholic schools	46	22	137	0
Other/not stated	8	0	9	0
Total	9,421	3,083	5,094	412

Source: Australian Children’s Education and Care Quality Authority (ACECQA), NQF Online Snapshot, 1 April 2025, Tables SS11 and SS12.

Government responsibilities

All levels of government are involved in the ECEC sector.

The Australian Government’s main responsibilities are:

• paying the Child Care Subsidy (fee assistance for families paid to providers and passed on as a fee discount)
• providing funding to state and territory governments to support the Preschool Reform Agreement—the agreement aims to provide all children with access to 15 hours of preschool a week in the year before they start school
• providing operational and capital funding to some providers through grant programs.

State and territory governments’ main responsibilities are:

• regulating approved child care services under the National Quality Framework (NQF) and licencing/registering services not approved under the NQF
• funding and/or providing preschool services and, in some jurisdictions, funding child care services
• providing funding to support the Preschool Reform Agreement
• providing curriculum, information, support, training and development to ECEC providers.

Some local governments fund or deliver ECEC services and are involved in building/planning regulation that affects ECEC providers.

National Quality Framework

State and territory governments are responsible for regulating approved ECEC services under the National Quality Framework (NQF) and licencing/registering services not approved under the NQF. Services not approved under the NQF are covered by state-specific laws.

The federal government is the main funder of child care services through the Child Care Subsidy. To be eligible for the Child Care Subsidy (CCS), child care providers and services must be approved under the NQF and meet any requirements set by the state and territory regulators. In-home care services are not regulated under the NQF but eligible families may receive Child Care Subsidy for in-home care services delivered via the federal government’s in home care program. Standalone preschool services are regulated under the NQF but are not eligible for Child Care Subsidy.

The NQF is a national approach to regulation, assessment and quality improvement of early childhood education and care services in Australia. The NQF includes the Education and Care Services National Law (the National Law) and the Education and Care Services National Regulations (the National Regulations).

The National Law and National Regulations

The National Law and the National Regulations are an applied law system providing for the operation of the National Quality Framework. This means that the same law is applied in each state and territory, with some variations in provisions relevant to the needs of each state and territory. Victoria passed the Education and Care Services National Law Act 2010 and other jurisdictions adopted that law through an application Act or through corresponding legislation.

The National Regulations are made by the Ministerial Council of federal, state and territory ministers responsible for education (also known as the Education Ministers Meeting). Section 302 of the National Law requires the National Regulations to be published on the NSW Legislation website in accordance with Part 6A of the Interpretation Act 1987 (NSW). Each state and territory minister must arrange for the regulations to be tabled in each House of Parliament in their jurisdiction.

Western Australia has its own version of the National Law (rather than an application or corresponding Act), the Education and Care Services National Law (WA) Act 2012, and its own regulations, the Western Australian Education and Care Services National Regulations. While generally aligned with the National Law and National Regulations, there are some differences.

National Quality Standard ratings

The possible state and territory regulatory authority ratings are:

• Significant Improvement Required—the service does not meet 1 of the 7 quality areas or a section of the legislation and there is a significant risk to child safety, health and wellbeing
• Working Towards the NQS—the service provides a safe program but there are 1 or more elements of the NQS that it does not meet
• Meeting the NQS—the service meets the NQS and provides quality education and care in all 7 areas
• Exceeding the NQS—the service exceeds the NQS in at least 4 quality areas, with at least 2 of these being quality areas 1, 5, 6 or 7.

Services that exceed all 7 quality areas can apply to the Australian Children’s Education and Care Quality Authority (ACECQA) for a further rating of ‘Excellent’. This rating denotes that the service ‘promotes exceptional education and care, demonstrates sector leadership and is committed to continually improving’.

Waivers

Approved providers can apply to state and territory regulatory authorities for a waiver of one or more of the National Regulations relating to physical space or staffing. These waivers are intended to allow providers to maintain service operations where they are dealing with special circumstances or unexpected events.

