5DWhat is a *systemic risk*?

5D What is a *systemic risk*? (1) In this Law, a ***systemic risk*** arises in relation to— (a) an applicant for a provider approval if the provider approval is granted and there is— (i) a risk to the safety, health or wellbeing of a child or children to be educated and cared for by an education and care service proposed to be operated by the applicant; or (ii) a risk of the applicant contravening this Law or the national regulations; or (b) an approved provider if there is— (i) a risk to the safety, health or wellbeing of a child or children being educated and cared for by an education and care service operated by the approved provider; or (ii) a risk of the approved provider contravening this Law or the national regulations; or (c) a related provider of an applicant for a provider approval or a related provider of an approved provider if there is— (i) a risk to the safety, health or wellbeing of a child or children being educated and cared for by an education and care service operated by the related provider; or (ii) a risk of the related provider contravening this Law or the national regulations. (2) In determining whether there is a systemic risk, the Regulatory Authority may have regard to the following— (a) the nature of the risk; (b) whether the risk is connected to, or is a result of, the governance, ownership or operation of an approved provider or one or more related providers of the approved provider; (c) whether the risk is shared between an approved provider and any related provider of the approved provider; (d) how the risk affects an approved provider and any related provider of the approved provider; (e) any other matter the Regulatory Authority considers relevant. 6 Interpretation generally (1) Schedule 1 applies in relation to this Law. (2) The National Partnership Agreement is declared to be a relevant document for the purposes of paragraph (h) of the definition of extrinsic material in clause 8(1) of Schedule 1. 7 Single national entity (1) It is the intention of the Parliament of this jurisdiction that this Law as applied by an Act of this jurisdiction, together with this Law as applied by Acts of other participating jurisdictions, has the effect that an entity established by this Law is one single national entity, with functions conferred by this Law as so applied. (2) An entity established by this Law has power to do acts in or in relation to this jurisdiction in the exercise of a function expressed to be conferred on it by this Law as applied by Acts of each participating jurisdiction. (3) An entity established by this Law may exercise its functions in relation to— (a) one participating jurisdiction; or (b) 2 or more or all participating jurisdictions collectively. Sch. s. 7(4) repealed by No. 80/2011 s. 63. 8 Extraterritorial operation of Law It is the intention of the Parliament of this jurisdiction that the operation of this Law is to, as far as possible, include operation in relation to the following— (a) things situated in or outside the territorial limits of this jurisdiction; (b) acts, transactions and matters done, entered into or occurring in or outside the territorial limits of this jurisdiction; (c) things, acts, transactions and matters (wherever situated, done, entered into or occurring) that would, apart from this Law, be governed or otherwise affected by the law of another jurisdiction. 9 Law binds the State (1) This Law binds the State. ***State*** means the Crown in right of this jurisdiction, and includes— (a) the Government of this jurisdiction; and (b) a Minister of the Crown in right of this jurisdiction; and (c) a statutory corporation, or other entity, representing the Crown in right of this jurisdiction. Part 2—Provider Approval Division 1—Application for provider approval 10 Application for provider approval (1) A person, other than a prescribed ineligible person, may apply to the Regulatory Authority for a provider approval. (2) An application may be made by more than one person. (3) If an application is made by more than one person— (a) the prescribed information must be provided in respect of each person; and (b) the requirements of this Division must be complied with by and in respect of each person. 11 Form of application An application under section 10 must— (a) be made to the Regulatory Authority of the participating jurisdiction— (i) in which the applicant, or any of the applicants, is ordinarily resident; or (ii) if the applicant or applicants are not individuals, in which the principal office of the applicant or any of the applicants is located; and 12 Applicant must be fit and proper person (1) An applicant who is an individual must satisfy the Regulatory Authority that the applicant is a fit and proper person to be involved in the provision of an education and care service. (2) If the applicant is not an individual, the applicant must satisfy the Regulatory Authority that— (a) each person who will be a person with management or control of an education and care service to be operated by the applicant is a fit and proper person to be involved in the provision of an education and care service; and (b) the applicant is a fit and proper person to be involved in the provision of an education and care service. (3) The head of a government department administering an education law of a participating jurisdiction is taken to be a fit and proper person for the purposes of this Part. 13 Matters to be taken into account in assessing whether fit and proper person (1) In determining whether a person is a fit and proper person under this Division, the Regulatory Authority must have regard to— (a) the person's history of compliance with— (i) this Law as applying in any participating jurisdiction; and (ii) a former education and care services law of a participating jurisdiction; and (iii) a children's services law of a participating jurisdiction; and (iv) an education law of a participating jurisdiction; and If a person has been served with an infringement notice for an offence under this Law, and the person has paid the penalty, the Regulatory Authority cannot consider that conduct when