Childcare Regulation and Costs of Childcare

The Centre for Independent Studies (CIS) published, on 29 August, a research report Why Childcare Isn’t Affordable recommending that governments re-examine the case for quality regulations; with a view to reducing the scope of the staffing and qualification requirements under the National Quality Framework. Interestingly, this report follows a Senate Select Committee's Interim Report on the Effect of Red Tape on Childcare (see my previous post) which made a similar recommendation and to which CIS made a submission.

Why

Family Day Care Childcare Benefit Fraud Case

The Australian Federal Police and Commonwealth Director of Public Prosecutions issued a joint media release on a court case heard in the Victorian Country Court involving Rosa Riak, Kuol Deng, and Achai Deng in relation to Hello Children FDC (Family Day Care), Manhal FDC and Dorsy’s FDC. A number of media outlets, including ABC Online and Yahoo7 News, also reported on the case.

Refusal to Grant Provider Approval (Section 12): Tanyous v Secretary, NSW Department of Education

This case is similar to a previous case (see my previous post regarding CYU v Secretary, Department of Education) heard by the NSW Civil and Administrative Tribunal in which the applicant contested the use of assessment tests in assessing applications for provider approval. In CYU the Tribunal found that the National Law did not authorise the conduct of such tests but on public policy grounds allowed the evidence of the assessment to be used in the case.

In this case, the NSW Department of Education (the NSW regulator under the National Law) did not grant provider approval to the applicant (Tanyous) because it did not believe the applicant was a fit and proper person under section 12 because of the results of a written assessment undertaken by the applicant which indicated that he did not have the required knowledge and understanding of the legislative requirements that he would be required to implement as an approved provider. Accordingly, the applicant then applied for internal review and then review by the Tribunal of the decision of the Department. The applicant submitted to the Tribunal that the evidence of his assessment results should not be admitted, because it was illegally or improperly obtained, relying on the decision in CYU. The Department argued that the decision in CYU was incorrectly decided. The Tribunal, however, confirmed that the Department does not have such power, and the evidence of the applicant’s assessment results was illegally or improperly obtained. The Tribunal then considered whether evidence of that assessment should be allowed in evidence anyway on public policy grounds. The Tribunal did acknowledge that knowledge of the National Law is relevant to the assessment of fitness and propriety under section 12:

The Tribunal has considered the meaning of the expression “fit and proper” in many cases (see, for example, Brandusoiu v Commissioner of Police [2015] NSWCATAD 204 at [88]-[92]). For present purposes, it is sufficient to note that “fitness” has three components, one of which is knowledge: Hughes & Vale Pty Ltd v New South Wales (No 2) [1955] HCA 28; (1955) 93 CLR 127 at 156-157. Compliance with the National Law is expressly made relevant to fitness and propriety (see s 13(1)(a)), and knowledge of the National Law and the National Regulations facilitates such compliance. Such knowledge is relevant to whether a person is a fit and proper person to be involved in the provision of an education and care service. (para.31)

In considering whether to admit evidence of the assessment, the Tribunal stated that:

In any event, the question for the Tribunal is whether the applicant is a fit and proper person to be granted a provider approval. The responses provided by the applicant in his written assessment are probative of the issue of whether he has an adequate knowledge and understanding of the legislative requirements that he would be required to implement as an approved provider.
When exercising my discretion as to admitting the evidence of the written assessment, I take into account that exclusion of the evidence might lead to a person with inadequate knowledge of the National Law obtaining a provider approval. I accept the respondent’s submission that the objectives of the National Law are promoted if persons in management have a knowledge and understanding of the National Law and National Regulations. These objectives include ensuring the safety and wellbeing of children (see National Law, s 3(2)(a)). Factors supporting the exclusion of the evidence include that exclusion may protect the administration of justice and that it would or might discourage illegal or improper conduct by regulators (see Southern Equities Corp Ltd (in liq) v Bond (2001) 78 SASR 554; [2001] SASC 70, Lander J at 565 [75] and Question of Law Reserved (No 1 of 1998) (1998) 70 SASR 281 at 288).
Having balanced these factors, I consider that the public policy considerations which favour admission of the evidence outweigh the public policy considerations against admitting it (cf CYU at [72]). I give particular weight to the consideration that the admission of the evidence tends to promote the objective of the National Law to ensure the safety and wellbeing of children. (paras.42-5).
Accordingly, I have decided to admit the evidence of the applicant’s assessment.

The Tribunal then assessed whether the applicant was a fit and proper person under section 12:

I am not satisfied that the applicant is a fit and proper person to be involved in the provision of an education and care service (National Law, s 12(2)(b)). This is because his written assessment indicates a lack of knowledge and understanding of the National Law and National Regulations which makes him unfit for such involvement. He has not provided any evidence to indicate that his knowledge or understanding has changed since undergoing the assessment. To the contrary, in many instances, he has defended his answers as being adequate.
In these circumstances, I have decided to confirm the Secretary’s decision to refuse to grant the applicant a provider approval. (paras.46-7)

Safe Sleep and Rest Practices

Recently, ACECQA published some information about safe sleep and rest practices.

Senate Interim Report on the Effect of Red Tape on Childcare

The Australian, Child Weekly and the Educa website have reported on a Senate report calling for a review into the National Quality Framework. An interview with the chairman of the committee was broadcast on radio station 2GB.