Breaches of the National Law and National Regulations

The Australian Children’s Education and Care Quality Authority’s (ACECQA) Guide to the NQF outlines state and territory regulatory authorities’ compliance tools, including the power to:

• issue infringement notices (for minor breaches of the National Law or National Regulations)
• issue emergency action notices (a direction to remove an immediate risk to children)
• issue compliance directions (an instruction to comply with prescribed regulation)
• issue a compliance notice (an instruction to comply with any section of the National Law or any regulation)
• enter into enforceable undertakings (an agreement to an undertaking from a person to take certain actions or refrain from certain actions to comply with the National Law and the National Regulations)
• issue directions to exclude inappropriate persons from a service premises
• make an amendment to a service’s approval to include a condition
• prosecute an offence against the National Law or National Regulations
• suspend a service’s or provider’s approval
• cancel a service’s or provider’s approval (pp. 545–546).

Offences and penalties

Breaches of the National Law, including a failure to meet requirements relating to child safety, staff qualifications and numbers, and/or to comply with regulatory authority directions can lead to the imposition of penalties under offence provisions.

Enforcement and monitoring powers

Part 9 of the National Law sets out monitoring and enforcement powers. Authorised officers (authorised by the regulatory authority) have significant powers and can base their investigations and monitoring decisions on reasonable suspicion of breaches of, or to monitor compliance with, the National Law and national regulations.

Role of ACECQA

ACECQA is an independent national authority which assists governments in administering the NQF (p. 13). ACECQA guides the implementation of the NQF, approves the qualifications recognised under the framework, oversees the National Children’s Education and Care Workforce Strategy, reports on quality rating and other data on ECEC providers, and provides advice to governments on the NQF.

ACECQA’s role and powers are set out in the National Law and the National Regulations.

Child Care Subsidy

The Australian Government is the main funder of ECEC services, primarily through the Child Care Subsidy (CCS) fee assistance payment. An estimated $16.2 billion will be spent on the CCS in 2025–26 (p. 25). The payment is for families using approved child care services but is generally paid to providers and passed on as a fee discount.

The CCS is characterised by the following:

• subsidy rates are based on an individual and their partner’s combined annual taxable income
• the amount subsidised varies depending on the type of child care service which is used (for example, Centre Based Care, Outside School Hours Care or Family Day Care)
• an activity test determines the number of hours per fortnight a family is eligible to receive CCS
• whether the individual or their partner has 2 or more children aged 5 years or under using child care (second and subsequent children aged 5 years or under attract a higher CCS rate)
• a maximum hourly amount payable via the subsidy is set by the government (the hourly rate cap) with families receiving a percentage of the lesser of this rate or the actual fees charged based on their income.

CCS approval

CCS can only be paid for families using an ECEC service managed by a provider approved under the A New Tax System (Family Assistance) (Administration) Act 1999 (the FA Admin Act). Being approved to operate under the National Law and National Regulations in each state or territory in which a provider’s services will operate is one of the requirements for provider approval for CCS. Providers must meet other conditions, including being a specified legal entity, having an ABN, the person with management or control being considered a fit and proper person, and large providers must be considered financially viable.

Section 194C of the FA Admin Act sets out provider eligibility rules. In addition to the rules set out above, paragraph 194C(f) allows the Minister to prescribe additional criteria in the Minister’s Rules (a legislative instrument).

Section 194D sets out service eligibility rules including that the service is of a particular type, holds any required approvals or licenses under state and territory law, is operated by a fit and proper person, and has arrangements in place to ensure those operating the service comply with family assistance law. Paragraph 194D(f) requires the Secretary of the Department of Education be satisfied that it is appropriate for the provider to be approved in respect of the service with regard to:

• any conditions imposed on the providers’ approval
• any non-compliance by the provider with Commonwealth, state or territory law
• the provider’s record of administering government funding
• the capacity of staff to use the Child Care Subsidy payment system
• other matters prescribed by the Minister’s Rules and
• any other matter the Secretary considers relevant.

Paragraph 194D(g) requires that services satisfy any other criteria prescribed by the Minister’s Rules.

Providers and their services must continue to meet these eligibility rules to remain an approved provider (section 195A).

Providers must also comply with conditions prescribed by the Minister in the Minister’s Rules or given in a notice by the Secretary (sections 195E and 195F).

