3.1 Assessment of the implementation and administration of the NQF
This part of the Annual Report addresses the requirement under the National Law to provide an assessment of the implementation and administration of the NQF.
ACECQA's framework to assess and analyse progress centres on the five performance reporting indicators contained in the Implementation Plan for the National Partnership Agreement on the National Quality Agenda for Early Childhood Education and Care (NQA IP).
From 2012-15, the NQA IP provided the basis for the Australian Government, state and territory governments and ACECQA to report to Ministers on the implementation of the NQA.
The data presented in this section of the report were drawn from the National Quality Agenda IT system (NQA ITS) on 30 June 2016.
The NQA ITS provides both a national database and online business tool for children's education and care services to work with state and territory regulatory authorities under the NQF.
The NQA IP for the National Quality Agenda has five performance indicators:
- The proportion of education and care services with a current assessment against the National Quality Standard
- The proportion, location and characteristics of services at each level under the ratings framework
- The proportion of services with waivers for the staffing arrangements or physical environment standards, including the number of those services by socio-economic or regional locations
- The proportion of parents who indicate that they know their service's rating and understand its meaning
- The experience of services under the NQF, with respect to the level of regulatory burden.
There were 15,417 approved education and care services operating across Australia as recorded in the NQA ITS on 30 June 2016. This represents an annual increase of 3 per cent.
- Nationally, there were 14,317 centre-based services and 1,100 family day care services. Centre-based  services made up 93 per cent of all services operating under the NQF.
- Over the past year, the number of family day care  services nationally has increased by 14 per cent.
- There were 7,506 approved providers operating services, most of whom (83 per cent) only operate one education and care service.
Figure 6. The number of approved services by jurisdiction and service type
2 A centre-based service is an education and care service other than a family day care service. This includes most long day care, preschool and outside school hours care services that are deliver at a centre. It does not include preschools in Tasmania or Western Australia that are outside of the scope of the NQF, as well as other services that aren't regulated under the National Law.
3 A family day care service is an education and care service delivered through the use of two or more educators to provide education and care for children in residences, whether or not the service also provides education and care to children at a place other than a residence. They are sometimes known as family day care schemes and they are administered and supported by central coordination units.
The proportion of early childhood education and care services with a current assessment against the National Quality Standard
Under the NQF, regulatory authorities in each state and territory quality assess and rate children's education and care services against the NQS.
As at 30 June 2016, 12,286 services (80 per cent) had received a quality rating, up from 9,347 services (63 per cent) at 30 June 2015. This includes 83 per cent of centre-based services and 40 per cent of family day care services.
Figure 7. The number and proportion of approved services with a quality rating by jurisdiction
Number of services with a quality rating
Number of approved services
Proportion of services with a quality rating
The proportion, location and characteristics of services at each level under the ratings framework
The NQS is designed to facilitate quality improvement in children's education and care services. Authorised officers from regulatory authorities assess and rate services using the seven quality areas, 18 standards and 58 elements that make up the NQS.
There are five possible ratings, as shown in Figure 9. These are Significant Improvement Required, Working Towards NQS, Meeting NQS, Exceeding NQS and Excellent .
Figure 10 shows that nationally, 70 per cent of quality rated services are rated Meeting NQS or above.
The distribution of quality ratings aligns with the NQF's aim of driving continuous improvements across the sector, and matches the designed intent of the NQS to be achievable yet also pose a challenge to services to continually improve quality.
As at 30 June 2016, 13 services had a quality rating of Significant Improvement Required. Regulatory authorities work closely with providers of services that have been rated Significant Improvement Required, using a range of regulatory measures to respond to particular compliance issues at the service and bring about quality improvement.
At 30 June 2016, of the 967 reassessments undertaken, 66 per cent resulted in an improved overall quality rating.
Of the 32 per cent of reassessments that did not result in an improved overall quality rating, 55 per cent did result in improved performance against the elements of the NQS.
Figure 8. Overall quality rating changes for services that have been reassessed 
|Rating level change|
Number of reassessments
Proportion of reassessments
Figure 9. The seven quality areas and five quality ratings under the NQS
Figure 10. The number and proportion of approved services with a quality rating by quality rating level and jurisdiction
Significant improvement required
Working Towards NQS
Figure 11. Element level changes for services that have been reassessed
Centre-based and family day care services
Family day care services are more likely than centre-based services to be rated as Working Towards NQS and less likely than centre-based services to be rated as Exceeding NQS, as shown in Figure 12.
Figure 12. The number and proportion of approved services with a quality rating, by quality rating level and service type on 30 June 2016 
Socio-Economic Index for Areas (SEIFA)
The Socio-Economic Index for Areas (SEIFA) is a measure used by the Australian Bureau of Statistics (ABS) to rank areas according to socio-economic advantage and disadvantage based on census data. Analysis of the assessment and ratings data for centre-based services by SEIFA decile suggests that socio-economic disadvantage has only a small effect on the spread of quality ratings, more so at the Exceeding NQS rating level than at the Working Towards NQS rating level.
