Supplementary Order Paper No 118

No 118

House of Representatives

Supplementary Order Paper

Tuesday, 14 December 2021

Education and Training Amendment Bill (No 2)

Proposed amendments

Hon Chris Hipkins, in Committee, to move the following amendments:

New clause 3A

Before clause 4 (page 5, before line 12), insert:

3A Section 2 amended (Commencement)

In section 2(1), replace “17 and 18” with 17 to 18C.

New clauses 5A to 5D

After clause 5 (page 7, after line 18), insert:

5A Section 17 replaced (Ministerial approval required to apply for licence)

Replace section 17 with:

17 Ministerial approval required to apply for licence

(1)

Despite sections 15 and 16, an individual or entity that intends to operate a licensed early childhood service (the applicant) must apply to the Minister for approval to apply for a licence to operate the service.

(2)

The Minister may grant approval, but, before doing so, must take into account—

(a)

a high-level assessment of the relevant attributes of the area to be served, including (without limitation) the demography of the area, the needs of the communities in the area, the needs of the children in the area, and the availability of licensed early childhood services in the area with different offerings (for example, the provision of te reo Māori); and

(b)

any statement issued under section 17D that is relevant to the application; and

(c)

the suitability of the applicant and of every individual involved in the governance of the proposed service, which, as a minimum, requires the Minister to consider and determine whether each individual is a fit and proper person (including by considering the Secretary’s assessment provided under section 18(4)); and

(d)

the applicant’s financial position (including by considering the Secretary’s assessment provided under section 18A(3)); and

(e)

the licensing history of—

(i)

any other early childhood service previously or currently owned, operated, or managed by, or otherwise connected with, the applicant; and

(ii)

every individual involved in the governance of the proposed service; and

(f)

the applicant’s capability to effectively establish and provide the service to which the application relates; and

(g)

any other matter that the Minister considers is relevant to the application.

(3)

If the Minister considers information referred to in subsection (2) is insufficient to decide whether to grant approval, the Minister may—

(a)

ask the applicant to supply more information:

(b)

ask an individual or entity other than the applicant to supply any information that the Minister considers relevant to the application.

(4)

In deciding whether to grant approval, the Minister—

(a)

may consider the application at the same time as any other application for approval to apply for a licence, regardless of the date on which the applications were received:

(b)

is not required to defer a decision on the application solely because another applicant for approval to apply for a licence has appealed under section 18C against an assessment by the Secretary or has commenced judicial review proceedings.

(5)

An individual or entity may not apply for a licence without the Minister’s approval.

(6)

Approval to apply for a licence is irrelevant to the granting of a licence (as a licence may only be granted in accordance with regulations made under section 636).

(7)

If the Minister grants approval to an applicant,—

(a)

the applicant must inform the Secretary of any change in circumstances that may have materially affected the Minister’s decision to grant the approval:

(b)

that approval cannot be transferred to another individual or entity.

5B New sections 17A to 17D inserted

After section 17, insert:

17A Conditions on approval to apply for licence

(1)

When approving an application to apply for a licence to operate a licensed early childhood service, the Minister may impose conditions on the approval as the Minister thinks fit, including conditions—

(a)

relating to the nature, capacity, or location of the proposed service; and

(b)

that require the applicant to provide regular progress reports to the Ministry.

(2)

The Minister may at any time—

(a)

impose new conditions on the approval; or

(b)

amend or revoke any existing conditions.

(3)

When a condition is imposed, the Minister may specify a date by which the applicant must satisfy the condition.

17B Expiry of approval to apply for licence

(1)

When approving an application to apply for a licence to operate a licensed early childhood service, the Minister must specify an expiry date for the approval that is no more than 2 years after the date on which the approval is given.

(2)

However, the Minister may, at any time before an expiry date,—

(a)

extend the expiry date to a date that is no more than 2 years after the date on which approval is granted; or

(b)

if the Minister considers that there are exceptional circumstances that make an extension desirable, extend the expiry date for up to an additional 2 years to a date that is more than 2 years after the date on which approval is granted.