determining whether the person is fit and proper. See section 291(5). (b) any decision under a former education and care services law, a children's services law or an education law of a participating jurisdiction to refuse, refuse to renew, suspend or cancel a licence, approval, registration or certification or other authorisation granted to the person under that law; and (c) either— (i) any prescribed matters relating to the criminal history of the person to the extent that history may affect the person's suitability for the role of provider of an education and care service; or (ii) any check of the person under a working with vulnerable people law of a participating jurisdiction; and (d) whether the person is bankrupt, or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors or, in the case of a body corporate, is insolvent under administration or an externally-administered body corporate. (2) Without limiting subsection (1), the Regulatory Authority may have regard to— (a) whether the person has a medical condition that may cause the person to be incapable of being responsible for providing an education and care service in accordance with this Law; and Sch. s. 13(2)(b) amended by No. 9/2017 s. 5(a). (b) whether the financial circumstances of the person may significantly limit the person's capacity to meet the person's obligations in providing an education and care service in accordance with this Law; and Sch. s. 13(2)(c) inserted by No. 9/2017 s. 5(b). (c) whether the person has the management capability to operate an education and care service in accordance with this Law; and Sch. s. 13(2)(d) inserted by No. 9/2017 s. 5(b). (d) any of the following actions taken under the A New Tax System (Family Assistance) (Administration) Act 1999 of the Commonwealth in relation to a child care service approved under that Act, operated by the person or in relation to which the person was a person with management or control— Sch. s. 13(2)(d)(i) amended by No. 13/2022 s. 7(a). (i) any sanction imposed under section 195H of that Act; Sch. s. 13(2)(d)(ii) amended by No. 13/2022 s. 7(b). (ii) any suspension imposed under section 197A of that Act; Sch. s. 13(2)(d)(iii) amended by No. 13/2022 s. 7(c). (iii) any infringement notice given under section 219WA of that Act. Sch. s. 13(2A) inserted by No. 53/2025 s. 65(1). (2A) Without limiting subsections (1) and (2), the Regulatory Authority may have regard to the matters set out in subsections (1) and (2) in respect of any related provider of the applicant if the Regulatory Authority is satisfied that there may be a systemic risk in relation to the applicant or the related provider of the applicant. Sch. s. 13(3) amended by No. 53/2025 s. 65(2). (3) Nothing in subsection (1), (2) or (2A) limits the circumstances in which a person may be considered not to be a fit and proper person to be involved in the provision of an education and care service. 14 Regulatory Authority may seek further information (1) For the purpose of carrying out an assessment as to whether a person is a fit and proper person, the Regulatory Authority may— Sch. s. 14(1)(a) amended by No. 43/2022 s. 17(1)(a). (a) ask the person to provide further information, including for the purposes of assessing the person's knowledge of the National Quality Framework; and Sch. s. 14(1)(b) amended by No. 43/2022 s. 17(1)(b). (b) undertake inquiries in relation to the person; and Sch. s. 14(1)(c) inserted by No. 43/2022 s. 17(1)(c). (c) by written notification, require the person to undergo an oral or written assessment of the person's knowledge of the National Quality Framework. Sch. s. 14(2) amended by No. 9/2017 s. 6. (2) If the Regulatory Authority asks the applicant for further information under this section, the period from the making of the request until the provision of the further information is not included in the period referred to in section 15 for the Regulatory Authority to make a decision on the application. Sch. s. 14(3) inserted by No. 43/2022 s. 17(2). (3) If the Regulatory Authority requires the applicant to undergo an assessment under this section, the period from the giving of the notification until the conduct of the assessment is not included in the period referred to in section 15 for the Regulatory Authority to make a decision on the application. 15 Grant or refusal of provider approval (1) On an application under section 10, the Regulatory Authority may— (a) grant the provider approval; or (b) refuse to grant the provider approval. A provider approval is granted subject to conditions in accordance with section 19. (2) The Regulatory Authority must not grant a provider approval unless the Authority is satisfied as to the matters in section 12. (3) Subject to subsection (4), the Regulatory Authority must make a decision on the application within 60 days after the Regulatory Authority receives the application. Note to Sch. s. 15(3) amended by No. 13/2022 s. 8, substituted as Notes by No. 43/2022 s. 18. **Notes** 1. If further information is requested under section 14(1)(a), the period between the making of the request and the provision of the information is not included in the 60 day period. 2. If an assessment is required under section 14(1)(c), the period between the giving of the notification and the conduct of the assessment is not included in the 60 day period. (4) The period referred to in subsection (3) may be extended by up to 30 days with the agreement of the applicant. (5) The Regulatory Authority is taken to have refused to grant a provider approval if the Regulatory Authority has not made a decision under subsection (1)— (a) within the relevant period required under subsection (3); or (b) within the period extended under subsection (4)— 16 Notice of decision on application The Regulatory Authority must give written notice to the applicant of a decision under section 15 and the reasons for that decision within 7 days after the decision is made. 17 Duration of provider approval A provider approval granted under section 15 continues in force until it is cancelled or surrendered under this Law, or this Law as applying in a participating jurisdiction.