On 8 May 2018, Federal Treasurer Scott Morrison handed down the 2018 Federal Budget, which included references to the funding of the new Child Care Subsidy, and the provision of "access for preschoolers to 15 hours of early learning each week in the year before school to the end of 2019".

However, the Federal Government will not be renewing the National Partnership Agreement on the National Quality Agenda for Early Childhood Education and Care (ECEC), which is due to expire on 31 December 2018.

As an alternative the Federal Government has directed $14.9 million to directly fund ACECQA, which had previously been funded by the state governments through Commonwealth funding received as part of the National Partnership Agreement.

That said, the Federal Government has also decided that the Australian Children's Education and Care Quality Authority (ACECQA) will also have its Commonwealth funding stopped on 30 June 2020.

For New South Wales, this means that after 30 June 2018, the Federal Government will stop contributing $6.9 million annually to the NSW Government for its assessment and rating as well as compliance activities (of which $2 million annually is usually redirected to the ACECQA). This $6.9 million apparently represents about 23% of an estimated total annual budget of about $30 million for such assessment and rating as well as compliance of service providers across NSW.

Consequently, this creates a period of uncertainty for all state and territory government departments, ACECQA and the early learning sector more broadly. Questions that arise include:

1. Will the NSW Department of Education continue to conduct assessments and ratings as well as compliance checks after 30 June 2018?
2. Will the cut in the total annual budget for assessments and ratings as well as compliance mean existing and new approved providers and applicants will experience further delays? (Especially given 861 out of 5,392 services as of 7 February 2018 have not been reassessed and re-rated for 2-6 years, and 1,344 of all services remain rated as Working Towards.)
3. What job losses are to be anticipated from the NSW Department of Education?
4. Is the NSW Government considering alternative models to how assessments and ratings in future will be conducted?
5. What effect will the withdrawal of the Federal Government’s funding have on identifying and prosecuting fraudulent operators?
6. Will ACECQA be replaced? And if so, with what and who will fund it? And who will assume responsibility over ACECQA?
7. How will the National Quality Framework work after 30 June 2018 and 30 June 2020?

The Australian Childcare Alliance (ACA) NSW alongside the ACA National Committee are currently engaging with key personnel across Federal and NSW government department offices to understand the full impact of this decision.

We will keep you posted with any updates on this issue as they become available.

REFERENCES:

1. Extract from NSW Parliament's Hansard of the speech of the NSW Minister for Early Childhood Education (15 May 2018)

2. Collective Statement from 23 peak bodies representing Early Childhood Education and Care (25 May 2018)

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