(3)

An extension under subsection (2)(b) must not extend the expiry date to a date that is more than 4 years after the date on which approval is granted.

(4)

For the purposes of subsection (2)(b), exceptional circumstances includes the impacts of natural disasters or other circumstances beyond the applicant’s control on the proposed licensed early childhood service or the building in which the proposed service is to be located.

17C Revocation of approval to apply for licence

(1)

The Minister may revoke an approval to apply for a licence to operate a licensed early childhood service if the Minister is satisfied that 1 or more of the following grounds apply:

(a)

the individual or entity granted the approval is not complying, or has not complied, with 1 or more of the conditions of approval imposed under section 17A:

(b)

a significant change has occurred in the circumstances relating to the proposed licensed early childhood service that is likely to have materially affected the Minister’s decision to grant the approval:

(c)

the individual or entity granted the approval has provided false or misleading information in their application.

(2)

The Minister may not revoke an approval under subsection (1) unless the Minister has—

(a)

taken all reasonable steps to give the individual or entity granted the approval written notice—

(i)

of the Minister’s intention to revoke the approval; and

(ii)

that the individual or entity may respond in writing to the Minister addressing reasons the approval should not be revoked; and

(b)

if the individual or entity provides a response within a reasonable time, taken that response into account.

17D Minister may issue statements relating to network of licensed early childhood services

(1)

The Minister may, for the purpose of providing potential applicants for approval under section 17 with information about the network of licensed early childhood services, issue 1 or more statements that set out information relating to the network, at either a national or regional level, including—

(a)

the Government’s strategic priorities for the establishment of licensed early childhood services; and

(b)

information about the supply, forecast growth, demand, and need for licensed early childhood services; and

(c)

any other information that the Minister considers relevant to applications for approval to apply for a licence to operate a licensed early childhood service under section 17.

(2)

If a proposed statement relates to the Government’s strategic priorities referred to in subsection (1)(a), the Minister must, before issuing a statement, consult with the licensed early childhood services sector and with Māori.

(3)

A statement must be published in the Gazette.

5C Section 18 replaced (Persons approved to apply for licence must be fit and proper)

Replace section 18 with:

18 Secretary to assess whether applicants for approval to apply for licenses are fit and proper

(1)

For every application under section 17 for approval to apply for a licence to operate a licensed early childhood service, the Secretary must make an assessment of whether each individual who is an applicant, or who is involved in the governance of the proposed service, is a fit and proper person to be granted approval.

(2)

In making an assessment under subsection (1), the Secretary must take into account whether each individual—

(a)

has had a satisfactory Police vet for the purposes of the application:

(b)

has been convicted of an offence that the Secretary considers is relevant to providing an early childhood service (for example, an offence involving harm to children, violence, or fraud):

(c)

has been involved in or associated with an organisation that has been convicted of an offence that the Secretary considers is relevant to providing an early childhood service:

(d)

has any health conditions that may affect the individual’s ability to comply with this Act and with regulations made under section 636:

(e)

is, or has been, subject to a property order or personal order under the Protection of Personal and Property Rights Act 1988:

(f)

owes, or has owed, money to the Crown, including in respect of bodies that the individual has been involved in managing:

(g)

has been adjudicated bankrupt under the Insolvency Act 2006 or the Insolvency Act 1967:

(h)

has been prohibited from being a director or promoter of, or being concerned or taking part in the management of,—

(i)

a company under the Companies Act 1993; or

(ii)

any other body corporate:

(i)

has, or has had, any role as a governing member of an entity or organisation that became insolvent, including being placed in liquidation, receivership, or voluntary administration:

(j)

is, or has been, subject to any prohibition against acting as an employer or an officer of an employer under the Employment Relations Act 2000:

(k)

has had previous involvement in an early childhood service in respect of which—

(i)

an application for a licence was refused; or

(ii)

a licence was suspended or cancelled:

(l)

any other criteria that the Secretary considers relevant.

