Explanatory Memorandum
(Circulated by authority of the Minister for Employment Participation and Childcare, the Honourable Kate Ellis MP)Outline
The Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011 (the Bill) amends the A New Tax System (Family Assistance) (Administration) Act 1999 (Family Assistance Administration Act) to provide for the assessment and monitoring of the financial viability of large long day care centre operators of approved child care services in the context of the approval and continued approval of such services for the purposes of the family assistance law and to authorise the Secretary to engage an expert to carry out an independent audit of such an operator where there are concerns about its ongoing financial viability.
These two measures are intended to help achieve ongoing stability in the child care industry in light of the experience gained from the collapse of ABC Learning Centres Limited (ABC Learning) in late 2008 and during 2009.
The insolvency of ABC Learning demonstrated that there can be a significant level of business risk associated with large long day care centre operators. Consequences may include the potential to disrupt child care arrangements (leading to anxiety among parents about the stability of care arrangements) and the potential to undermine workforce participation by parents, particularly women.
As part of the measures, the amendments define which operators are 'large long day care centre operators'. The amendments impose an obligation on a large long day care centre operator to be financially viable as a condition of approval and continued approval of the operator's child care services. The Secretary may, for the purposes of determining whether a large long day care centre operator is financially viable and likely to remain viable, require, by written notice, financial information from a large long day care centre operator, as well as financial information from a person or persons who have a nexus with the large long day care centre operator.
A failure to comply with the requirements of the measures may result in sanctions, or in civil or criminal penalties, under the Family Assistance Administration Act.
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