Sanctions

If the Secretary is satisfied that an approved provider is not complying with a condition for continued approval they can, under subsection 195H(1) of the FA Admin Act:

1. suspend the provider’s approval
2. cancel the provider’s approval
3. suspend the provider’s approval in respect of one or more child care services
4. vary the provider’s approval so that the provider is not approved in respect of one or more child care services
5. reduce the number of any child care places allocated to the service under section 198B
6. suspend, for a maximum of 3 weeks, payments under section 67EB of fee reduction amounts in respect of sessions of care provided by one or more approved child care services of the provider [these fee reduction amounts are the Child Care Subsidy payments for families paid via the provider].

The FA Admin Act also provides for the Secretary to suspend, vary or cancel a provider’s approval in certain circumstances. For example, under section 197A, the Secretary can suspend a provider’s approval where the provider is not complying with a Commonwealth, state or territory law; where there is an imminent threat to the health or safety of a child; or where there are urgent circumstances.

The FA Admin Act includes a range of offence and penalty provisions in relation to provider and service requirements, particularly for requirements related to administering CCS.

Recent reviews and reports

2024 Productivity Commission report

The Productivity Commission’s 2024 report, A path to universal early childhood education and care, found that while ECEC quality appears to have improved over time (Figure 1) the assessment and rating processes should be improved (p. 475).

Figure 1  Quality ratings of assessed services as a % of all assessed services 2013–2024

Source: Productivity Commission, A path to universal early childhood education and care, vol. 2, (Canberra: Productivity Commission, 2024), p. 485.

The Commission found that most services not meeting the NQS go more than 3 years before they are reassessed. Inquiry participants raised concerns with the accuracy, consistency and efficiency of the assessment and rating processes (p. 475).

Figure 2  Average years between National Quality Standard ratings (by state and territory, and previous rating), April 2024

Note: Data only includes the about 73% of services that had been reassessed at least twice as at April 2024.

Source: Productivity Commission estimates using ACECQA data. Replicates Figure 8.9: Productivity Commission, A path to universal early childhood education and care, vol. 2, (Canberra: Productivity Commission, 2024), p. 499.

The Commission found that regulatory authorities and ACECQA should provide more targeted support to services not meeting the NQS and that when a service is rated as ‘Working Towards the NQS’, they should face a consistent, escalating range of regulatory measures including financial penalties when they fail to make meaningful progress (pp. 510–511).

The Commission noted the rate of National Law and National Regulations breaches has been increasing but it ‘did not find evidence of significant gaps in the existing regulatory powers of regulators when services or providers breached the National Law and/or Regulations’ (p. 507).

Figure 3 sets out the rate of confirmed breaches at selected ECEC categories per 100 approved services.

Figure 3  Confirmed NQF breaches, by selected service type, per 100 approved services, 2017-18 to 2023–2024

Notes:

• A confirmed breach is when a regulatory authority finds that a provider, nominated supervisor or family day care educator has failed to abide by relevant legislation, regulations or conditions at an NQF approved service.
• Confirmed breaches data should be interpreted with caution as jurisdictions operate different regulatory and compliance systems. A high number of breaches may not necessarily indicate a lower quality of services, but may indicate more intensive regulatory practice (for example, more frequent regulatory visits or a higher propensity to investigate complaints).
• Comparisons between family day care and other service types should be made with caution, as family day care services can consist of multiple individual family care residences operating under a single unit.

Source: Steering Committee for the Review of Government Service Provision, Report on Government Services 2025, (Productivity Commission: Canberra, 2025), ECEC services data tables, Table 3A.32.

The Commission noted that it is not clear the extent these trends indicate worsening quality at ECEC services. The data could reflect factors such as:

• the effectiveness of services’ ability to identify and report serious incidents may have improved over time
• regulators may be increasing their monitoring activities, making use of improved monitoring technology, and/or acting more on complaints about services
• regulators may consider more events to be a serious incident or breach
• in the case of serious incidents, on average services are getting larger, which increases the risk of incidents. The size of long day care services increased on average from about 63 places per service in 2013 to about 74 places in 2024 (p. 490).