(3)

In making an assessment under subsection (1), the Secretary may give the weight that the Secretary thinks fit to each of the criteria in subsection (2), having regard to the degree and nature of the individual’s involvement in the proposed service.

(4)

Once an assessment is finalised, the Secretary must provide the assessment to the Minister to inform the Minister’s consideration under section 17(2)(c).

(5)

However, if the Secretary intends to provide an assessment to the Minister that reflects adversely on the application, the Secretary must, before finalising and providing the assessment to the Minister, follow the process set out in section 18B.

5D New sections 18A to 18C inserted

After section 18, insert:

18A Secretary to assess financial viability of proposed early childhood service

(1)

For every application under section 17 for approval to apply for a licence to operate a licensed early childhood service, the Secretary must make an assessment of the financial viability of the proposed service.

(2)

In making the assessment, the Secretary may consider whether the applicant has access to, or has a credible plan to obtain access to, sufficient resources to effectively establish and provide the service.

(3)

Once an assessment is finalised, the Secretary must provide the assessment to the Minister to inform the Minister’s consideration under section 17(2)(d).

(4)

However, if the Secretary intends to provide an assessment to the Minister that reflects adversely on the application, the Secretary must, before finalising and providing the assessment to the Minister, follow the process set out in section 18B.

18B Notification of adverse assessment

(1)

This section applies to—

(a)

an assessment of whether an individual is a fit and proper person to be granted approval to which section 18(5) applies:

(b)

an assessment of financial viability to which section 18A(4) applies.

(2)

Before finalising an assessment and providing it to the Minister, the Secretary must—

(a)

notify the applicant in writing of the findings of the assessment; and

(b)

give the applicant an opportunity to respond.

(3)

The Secretary may only finalise an assessment and provide it to the Minister under section 18(4) or 18A(3) after—

(a)

considering the applicant’s response; or

(b)

if the applicant does not respond, the elapse of 21 days after the applicant received written notice of the assessment.

(4)

The Secretary must notify the applicant in writing of the findings of the final assessment that is provided to the Minister, including any changes made as a result of the applicant’s response.

18C Appeal against adverse assessment

(1)

An applicant who is the subject of a final assessment by the Secretary that is provided to the Minister under section 18(4) or 18A(3) and that reflects adversely on the application for approval to apply for a licence to operate a licensed early childhood service may appeal against that assessment to the District Court.

(2)

An appeal under this section must be made within 14 days after receipt of written notice of the findings of a final assessment.

(3)

Despite an appeal being made under this section in relation to an assessment, the Minister may make a decision under section 17 in reliance upon the assessment.

Clause 62

After clause 62(1) (page 29, after line 17), insert:

(1A)

In Schedule 1, replace clause 9 with:

9 Review of section 17B

(1)

The Minister must, by no later than 1 August 2025, review, or arrange for a review of, section 17B.

(2)

The review must—

(a)

consider the purpose, operation, and effectiveness of section 17B; and

(b)

assess whether any amendments to section 17B are necessary or desirable.

(3)

The Minister must prepare a report of the review, which must be published on an Internet site maintained by or on behalf of the Ministry.

Schedule 1

In Schedule 1, new Part 4, after clause 77 (page 32, after line 13), insert:

77A Transitional provision relating to applications for licences to operate early childhood services

(1)

This clause applies to an application for a licence under the Education (Early Childhood Services) Regulations 2008—

(a)

that is made before the date on which sections 17 to 18C come into force; and

(b)

in relation to which the requirements of those regulations for the provision of information and evidence relating to the application have been met.

(2)

Sections 17 to 18C do not apply to the application.

Schedule 4

In Schedule 4, after the item relating to the Education (Domestic Tertiary Student Contract Dispute Resolution Scheme) Rules 2021 (page 43, after line 29), insert:

Education (Early Childhood Services) Regulations 2008 (SR 2008/204)

In regulation 3, insert in its appropriate alphabetical order:

applicant, in relation to an application for a licence relating to a licensed early childhood service, means,—

(a)

if an individual has been granted approval under section 17 of the Act to apply for a licence to operate the service, that individual:

(b)

if an entity has been granted approval under section 17 of the Act to apply for a licence to operate the service, an individual who is involved in the governance of the entity:

Replace regulation 5(1) with:

(1)

Every application for a licence must be made by the applicant on a form provided by the Secretary for the purpose.

