Personal Injury

Amidst mounting concerns and a string of high-profile incidents, the NSW Government has unveiled an ambitious and comprehensive reform package for Early Childhood Education and Care (ECEC). With their focus on transparency and accountability, the ‘nation-leading’ reforms seek to close existing loopholes within the industry and empower the NSW child care regulatory authority to take effective action.

Why Child Care Reform is a Necessity 

To say that the ECEC industry is in need of reform would be an understatement. Despite numerous inquiries and the comprehensive findings of the Royal Commission into Institutional Responses to Child Sexual Abuse, for years, Australia’s childcare system has been beleaguered by systemic failures and regulatory shortcomings. More than ever, nefarious offenders have been able to maintain close proximity to young children even after credible allegations of abuse.

Earlier this year, for example, police alleged that David William James produced child abuse material of 10 children, aged between five and six, during his employment at six out-of-school hours (OOSH) care services in Sydney from April 2021 to May 2024. James had previously been stood down from a childcare centre following concerns from a staff member; however, his WWCC remained active, and no notifications appear to have been issued to his employers.

Cases like these are not novel– instead, they are symptomatic of a broader problem that has exposed the insidious culture of abuse and neglect plaguing Australia’s ECEC. Unsurprisingly, however, outrage continues to erupt in the media, and with this outrage, public sensibilities have soured, eroding trust in the very institutions that are meant to keep children safe.

With this broader context in mind, the reforms represent a watershed moment for the landscape of childcare in Australia. Not only do they signal the intent of the NSW government to bring about pivotal change at such a crucial time, but they also place pressure on the rest of the states to take action and restore the public’s faith in ECEC.

At a Glance

Set to be introduced into the NSW parliament on Wednesday, the landmark legislation contains more than 30 proposed changes to the Children (Education and Care Services National Law Application) Act 2010 (National Law). These changes build on the recommendations committed to by the NSW Government following the Wheeler Review into early education, including the creation of an independent regulatory authority, $55 million to boost frontline staff, and increased publication of regulatory data.

Some changes will implement reforms that were agreed to at a national meeting of state and federal education ministers last month. But the Minns government says the NSW measures go even further and will be “nation-leading”.

The legislation also complements the government’s Working with Children Check (WWCC) reforms by clarifying that all persons working in the sector must hold a WWCC clearance and ensuring that decisions about persons who pose an unacceptable risk to the safety of children in early childhood education and care rest with the regulator.

According to Courtney Houssos, the acting minister for education, the legislation is the “most significant reform to the national law in 15 years.

Key Elements

Although quality standards in childcare are set by the Commonwealth, if the reforms pass parliament, they are expected to reset regulatory expectations across the sector with a particular focus on prevention, transparency and accountability.

Strengthening Regulatory Powers

The Wheeler review found that the existing regulatory framework, governed by the National Law, was significantly constrained in its ability to safeguard children and uphold sector accountability. To amend this, the reforms introduce a legal obligation for the sector and regulator to put the rights and best interests of children above all else, ensuring their safety, protection, and well-being are at the centre of every decision. Under new powers established by the reforms, the regulator will have the authority to suspend or revoke service quality ratings, publish details of high-risk providers, and take swift action in response to safety breaches.

Enhanced Penalties for Non-Compliance

The reform package significantly increases penalties for non-compliance with safety and operational standards. Large providers found in breach of regulations could face fines up to $500,000 – a 900% increase from previous penalty levels. Specific breaches, such as operating without a responsible person present or failing to ban inappropriate individuals, now carry enhanced fines. Individuals may face fines of up to $34,200, corporations may face fines of up to $172,200, and large providers may face fines of up to $516,000.

Mandatory Reporting and Transparency

Under the new laws, providers are required to notify families promptly following serious breaches of the National Law. This mandate aims to ensure that parents are informed about incidents affecting their children. Additionally, service quality ratings will now reflect compliance and investigation outcomes, providing parents with clearer information when selecting childcare services.

Implementation of CCTV in High-Risk Settings

In response to past incidents, the reform package includes provisions for the installation of closed-circuit television (CCTV) in centres identified as high-risk. This measure is intended to enhance oversight and accountability, ensuring that any incidents can be promptly addressed and investigated.

Strengthened Whistleblower Protections

Recognising the importance of internal accountability, the reforms introduce stronger whistleblower protections. These measures are designed to encourage staff and other stakeholders to report safety concerns without fear of retaliation, helping to foster a culture of transparency and continuous improvement within the sector.

Is it enough?

Whilst the reforms are a transformative moment for the regulatory regime, they should form part of a broader conversation about the deplorable state of ECEC and the reasons underlying its ostensible demise.

Greens MP and chair of the NSW education committee, Abigail Boyd, who led the push for change to the sector, labelled the reforms “both highly significant and underwhelming at the same time”, believing some changes to be “bare-minimum expectations.

“That’s how far below public expectations the regulatory regime has been allowed to slip, out of public scrutiny,” she said. “We welcome these reforms that will bring us up to a minimum of what families and children deserve and expect.”

“So, let’s not get too excited or think that this is anywhere near the level of reforms required to put this sector back on track and restore faith in these services.”

Her words echo the sentiment of many, who largely attribute the sector’s shortcomings to the context of a burgeoning profit motive.

At the moment, Australia’s early childhood education and care sector is valued at over $20 billion annually. This growth can largely be attributed to government subsidies.  In total, it is estimated that the federal government spent over $15 billion on childcare subsidies through the Child Care Subsidy (CCS) program.

As a result, there has been a rapid rise in the number of for-profit providers opening childcare centres across the country. Currently, at least 75% of long-day care services are operated by for-profit or private providers, including large corporations and venture capital-backed chains.

For these for-profit childcare providers, there is an incentive to drive down operating costs in order to maximise returns on investment. This often comes at the expense of child safety and welfare. For example, a 2023 ACCC inquiry found that for-profit providers spend significantly less on staff, have a higher proportion of casual employees and employ less experienced educators than not-for-profit providers

Considering this, it’s not surprising that for-profit centres are consistently rated lower quality than not-for-profit providers. The latest report into the sector by the Australian Children’s Education and Care Quality Authority (ACECQA) found that only 13 per cent of for-profit childcare providers exceed national minimum standards for the provision of ECEC, which is less than half that of non-profit providers.

So, while the reforms will undoubtedly strengthen the regulatory framework around ECEC, commitment to quality education and care is incompatible with the for-profit model. Until the perverse incentives of profit are removed or at the very least minimised, the change that is truly needed will not be able to come to fruition.