2023 ACECQA Review of Child Safety Arrangements

In 2023, at the request of Education Ministers, ACECQA reviewed child safety arrangements under the NQF. The report of the review was published in December 2023. The report made 16 recommendations for additional safeguards under the NQF as well as inter-related child protection mechanisms (p. 7).

In 2024, ACECQA worked with all governments to develop the voluntary National Model Code and Guidelines to promote a child safe culture when it comes to taking, sharing and storing images or videos of children in early childhood education and care. 

On 16 June 2025, Minister for Education Jason Clare and Minister for Early Childhood Jess Walsh announced changes to the NQF as part of a response to the review. The changes have been agreed to by all state and territory education ministers. All the measures involve changes to the National Regulations.

Changes commencing 1 September 2025:

• The timeframe for approved providers to notify the regulatory authority of any incidents or allegations of physical or sexual abuse to a child while being educated or cared for by an education and care service will reduce from 7 days to 24 hours (change to Regulation 176)
• providers will need to make sure services have a policy and procedures for the safe use of digital technologies and online environments at the service (change to Regulation 168)
• services will need to be free from the use of vaping and vaping substances (Regulation 82)

Changes commencing 1 January 2026 include some rewording of the quality areas to include specific references to child safety (p. 2).

Federal, state and territory education ministers will meet in August 2025 to discuss work on a nationwide register of early educations, the role of CCTV in ECEC services and mandatory child safety training for educators. The Standing Council of Attorneys-General is also meeting in August and will discuss reform of working with children check systems.

2025 Auditor-General Report

In June 2025, the Australian National Audit Office (ANAO) published its performance audit: Management and Oversight of Compliance Activities within the Child Care Subsidy Program. The report was critical of the Department of Education’s lack of a ‘policy to guide decisions on whether, and in what circumstances, to take enforcement action’ meaning the department ‘is unable to assess whether decisions to take enforcement action are fair, impartial, consistent, or proportional’ (pp. 69–70).

In 2022–23 and 2023–24, the Department of Education issued 113 infringement notices totalling $1.1 million in fines but withdrew 41 of these notices ($473,010 in fines). Over these 2 years:

• 7 conditions on approval were imposed as a consequence of non-compliance
• 53 approval suspensions were processed (15 under family assistance law and 29 resulting from National Law suspensions) of which 47 went ahead and
• 319 approval cancellations were processed (61 due to the department’s regulation under family assistance law and 207 due to a National Law cancellation) of which 299 went ahead (p. 71).

The ANAO report found the Department of Education’s process to cancel or suspend CCS approval following a state or territory regulatory authority’s cancellation or suspension was inefficient (p. 74).

Policy position of non-government parties/independents

At the time of writing, non-government parties and independents had not stated their position on the Bill.

Key issues and provisions

Quality and safety measures

In his second reading speech on the Bill, Minister for Education Jason Clare stated the proposed amendments

… will give the secretary of my department the power to take into account a provider's quality, safety and compliance history when considering whether a provider should be approved to administer the childcare subsidy or whether they should continue to be approved, or if they should be approved to operate a new service.

As set out in the ‘Background’ section, families are only eligible to receive Child Care Subsidy (CCS) if their child attends a child care provider or service approved under the FA Admin Act. The Bill will amend the approval conditions under the FA Admin Act so that the Secretary of the Department of Education must have regard to quality and safety considerations in determining whether it is appropriate for a provider or a service to be approved for CCS. Providers and services must continue to meet these conditions to remain approved for CCS.

CCS approval is vital for most providers and the services they operate—the subsidy covers most of the fees charged to families. Minister Clare stated in his second reading speech that child care centres cannot operate without it: ‘It covers about 70 per cent of the average cost of running a centre’.

Sections 195E and 195F of the FA Admin Act allow the Child Care Subsidy Minister's Rules 2017 and the Secretary, respectively, to apply conditions on a provider’s or service’s continued approval. Conditions applied by the Secretary are given via a notice but are not  legislative instruments. As noted in the ‘Background’ section, the Secretary can apply a range of sanctions to an approved provider where they have not complied with approval conditions including suspending and cancelling a provider’s or service’s CCS approval (section 195H).