In regulation 6(3), before paragraph (a), insert:

(aaa)

the individual or entity that intends to operate the licensed early childhood service has been granted approval under section 17 of the Act to apply for a licence to operate a service and—

(i)

that approval has not expired or been revoked; and

(ii)

any conditions imposed on the approval under section 17A of the Act have been satisfied; and

Replace regulation 6(3)(b) with:

(b)

each individual who is an applicant or who is involved in the governance of the proposed service is a fit and proper person to be involved in the governance of the service.

Replace regulation 7 and 8 with:

7 Applicant must make statutory declaration

Every application must be accompanied by a declaration made by the applicant setting out, in the manner provided in the Oaths and Declarations Act 1957, in relation to the applicant and each individual who is involved in the governance of the proposed service,—

(a)

any previous conviction for any offence:

(b)

any involvement in, or association with, an organisation that has been convicted of an offence:

(c)

any history of health conditions that may affect the individual’s ability to comply with the Act, these regulations, and any regulations made under section 636 of the Act:

(d)

any property order or personal order under the Protection of Personal and Property Rights Act 1988 to which the person is, or has been, subject:

(e)

any sum of money owed, or previously owed, to the Crown, including in respect of bodies that the individual has been involved in managing:

(f)

any adjudication of bankruptcy under the Insolvency Act 2006 or the Insolvency Act 1967:

(g)

any prohibition on being a director or promoter of, or being concerned or taking part in the management of,—

(i)

a company under the Companies Act 1993; or

(ii)

any other body corporate:

(h)

any current or previous role as a governing member of an entity or organisation that became insolvent, including being placed in liquidation, receivership, or voluntary administration:

(i)

any prohibition against acting as an employer or an officer of an employer under the Employment Relations Act 2000 to which the individual is, or has been, subject:

(j)

any previous involvement in an early childhood service in respect of which—

(i)

an application for a licence was refused; or

(ii)

a licence was suspended or cancelled:

(k)

any other matter the Secretary considers relevant and in respect of which the Secretary requires a declaration.

8 Fit and proper persons

For the purpose of determining whether the individual who is the applicant and each individual who is involved in the governance of the proposed service is a fit and proper person to be involved in the governance of the proposed service, the Secretary may have regard, in relation to all those individuals, to the following matters:

(a)

whether the individual has had a satisfactory Police vet for the purposes of the application:

(b)

any previous conviction for any offence that the Secretary considers is relevant to providing an early childhood service (for example, an offence involving harm to children, violence, or fraud):

(c)

any involvement in or association with an organisation that has been convicted of an offence that the Secretary considers is relevant to providing an early childhood service:

(d)

any history of health conditions that may affect the individual’s ability to comply with the Act, these regulations, and any regulations made under section 636 of the Act:

(e)

any property order or personal order under the Protection of Personal and Property Rights Act 1988 to which the individual is, or has been, subject:

(f)

any sum of money owed, or previously owed, to the Crown, including in respect of bodies that the individual has been involved in managing:

(g)

any adjudication of bankruptcy under the Insolvency Act 2006 or the Insolvency Act 1967:

(h)

any prohibition on being a director or promoter of, or being concerned or taking part in the management of,—

(i)

a company under the Companies Act 1993; or

(ii)

any other body corporate:

(i)

any current or previous role as a governing member of an entity or organisation that became insolvent, including being placed in liquidation, receivership, or voluntary administration:

(j)

any prohibition against acting as an employer or an officer of an employer under the Employment Relations Act 2000 to which the individual is, or has been, subject:

(k)

any previous involvement in an early childhood service in respect of which—

(i)

an application for a licence was refused; or

(ii)

a licence was suspended or cancelled:

(l)

any other matter that the Secretary considers relevant.

