Senate Education and Employment Legislation Committee, , 7:37:53 to 7:49:48
The department explains the notification process and family support mechanisms when providers enter administration, including the financial viability reporting requirements for large childcare providers.
Topics: Education, Child safety
Speakers: Mr. Brendan Moon, Senator Steph Hodgins-May, Senator Jess Walsh, Ms. Kylie Crane, Senator Matt O'Sullivan, Senator Marielle Smith
administration with further centers closing. Um did both of these providers um notify the department about this within the satis satisfactory notice period?
>> Um the the short answer senator is yes but let me explain so I don't mislead. So the the legislative notification period is 42 days unless there is an exceptional circumstance. In each of those cases, the companies had entered administration um under different different and varied terms. Um I received a personal phone call from the CEO of Edge as they entered administration. Uh and I got a um we got phone calls from uh the administrators of uh share beginnings as they entered. Um so it wasn't before the 42 days, it was as they entered in administration, but given that it was unforeseen, it did meet the legislative requirement. seems
like it'd be a fairly common one to be used. Is it discretion that you have around exceptional circumstances or
>> Yes, it's discretionary.
>> It's discretionary. >> Um, when edges 11 centers were confirmed for closure, it was reported that some families had only 48 hours to find alternative care, which mortifies me as a parent, working parent. What role did the Commonwealth play in helping those families and what support was actually provided?
>> Uh, thank you, Senator. A couple of things. Uh so probably an important distinction when a provider enters administration the administrators become the approved provider. Um we do a whole bunch of process to make sure that that's okay. Um we'd engage
>> what sort of processes sorry just
>> uh so we make sure that the uh we understand who is uh the person with management and control that they've got working with children checks that they understand their obligations
>> but they are administrators really but
they're not >> they're administrators but we need to be satisfied that they understand the childare subsidy and for our state and territory colleagues that they understand the national law and they understand their obligation
>> and how do you understand that what's the what rigor is behind that process?
Uh I might given time Senator I might take on notice what we look at in terms of fitness and propriety. Um there's a wide range of things and it's probably best to take on notice just for utility. Um in terms of coming back to with those closures a couple of things um we we've we've involved ourselves and our state colleagues in a couple of instances uh or situations. The first one is on entry of the administration period both we and the the relevant state regulators made it very clear our expectations in terms of communicating and engaging with families. Uh we made it very clear that um although there is uncertainty with what some of those services it is incredibly important to us and the states uh that families are notified as early as possible if there's an expectation that services will close. Um and we provided examples of better practice in terms of things that the administrators or any provider really could do to make it easier for families. Uh it was quite a good response in a sense. So it's it's not taking away from the disruption and distress it causes children moving between centers. Um it has been quite increasingly common where administrators particularly will have a look within their existing footprint, their service footprint to figure out where is their capacity and think about arrangements to transition between sites or services in the smoothest way possible. Um I would say that's increasing which is a good thing to see in troubled circumstances. We are also seeing increasingly administrators get on the phones and call around other providers, other services that are near to where those services operate so that they can not only provide as early as possible noting that in
>> this sorry did this all happen in the case of edge
>> um it certainly did with shared beginnings uh and I believe it did with Edge as well.
>> Would you mind taking that on notice?
can take a notice to confirm
>> to be sure and so and and the role of the Commonwealth play in supporting was it are the once you've approved that administrator to be you as you see fit to run that center is that when you step back or is it
>> certainly not Senator so we remain engaged with the administrators throughout the duration uh we provide advice in terms of what we would be looking for in terms of a fit um a fit >> and the family sorry more so do you have
any contact with the families or
>> uh in limited circumstances we have direct contact. It's generally done through the approved provider, sometimes through the state regulator. The general advice is to uh to go to starting blocks
>> to go to where sorry
>> to starting blocks website.
>> Um Minister, what is your plan if another major provider collapses or announces dozens of closures at short notice? um especially if your department uses discretion to wave that 40-day notice period which is um likely to leave families with 48 hours to scramble if you know they are going into administration which sounds like it's an exceptional circumstance. What what assurances can you give us today that if something like that were to happen the government is ready and prepared to respond to meet the needs of those those families under that very stressful
Uh Senator, I think you've just had evidence from the department um about the responses that they um put into place. Um you know, for my part as the minister um uh you know, I have asked that the department support families um as they can um when these instances happen. Uh and uh that is what they do through the work that Mr. Moon has described but also through the work coordinating with the states and territories who um are working you know on the ground to support um families and children as well. I think more broadly um we see that there is an issue with over supply and under supply. I mean that is the challenge that we are facing uh at the moment. Um we've talked a lot we've we've talked a lot today about those things. I can go over it again, but at the end of the day, um there are issues with over supply and under supply. Um we think that um a commission could help um to better steward and coordinate supply in the sector.