Key provisions

Section 194C of the FA Admin Act sets out the child care provider eligibility rules for CCS approval. Item 1 of Schedule 1 of the Bill inserts new paragraph 194C(ea) to add the condition that the Secretary of the Department of Education is satisfied that it is appropriate for the provider to be approved having regard to the matters mentioned in new section 194EA (inserted by item 3).

Section 194D sets out the child care service eligibility rules for CCS approval. Item 2 inserts new subparagraph 194D(f)(va) to add a condition that the Secretary is satisfied it is appropriate for the provider to be approved having regard to the matters mentioned in new section 194EA.

New section 194EA (inserted by item 3) sets out quality and safety considerations the Secretary will have regard to in determining provider and service approvals. These include:

• the provider’s record of high quality education and care
• any previous assessment of services operated by the provider in accordance with the NQS and quality ratings
• any notifications of serious incidents or circumstances that could have resulted in a serious incident at services operated by the provider (‘serious incident’ is defined in the Child Care Subsidy Minister's Rules 2017 and includes injuries, harm or trauma to, or illness of a child requiring a doctor or hospital attendance; the death of child; incidents involving emergency services; a child going missing or being accidentally locked in or out of a premises)
• any complaints made in relation to serious incidents at services operated by the provider
• previous or current conditions relating to quality or safety imposed on the provider’s continued approval under section 195E or 195F of the FA Admin Act
• the provider’s record of compliance with family assistance law and with Commonwealth, state and territory laws relating to quality or safety
• whether the quality and safety of services operated by the provider has improved over time
• any other matters prescribed by the Minister’s Rules
• any other matter relating to quality or safety that the Secretary considers relevant.

Items 4–9 amend section 199B to allow the Secretary to publicise additional events or decisions made under specific provisions of the FA Admin Act. The Secretary would be able to publicise actions such as approval refusals, infringement notices and conditions for continued approval imposed on a service. These actions would be listed on the Enforcement Action Register published on the Department of Education’s website.

Bill does not establish benchmarks

While the proposed amendments set out safety and quality considerations for the Department of Education in making approval and continuing approval decisions, they do not set out specific criteria which would determine whether approval should be given or denied, or when sanctions might be applied. For example, if there is an acceptable number of serious incidents permitted before service approval is denied or how improvements in quality and safety will be measured. The amendments provide the Secretary with very broad criteria on which to determine provider and service approval but do not provide clear benchmarks for providers and services to achieve.

In his second reading speech, the Minister stated: ‘The real purpose of this legislation isn't to shut centres down but to raise standards up—to make sure that the safety and quality in childcare centres is what parents expect and what our children deserve.’ However, the Bill does not set out the expected standard. Minimum standards may need to be set out in the Minister’s Rules or policy guidelines. Otherwise, providers may only learn they have fallen short when the department issues conditions on their approval or denies an approval application.

Safety and quality approval considerations could be added without legislation

As noted in the ‘Background’ section, paragraph 194C(f) of the FA Admin Act allows the Minister to prescribe additional provider eligibility criteria in the Minister’s Rules (a legislative instrument).  Subsection 194D(g) allows the Minister to prescribe additional service eligibility criteria in the Minister’s Rules. The quality and safety criteria considerations set out in new section 194EA could have been added to the Minister’s Rules via an amending instrument.

Similarly, policy guidelines could have been amended with regard to the service eligibility rules set out at section 194D. Subsection 194D(f) allows the Secretary to consider any other matter they consider relevant in determining service approvals. Policy guidelines could be amended so that the Secretary was required to have regard to the specific quality and safety considerations.

Adding the criteria to the FA Admin Act underlines the importance of the considerations and provides the Parliament with greater scrutiny.

Reliance on state and territory regulatory authorities

Many of the quality and safety considerations set out in new section 194EA are reliant on the assessment of state and territory regulatory authorities. As noted in the ‘Background’ section, the Productivity Commission identified a number of issues with the regulatory regime administered by state and territory agencies, particularly the long lag time between NQS assessments and reassessments for services which did not meet the standards.