Replace regulation 11(1)(c) with:

(c)

the applicant and each individual who is involved in the governance of the proposed service is a fit and proper person to be involved in the governance of the proposed service; and

Replace regulation 13(c) with:

(c)

the applicant and each individual who is involved in the governance of the service provider is a fit and proper person.

After regulation 22(5)(d), insert:

(e)

that are a continuation of any of the conditions imposed under section 17A of the Act on an approval to apply for a licence to operate a licensed early childhood service.

Explanatory note

This Supplementary Order Paper amends the Education and Training Amendment Bill (No 2) (the Bill).

New clause 3A amends section 2 of the Education and Training Act 2020 (the Act) to provide that new sections 17 to 18C come into force on the same day that sections 17 and 18 (which are replaced by the new sections) were to come into force.

New clause 5A replaces section 17 of the Act, which relates to the Minister of Education’s power to grant approval to an individual or entity to apply for a licence to operate a licensed early childhood service. New section 17 re-enacts section 17 with changes, including—

  • adding, as new factors that the Minister must take into account when considering granting an approval, the applicant’s capability to establish and provide the service and any other matter the Minister considers relevant; and

  • empowering the Minister to ask another individual or entity to provide information relevant to an application; and

  • clarifying that the Minister’s ability to consider and decide on an application is not affected by other applications; and

  • including a requirement for a successful applicant to inform the Minister of any change in circumstances that may have materially affected the application.

New clause 5B inserts new sections 17A to 17D into the Act.

New section 17A provides that the Minister may impose conditions on an approval to apply for a licence.

New section 17B requires the Minister to specify an expiry date for any approval that is granted. This section allows the expiry date to be extended within specified limits.

New section 17C provides that the Minister may revoke an approval on specified grounds. This section also requires the Minister to notify the affected individual or entity of the intended revocation and give the individual or entity the opportunity to respond.

New section 17D enables the Minister to issue statements setting out information relating to the network of licensed early childhood services nationally or regionally.

New clause 5C replaces section 18 of the Act, which relates to assessing whether an applicant is a fit and proper person. New section 18 shifts the responsibility for undertaking an assessment of whether an applicant or individual involved in the governance of a proposed service is a fit and proper person to be granted approval to apply for a licence from the Minister to the Secretary for Education. The new section re-enacts the criteria that must be taken into account when making the assessment with minor variations. The Secretary must provide a finalised assessment to the Minister to inform the Minister’s decision regarding the application.

New clause 5D inserts new sections 18A to 18C into the Act.

New section 18A provides that the Secretary must make an assessment of the financial viability of a proposed service as part of the consideration of every application made under new section 17. The Secretary must provide the assessment to the Minister to inform the Minister’s decision regarding the application.

New section 18B requires the Secretary to notify an applicant if the Secretary intends to provide the Minister with a fit and proper person assessment or financial viability assessment that reflects adversely on the applicant before the Secretary provides the assessment to the Minister.

New section 18C provides for an applicant to appeal to the District Court against an adverse intended fit and proper person assessment or financial viability assessment by the Secretary.

Clause 62 of the Bill is amended to insert new subclause (1A), which replaces clause 9 of Schedule 1 of the Act. This is a consequential amendment relating to the replacement of section 17(6) with new section 17B of the Act.

Schedule 1 of the Bill is amended to insert new clause 77A into new Part 4 of Schedule 1 of the Act. The new clause provides a transitional provision relating to applications for licences to operate early childhood services that are made before the date of commencement of the Bill.

Schedule 4 of the Bill is amended to insert consequential amendments in the Education (Early Childhood Services) Regulations 2008.

Departmental disclosure statement

The Ministry of Education is required to prepare a disclosure statement to assist with the scrutiny of this Supplementary Order Paper. The disclosure statement provides access to information about any material policy changes to the Bill and identifies any new significant or unusual legislative features of the Bill as amended.

Regulatory impact assessment

The Ministry of Education produced a regulatory impact assessment on 5 November 2021 to help inform the new policy decisions taken by the Government relating to the contents of this SOP.