>> Thanks, Minister. I suppose I'm talking about a large for-profit provider going um into administration, closing dozens or even hundreds of centers. Um can you hand on heart say that the department is ready for that? I think is a fairly possible scenario when we look at the context that we're in at the moment and hearing you know um providers are lesser birth rates you know um cost of living so on do you hand on heart feel that there is there are um safeguards in place to ensure I
>> mean senator I g I gave you a brief answer because we've already canvased some of this already but I'm happy for
the department
to provide further information
>> then I do need to provide Senator
>> I'll move through as quickly as possible uh and we may need to take some sort of noticed um Senator you may be out of the room when we referenced the um process that exists for large providers so um we have a financial viability process for large providers so um in the examples that Mr. Moon uh gave to you they are not large providers and therefore visibility of their financial position or what might um have them moving into um uh administration we would not have seen when it comes to large providers we have a lot of information on them and that process has been in place for quite a number of years um all large providers profit or not for profofit u must report to the department and there is a pretty forensic analysis um of the financial information that's provided to understand exactly those sorts of things that you're talking about
>> and senator just to be absolutely clear. So they're not major providers. Um Edge was subject to uh large provider financial reporting. Uh also to confirm uh all jurisdictions where uh edge was trading were engaging deeply with edge leading up to so engaging with um I think there's been quite public reporting of uh the South Australian services in particular uh and the work that the education standards board has done with edge leading up to the
so there is there is a um provider of last resort plan ready to go to ensure children aren't left um without care when a private provider exits the community. Um is is there any provision for government to take over and run services? >> There's no provision. Okay. >> you've got to rotate. I've only got a couple more questions if you want me to finish my block and then I can put the rest in on notice. But
>> I just know Senator Selvin is seeking the call. So Senator Hodgins May has a couple more questions. and then I can
put the rest.
>> Well, let's finish here and then I'll come to you and then we'll move
>> because then we'll dismiss the
>> yeah, I'm still I'm still sort of feeling like I I don't have complete confidence that there if there's no um that no children will be left without care if there isn't a provider of last resort plan. Is this something that the is intended to be discussed with ministers state ministers? So to be
fast, I think the department would say that that would be a matter for government. I think um so I will jump in uh and say that um you know we we uh monitor um these providers. Um the department has just given that evidence. Um when these circumstances occur, the department works closely with administrators. They work closely with the jurisdictions. Um we have an example recently where we have intervened and we have supported a not for-p profofit provider to take over 31 of the edge services. Uh and uh we are continuing to work through the lessons of that. uh we are um supportive um where possible um of not for-p profofit providers being supported um in this in the circumstances that you are outlining.
but otherwise it's it's left to the market essentially to take over closing
Um I mean I'm just going to repeat my answer that I've given about five times which you don't want me to do. Yeah,
>> I don't. Um finally then uh I'll put the other ones on notice. Um I am really encouraged to hear what you're saying about the early um childhood care commission um ECAC commission. Um I know stakeholders are very enthusiastic about this and and as are we. Um, will you be tasking the ECS commission with monitoring service uh, openings and closures, local vacancies, um, provider viability and unmet demand and use that information? I think you've sort of said this, but I just want to confirm and use that information to plan where new services are needed.
>> Um, so the sorts of issues that you've just described are within the scope of what we are discussing. Um that is the answer that I can give you because it's going to education ministers on Monday for their decision.
>> And so will should we expect to find out after Monday's meeting?
>> Uh it will be a um a progress report on the consultation around the commission. Um there are decisions to be made. I can't preempt what those decisions will
>> Okay. Thank you. Thank you.
>> Thank you. Senator Sullivan.
Sorry. Was that to me? >> Yes. >> Thank you. Look, I think we're just wrapping up, but I uh I wrote to you uh we covered a lot of the the issues. In the interest of time, I'm going to put the rest on notice, but I wanted to say thank you for whatever work was done to prepare to come with those answers today. >> It now means that you can answer them quickly when I put them on notice. >> Yeah. Great. Thank you.