In response to the current childcare crisis, the Albanese Government has introduced the Early Childhood Education and Care (Strengthening Regulation of Early Education) Bill 2025 (Cth) (Bill), a sweeping package of reforms designed to lift safety and quality standards across the sector.
The Bill signals a clear policy direction: quality and child safety will be non-negotiable.
New Federal Powers – Funding Linked to Compliance
If passed, the Bill will give the Federal Government enhanced oversight, including powers to:
- Revoke access to the Child Care Subsidy (CCS) for services that fail to meet the National Quality Standards;
- Conduct unannounced spot checks to detect fraud or non-compliance through Commonwealth officers;
- Publicly disclose compliance actions, including suspensions, cancellations, and refusals of CCS applications; and
- Legislate direct gap fee collection, requiring families to pay CCS gap fees directly to providers (as announced in the 2024–25 Budget).
This “funding as leverage” approach represents a significant shift in the regulatory landscape for providers.
Higher Bar for Approvals and Renewals
Under the Bill, the Secretary will have broader discretion to refuse, suspend, or cancel CCS approvals based on a provider’s:
- Compliance history under the National Quality Standards;
- Record of serious incidents or complaints related to quality and safety; and
- Previous quality ratings or conditions imposed.
This effectively raises the entry and ongoing compliance bar for providers. While some stakeholders are calling for further reform to staffing ratios (including review of the “under the roof” approach), the Bill has not yet addressed those provisions.
Expanded Compliance and Transparency Measures
The Bill also proposes:
- Broader inspection powers – Authorised officers will be able to enter provider premises during operating hours without consent, a significant shift from existing powers under the Regulatory Powers (Standard Provisions) Act 2014 (Cth); and
- Greater transparency – The Department may publish decisions relating to CCS approvals, including details of suspensions, cancellations, and imposed conditions.
These measures signal a strong emphasis on deterrence and accountability.
Direct gap fee collection
The Bill proposes that from 1 January 2026, Family Day Care (FDC) and In Home Care (IHC) providers must collect CCS gap fees directly from families. This means that educators in these services will no longer be able to collect the gap fee themselves on behalf of providers. All gap fees must be paid by EFT (unless an exemption has been granted). Many FDC and IHC providers already directly collect CCS gap fees.
This change aims to strengthen the sector by:
- ensuring that the CCS is correctly administered and that gap fees are being paid as required;
- freeing up FDC and IHC educators from the time and effort of collecting fees from families so they can focus on providing education and care for children;
- giving families, governments and regulators greater confidence in the sector’s viability.
Forthcoming Changes – What’s Next
The Bill signals a significant shift in regulation of providers in the sector. Further reforms are in the pipeline, including:
- A nationwide early childhood workforce register;
- Implementation of recommendations from the Rapid Child Safety Review Report (due August 2025);
- A mobile device ban in Victorian early learning centres from 26 September 2025;
- Exploration of CCTV use in centres; and
- Mandatory child safety training for educators.
In the meantime, Victoria will introduce its own Early Childhood Workforce Register this August 2025, with initial requirements applying to services receiving government funding. Recruitment agency staff and broader sector coverage will follow later this year. Critics have argued that the staged rollout will leave compliance gaps during the transition.
Moores’ Perspective
At Moores, we see these proposed reforms as a clear message: quality and safety are the price of admission to the sector. While defunding may be a powerful enforcement tool, its practical application will be tested in areas where childcare demand exceeds supply.
Sustainable reform will require more than compliance threats — it will require systemic investment in child safety practices, workforce capability, and transparent governance.
How we can help
At Moores, our Safeguarding and Child Safety teams work alongside organisations to ensure their child safety frameworks are robust, compliant, and reflective of best practice. Our experienced team supports clients to:
- Review and update Child Safety Policies and Codes of Conduct;
- Respond effectively to allegations of child abuse;
- Navigate investigations and compliance obligations; and
- Develop practical, preventative strategies that promote a culture of child safety.
We also provide tailored training for staff, boards, and child safety officers to ensure all individuals understand their role in protecting children.
Contact us
If you would like to discuss how we can support your organisation, our education and safeguarding teams are here to help. Please contact Cecelia Irvine-So or Skye Rose if you would like further support.
View our dedicated page on the Childcare and Early Education Reforms and subscribe to receive updates directly in your inbox.
Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to your organisation.