It is unclear how these issues will affect the impact of the proposed amendments—delays in quality reassessments could mean that providers or services are subject to conditions on their approval for a long period of time. Without regular reassessments by state and territory regulatory authorities, it will be difficult for the federal Department of Education to assess improvements in quality and safety (one of the listed considerations).

Power of entry measures

The Bill proposes to expand the powers of Commonwealth officials to conduct compliance checks by allowing authorised officers to enter child care premises without the consent of the occupier. Minister for Education Jason Clare stated that the proposed amendments will mean that ‘the Commonwealth's officers don't need to get a warrant or other preauthorisation to inspect a centre, an outside-schools-hours care service, or family day-care service’.

Key provisions

Item 12 inserts new section 219UCA which would modify the monitoring powers under Part 2 of the Regulatory Powers Act (as applied to the FA Admin Act by section 219UA) to enable authorised officers to enter premises without consent or warrant authorisation in certain circumstances. The Secretary of the Department of Education would need to authorise the officers’ entry without consent. Entry would only be permitted during a child care service’s operating hours or the ordinary business hours of a premises that was not a child care service (such as a provider’s head office). The officer would need to announce their authorisation, show their identity card and give those at the premises an opportunity to allow entry.

The Secretary would only be able to authorise entry to an in-home care service (child care provided by an educator in the child’s home) under this provision if they were satisfied the consent of the occupier cannot reasonably be obtained.

Justification

The Explanatory Memorandum to the Bill states the departure from the standard entry powers under the Regulatory Powers Act are appropriate and proportionate to ‘protect the financial integrity of CCS and better support safety and quality in ECEC’ (p. 9).

The Explanatory Memorandum states that:

The unpredictability of unannounced visits serves as a powerful deterrent to lax standards of integrity, quality and safety. Knowing inspections can occur at any time will encourage providers to maintain consistent compliance with regulatory standards, reducing the likelihood of deliberate non-compliance or attempts to conceal breaches ahead of scheduled visits. (p. 10)

Potential for overlap and duplication with state and territory regulators

State and territory regulatory authorities are responsible for assessing compliance with the NQS. Commonwealth compliance activities are primarily focussed on compliance with the law in relation to CCS, particularly the prevention of fraud and overpayments. The ANAO’s audit of CCS compliance activities noted that the Department of Education’s Child Care Subsidy Financial Integrity Strategy 2023–2027 stated that the federal department’s regulation of providers and services under family assistance law is separate from state and territory government regulatory authorities’ responsibilities for the safety and quality of ECEC providers and services (p. 33).

The Explanatory Memorandum’s justification for the expanded powers suggests federal government compliance activities will support quality and safety in ECEC. This could lead to an overlap with state and territory agencies’ responsibilities, risks duplicating compliance activities, and could cause confusion for providers/services as to the roles of different government agencies. The different levels of government should coordinate compliance activities including site-visits and spot-checks as occurs in the Joint Compliance Monitoring Program (see ANAO report, p. 67).

Gap fee collection for family day care and in-home care providers

The Bill proposes amendments that will require family day care and in-home care providers to collect gap fees from families, rather than educators collecting the gap fees. Gap fees are the fee amounts left after any CCS entitlements have been deducted. Family day care services are delivered in the educator’s home, while in-home care services are typically delivered in the child’s home. Currently, some educators collect the gap fees from families on behalf of providers.

The change to require providers collect the gap fees was announced in the 2024–25 Budget and was initially intended to commence from 1 July 2025. If the Bill is passed, the measure will commence the later of 1 January 2026 or the day after Royal Assent. The delayed commencement followed consultation with stakeholders and is intended to allow providers additional time to make administrative changes.

According to the Department of Education, the change will strengthen the ECEC sector by:

• ensuring CCS is correctly administered and that gap fees are being paid as required
• freeing up FDC and IHC educators from the time and effort of collecting fees from families so they can focus on providing education and care for children
• give families, governments and regulators greater confidence in the sector’s viability.

Family Day Care Australia and the NSW Family Day Care Association have developed resources to assist providers and educators in the transition to the new payment arrangements.