The Senate Select Committee on Red Tape published the The Effect of Red Tape on Childcare Interim Report on 15 August. The final report of the committee is due to be presented by 3 December 2018. The Interim report makes seven recommendations. In summary, the committee recommended that: 

• the Australian Government, through the Council of Australian Governments, work toward reducing the regulatory burden in the Family Day Care sector, including by removing limits on the number of educators in each service.
• the Australian Government, through the Council of Australian Governments, promote and/or develop an evidence-base for staffing ratios and staffing qualifications in early childhood education and care, as a quality component of the National Quality Framework. 
• following establishment of the evidence-base for staffing ratios and staffing qualifications in early childhood education and care, the principles of the National Quality Framework be reviewed to ensure they appropriately reflect the evidence-base. 
• in reviewing the principles of the National Quality Framework, Australian, state and territory governments recognise that formal qualifications are not the only prerequisite for the provision of high quality child care, as this can also be provided by parents
• the Department of Education and Training provide a detailed annual report to the Department of Jobs and Small Business, to provide greater transparency about red tape reductions in early childhood education and care.
• the Department of Education and Training and the Department of Jobs and Small Business report in greater detail on the regulatory effect of implementing the Child Care Subsidy, including in relation to the Activity Test. 
• the Australian Government review the objectives of fee assistance to ensure that it is actually targeting maternal workforce participation and children from disadvantaged backgrounds.

The interim report and other documents can be accessed from the Parliament of Australia website.

Quality of Chldcare in the For Profit Sector & Goverment Subsidies

The Sydney Morning Herald recently published an opinion piece on the quality of childcare services and government subsidies.

Cancellation of Cildcare Benefit Approval: Hilal Family Day Care Scheme and Secretary, Commonwealth Department of Education and Training

This was another case heard by the Australian Administrative Appeals Tribunal in which Hilal Family Day Care Scheme Pty Ltd sought a review of the decision of the Department to cancel its child care benefit (CCB) approval issued under A New Tax System (Family Allowance) (Administration) Act 1999 (Cwlth) for failing to meet the conditions of the approval. Specifically, Hilal claimed CCB for sessions in which educators or children were overseas; claimed for care of children by educators in excess of the number permitted by the National Regulations; and engaged in "child swapping". The Tribunal regarded these contraventions as serious and upheld the decision of the Department to cancel the approval:

I am satisfied overall that comprehensive and serious contraventions of the family assistance law by the applicant have been established, which merit sanction. 

The respondent decided that the appropriate sanction was to cancel the applicant’s approval, a matter within the respondent’s discretion under the statute. For all the reasons I have mentioned, I consider that decision to be the correct or preferable decision, and the reviewable decision will be affirmed. (paras. 23-4)

Cancellation of Childcare Benefit Approval: Moonlight Family Day Care Pty Ltd and Secretary, Commonwealth Department of Education and Training

This was a case heard by the Australian Administrative Appeals Tribunal in which Moonlight Family Day Care Pty Ltd sought a review of the decision of the Department to cancel its child care benefit (CCB) approval issued under A New Tax System (Family Allowance) (Administration) Act 1999 (Cwlth) for failing to meet the conditions of the approval. Specifically, Moonlight failed to comply with its obligation to provide accurate information to the Department as to whether sessions of child care have occurred and the details of those sessions in its reports under the Act. It was alleged that Moonlight had made false statements in respect of at least 7750 sessions of care resulting in an overpayment of CCB. Moonlight at the hearing did not take exception to any of the allegations of breaches made against it but argued that some other penalty like suspension was more appropriate rather than cancellation. 

The Tribunal upheld the decision of the Department to cancel approval, stating that: 

I was surprised to some extent, however, that no person from Moonlight actually gave evidence. That raised for me some concerns about the undertaking given by Moonlight to repay the sum of $160,000.00 involved. My concerns were not diminished upon learning that Moonlight disputed it should be accountable for the whole of that amount and sought to lay some blame elsewhere.

I was surprised also though that the sum in question had not yet been actually repaid, without demur, and I consider that to be a factor of importance. Moonlight in effect was asking for a favourable outcome but was not prepared to actually repay the Commonwealth the amount involved despite admitted breaches.

I agree there appears to be no order of priority given in the legislation as to whether a cancellation or a suspension applies but that does not mean that it is inappropriate to order cancellation for a first offence, so to speak, if the offence is serious enough and the circumstances warrant it.

I am satisfied in this case that the admitted breaches are sufficiently serious to warrant that course.…

The admitted breaches in this matter were frequent and are of a serious nature, potentially impacting on the children under the care of the service. In particular, they are serious in point of amount and in number—perhaps as many as 7000 occasions are involved. I do not accept the submission that based on an overall percentage relative to the total amount of care in question, that this is not a serious or concerning number.   Further, as I have said there has been no repayment of the money involved.

Finally, I see no merit in Moonlight blaming the educators involved: Moonlight had a clear obligation imposed on it by Commonwealth law and it is not in point to explain away failure to meet that obligation by referring to the errors of others. This shows up in my view as a failure of governance which is central to the admitted breaches of the Applicant. (paras. 21-26)

Overview of Victorian Reportable Conduct Scheme

Meridian Lawyers have published a useful summary of the Victorian Reportable Conduct Scheme, for the reporting and investigation by organisations of child abuse or neglect, on their website.