The Committee recommends that not-for-profit entities with a dominant purpose of providing for the care, support and protection of children, including the provision of child care services, should be regarded as charitable.
The Committee received a number of submissions arguing that the provision of child care services should be regarded as a charitable purpose.
In CharityPack the Australian Taxation Office (ATO) lists the provision of child care and playgroup services as non-charitable purposes. However, kindergarten and preschool programs and youth development programs are said to be charitable purposes. In Taxation Ruling TR 96/8 the ATO states that a child care centre is considered not to be a school for the purposes of deductibility of gifts made to a school building fund, but indicates that a preschool kindergarten may qualify as a school.1
The Committee is not aware of any judicial authority relating specifically to the charitable status of child care as it is understood in the Australian context. This may be because the organised provision of child care services is a relatively recent development.
The care of children who may in some way be considered `impotent' (and thus coming directly within the scope of the Preamble to the Statute of Elizabeth) is a charitable purpose. Having regard to the dictionary meaning of impotence as including `helplessness', the courts have recognised as charitable organisations that care for children and young people who are in need because of their immaturity, dependence and vulnerability. These include orphanages and foster care organisations.2
The courts have also found that purposes related to the development of good citizenship and appropriate life skills in young people are charitable, within the broad meaning given by the courts to `the advancement of education' head of charity.3 Thus, organisations such as the Scout Association and Police Citizens' Youth Clubs are regarded as charitable.
Views on the current approach
Many submissions challenged what they regarded as an outdated view that child care centres simply provide `child minding' services to enable parents to participate in the workforce and that they do not have an educational or child developmental purpose.
Most of the submissions that addressed this issue argued that child care services provide significant educational and developmental experiences for children. The Community Child Care Co-operative (NSW) noted that under the Commonwealth's Quality Improvement and Accreditation System, long day care services are specifically required to provide an educational program for children in their care. Such a program is required to incorporate learning experiences appropriate for each child, and to foster intellectual development, language development, personal and social development, fine and gross motor development, creative development and aesthetic awareness.
The Co-operative further noted that the New South Wales Government's Early Childhood Services Policy emphasises that all children's services have a similar role in the provision of educational and developmental opportunities for children. The Co-operative argued that there is no longer a clear differentiation between service types - all offer a mixture of `care' and `education' - and that increasingly the trend is toward multipurpose centres that offer a mix of service types. It stated that often the only difference between preschool and long day care is the funding source, but `at a child's level there is no difference'.
As an example of how the boundaries between service types are becoming less rigid, the Department of Family and Community Services (FaCS) notes that there are now long day care centres which employ qualified preschool teachers and operate preschool programs.
The National Association of Community Based Children's Services argued that child care centres are not merely child minding centres. `They are centres of early childhood development where the early childhood education of children begins in their most formative years in the period of most intense physical and neurological development.'
The Queensland Council of Social Service (QCOSS) argued that child care should be regarded as logically equivalent to aged care, in that both types of services provide care for a vulnerable (though not necessarily disadvantaged) group in society. QCOSS added that, as well as providing a developmentally appropriate, educational and safe environment for children, child care has a wider public benefit in that it supports the education and workforce participation of parents, which in turn supports their families and the broader community in general.
FaCS, which administers the Commonwealth's programs providing financial assistance for child care, noted that a number of not-for-profit organisations which provide child care services as part of a wider portfolio of human services are likely to qualify as charities, whereas those which are solely involved in the provision of child care do not. They argue that this leads to considerable administrative inconvenience and anomalies across the sector.
The Charity Commission for England and Wales generally considers organisations caring for the young to be charitable. In determining the charitable status of a day nursery `established for the purposes of receiving and caring for children between the ages of three and five years', it took the view that the nursery could not receive and care for children in this age group during the day without educating them, providing for their recreation and looking after them in their helplessness.4
On this basis the Charity Commission notes the following as examples of child care organisations that most commonly apply for charitable status: childminding associations; creches; day nurseries; playgroups; after school care services; adoption societies; orphanages; and institutions for young people in care.5
Child care serves a range of purposes for parents and children and delivers both public and private benefits. The issue before the Committee is whether child care should be regarded as a charitable purpose within the definitional framework we are recommending.
The Committee believes that the `care' element of child care clearly serves a charitable purpose. Children do not have the ability to care for themselves because of their immaturity and lack of resources, and as such they represent a vulnerable and helpless section of the community. We regard their care and protection as serving a public benefit, in the same way as the care and protection of helpless and vulnerable aged people is clearly recognised as serving a public benefit, irrespective of whether those assisted are perceived to be `disadvantaged'. This is consistent with the Preamble to the Statute of Elizabeth and centuries of common law interpretation that recognises the relief of `impotence' as a charitable purpose.
FaCS has provided the Inquiry with documentation which confirms that, while the Commonwealth's primary policy objective in providing financial assistance for child care is to facilitate parents' participation in the workforce and the general community, the Commonwealth Child Care program also has a specific aim to `encourage quality outcomes for children in efficiently managed child care services'. In this respect, there is a specific obligation on child care operators to provide for the educational and social development of the children in their care.
Confirming the educational role of child care, Press and Hayes, in a report for the OECD on early childhood education and care in Australia, note that while a national child care program has primarily been linked to economic and family policy outcomes, government attention has been shifting towards a stronger focus on the role played by child care in providing opportunities for children's development, learning and socialisation.6 They note that concerns regarding the development of literacy and numeracy skills, and a desire to enhance later educational outcomes for children, have focused additional attention on the role to be played by early childhood education and care settings. Press and Hayes add that there have been many recent State and Territory initiatives to establish policy frameworks that recognise the integrated nature of early childhood education and child care.7
In the Committee's view, the provision of learning and development opportunities for children in a child care environment is clearly directed towards a long term public benefit, which is well acknowledged in the common law interpretation of the public benefit of education.
The Committee recognises that the availability of child care also provides a private benefit to individual parents because it enables them to participate in employment, education and other activities. However, this can also be regarded as a public benefit, in that through being better able to balance their work and family commitments, parents are able to contribute more effectively to the economic and social wellbeing of the community. Indeed, the fact that governments provide substantial financial assistance for child care suggests that child care is seen as providing a public benefit.
On balance, we consider the private benefit gained from the availability of child care services is outweighed by the broader community benefit. It provides a community benefit through the care, protection and development of a vulnerable section of the community, and through promoting economic and social participation by parents.
In light of the broad community benefit provided by child care, the Committee considers it is appropriate that child care be identified as a charitable purpose within the `advancement of social and community welfare' head of charity.
So far as children who are helpless and vulnerable are concerned, our earlier discussions demonstrate that their care, support and protection is already a recognised charitable purpose. The Committee wishes to confirm this and to ensure that the provision of child care to all children is also a charitable purpose.
That the care, support and protection of children and young people, including the provision of child care services, be considered a charitable purpose.