Figure 13. The proportion of approved centre based services by quality rating and SEIFA decile 
Working Towards NQS
|10 (least disadvantaged)|
|1 (most disadvantaged)|
Accessibility/Remoteness Index of Australia (ARIA+)
The Accessibility/Remoteness Index of Australia (ARIA+) is a geographical approach to defining remoteness in Australia.
As shown in Figure 14, analysis of the assessment and ratings data for centre-based services by ARIA+ suggests that remoteness has an effect on the spread of quality ratings, at both the Working Towards NQS rating level and the Exceeding NQS rating level.
Figure 14. The proportion of approved centre based services by quality rating and ARIA+ 
Working Towards NQS
|Major Cities of Australia|
|Inner Regional Australia|
|Outer Regional Australia|
|Very Remote Australia|
Ratings by quality area
Figure 15 displays the quality rating results for each of the seven quality areas at a national level.
Figure 15 also identifies the quality areas that are most challenging for services to meet.
Figure 15. The proportion of approved services by quality rating and quality area
Nationally, the quality areas with the highest proportion of services rated at Working Towards NQS are:
- Quality Area 1 (22 per cent), Quality Area 2 (18 per cent), Quality Area 3 (18 per cent) and Quality Area 7 (18 per cent).
Nationally, the quality areas with the lowest proportion of services rated at Exceeding NQS are:
- Quality Area 2 (23 per cent), Quality Area 3 (26 per cent) and Quality Area 1 (27 per cent).
The presence of Quality Area 1 and Quality Area 2 in both of these lists influenced ACECQA's decision to make these two quality areas the topic of its first two occasional papers. More information about ACECQA's occasional papers is available in Part 2.9 of this report.
The proportion of services with waivers for the staffing arrangements or physical environment standards, including the number of those services by socio-economic or regional locations
There may be situations where, despite the best intentions, providers are unable to meet certain requirements in relation to physical environment or staffing arrangements, either on a permanent or temporary basis. In these instances, providers can apply to the regulatory authority in their state or territory for a waiver. Under the National Law, education and care providers are able to apply for two types of waivers:
Service waivers have no specified expiry date. Where a service waiver is in force, the education and care service is taken to comply with the specified element(s) of the NQS and National Regulations. A service waiver does not affect a service's assessment and rating against the NQS and can be revoked by the regulatory authority either at its discretion or on receipt of an application from an approved provider.
Temporary waivers apply for no longer than 12 months. Where a temporary waiver is in force, the education and care service is not required to comply with the specified element(s) of the NQS and National Regulations. Temporary waivers must specify the period for which the waiver applies and providers may apply to the regulatory authority to extend the period of a temporary waiver by periods of not more than 12 months.
As at 30 June 2016, 7 per cent (1,033) of education and care services across Australia were operating with waivers. Over the financial year, the proportion of services with staffing waivers increased from 3.2 to 4.5 per cent, which may in part reflect some services having difficulty meeting the improved educator to child ratios that came into effect from 1 January 2016.
Figure 16. The number of waivers by waiver requirement and type
Service and temporary
Figure 16 shows that of the 694 temporary waivers, 92 per cent are for staffing arrangements. Of the 321 service waivers, 82 per cent are for physical environment arrangements.
The higher percentage of temporary waivers for staffing is indicative of the nature of recruitment, as a provider may apply for a temporary waiver while they are recruiting to fill a position. Services in remote and very remote locations have a higher proportion of waivers, which most likely reflects difficulties in recruiting and retaining staff.
The proportion of parents who indicate that they know their service's rating and understand its meaning
ACECQA's initial research findings from early 2014 suggest that while families support the concept of the NQF to increase the quality of education and care, they had little to no awareness of it or of the rating of their child's service.
In September 2014 and informed by ACECQA's initial research, the Education Council decided that a quantitative study of families' knowledge of services' ratings should be delayed and qualitative research be considered pending the outcomes of the COAG Review of the NQA National Partnership Agreement and the Productivity Commission Inquiry into Childcare and Early Childhood Learning.
ACECQA has collaborated with governments to develop and implement a communications strategy to improve awareness among families, and particularly new parents, of the importance of quality learning environments for child development during the early years. This includes the Starting Blocks website, launched in April 2015, targeted at families who are considering using an education and care service for the first time.
Any future assessment of, and reporting on, this indicator will be determined with reference to reporting requirements of the new NQA National Partnership Agreement.
The experience of services under the NQF, with respect to the level of regulatory burden
As highlighted in Part 2.9 of this report, ACECQA's third and final instalment of longitudinal research on education and care service providers' perceptions and experiences of administrative burden under the NQF was finalised and delivered to the Education Council in November 2015. The full report can be found on the Education Council website.
The study revealed a number of positive findings, including consistently high levels of support for the NQF and a decline in perceptions of overall burden associated with the administrative requirements of the National Law and National Regulations.