Bills Digest no. 60 2013–14

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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Carol Ey
Social Policy Section
10 April 2014

 

Contents

The Bills Digest at a glance

Purpose of the Bill

Structure of the Bill

Background

Committee consideration

Policy position of non-government parties/independents

Position of major interest groups

Financial implications

Statement of Compatibility with Human Rights

Key issues and provisions

Concluding comments

 

Date introduced:  27 February 2014

House:  House of Representatives

Portfolio:  Education

Commencement: Commencement dates for each Schedule are specified in clause 2 of the Bill.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

 

The Bills Digest at a glance

Purpose of the Bill

• The Bill is primarily intended to implement the recommendations of the Review of Higher Education Regulation to reduce the red tape associated with the registration of higher education providers and the accreditation of courses.

Background

• The Tertiary Education Quality and Standards Agency (TEQSA) was created in 2011 as the national regulator for higher education and commenced operation in 2012. Concerns have been raised about the slowness of TEQSA’s decision-making and the cumbersome appeal processes.
• The Review of Higher Education Regulation was commissioned by the previous Government to examine options for removing the administrative burden on higher education providers. Its recommendations, which included changes to the structure and functions of TEQSA, have subsequently been endorsed by the current Government.

Key elements

• TEQSA will lose its quality assessment function, to allow it to focus on its core regulatory functions.
• TEQSA is to be reduced in size, and additional powers will be able to be delegated to staff of the agency. In order to implement these recommended changes, the appointments of the current Commissioners will be terminated, and new Commissioners appointed.
• The roles of Chief Commissioner and Chief Executive Officer will be split.
• The Minister will have greater power to give directions to TEQSA, and will be required to approve TEQSA’s schedule of fees.

Key issues

• There is no detail on how quality assurance will be undertaken in the higher education sector once this function is removed from TEQSA.
• The decision to spill the Commissioner positions and the proposed changes increasing the power of the Minister over TEQSA’s functions and operations, have raised concerns about the potential for increased political interference in TEQSA’s operations.

Purpose of the Bill

The purpose of the Tertiary Education Quality and Standards Agency Amendment Bill 2014 (the Bill) is to amend the Tertiary Education Quality and Standards Agency Act 2011 (the Act)[1] to implement the recommendations of the Review of Higher Education Regulation (the Review).[2]

Structure of the Bill

The Bill is structured in eight parts:

• Part 1 removes the Tertiary Education Quality and Standards Agency’s (TEQSA’s) quality assessment function
• Part 2 extends the range of powers that can be delegated by TEQSA’s Commissioners to staff members
• Part 3 gives TEQSA the power to extend the period of provider registration or course accreditation to enable it to manage these processes more flexibly
• Part 4 provides for flexibility in the number of Commissioners. It also provides for the termination of the appointments of the current Commissioners
• Part 5 separates the roles of Chief Commissioner and the Chief Executive Officer (CEO), and provides for the termination of the appointment of the current Chief Commissioner
• Part 6 simplifies the notification process for successful applications for registration and accreditation as well as some other minor technical amendments
• Part 7 extends the directions the Minister can give to TEQSA and
• Part 8 requires TEQSA to obtain Ministerial approval of the fees it charges.

Background

The Bradley Review of higher education recommended the establishment of a national regulatory body to carry out accreditation and quality audit functions to reduce the complexity of existing arrangements and assure the quality of higher education courses.[3] The recommendation was implemented through the Tertiary Education Quality and Standards Agency Act 2011 which was developed following extensive consultation with the sector and with state and territory governments.[4] The agency commenced operations in January 2012.

In 2013, the Gillard Government commissioned Professor Kwong Lee Dow and Professor Valerie Braithwaite to undertake a review of higher education regulation.[5] The report of the Review was tabled in August 2013. The Review noted that much of the concern in the sector about regulation was in relation to TEQSA’s approach to regulation. The Review considered that TEQSA should be smaller and have less functions, and in particular that quality assurance functions were better delivered through other means. Recommendation 1 of the Review states:

The Government should reduce TEQSA’s functions to focus on its core activities as a regulator; to reduce the number of Commissioners over time and revise their roles and responsibilities to allow greater decision making‑responsibilities [sic] to be assigned to case managers or other TEQSA staff as appropriate.[6]

The Government has committed to implementing the Review recommendations.[7]

Committee consideration

Senate Education and Employment Legislative Committee

The Bill has been referred to the Senate Education and Employment Legislation Committee for inquiry and report by 16 June 2014. Details of the inquiry are at: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment/TEQSA.[8]

Parliamentary Joint Committee on Human Rights

The Committee noted that the Bill engages the rights to work and rights in work in relation to the termination of the appointments of the TEQSA Commissioners, but considered that the statement of compatibility provides sufficient justification for the limitation of these rights.[9]

In relation to the right to education, the Committee considered that the statement of compatibility did not adequately address how the quality of higher education was to be assured, with the removal of TEQSA’s quality assessment function. The Committee therefore intends to write to the Minister to seek further information on how quality standards are to be maintained.[10]

Policy position of non-government parties/independents

While supporting the thrust of the Review recommendations, the Labor Party has raised concerns about a number of aspects of this legislation, specifically:

• the absence of a broader policy response to the Review
• the lack of consultation prior to the introduction of the legislation
• the termination of the appointments of the current Commissioners
• the implications of the changes to TEQSA’s delegation powers and
• the broadening of the Minister’s power to direct TEQSA’s operations.[11]

While the Bill is implementing several of the recommendations of the Review, and the Government has committed to implementing all the Review recommendations, there has been no announcement regarding other recommendations, for example in developing mechanisms for TEQSA to consult with stakeholders, possibly through establishment of an overarching advisory council (as set out in recommendation 2 of the Review).

The lack of consultation prior to the introduction of the Bill is also contrary to the advice of the Review. It recommended that in implementing any changes to the regulatory framework, the Government should:

Consult, and if in doubt, consult again, and in doing so, ensure the fullest range of providers and stakeholders are represented in consultations.[12]

Position of major interest groups

Despite the lack of consultation, the introduction of this legislation has been warmly welcomed by the higher education sector. Universities Australia, the peak body representing the university sector, noted that ‘all parts of the higher education sector have expressed broad support for the reforms’, and has urged the Senate Committee Inquiry to ‘complete its work expeditiously’.[13]

The Australian Council for Private Education and Training (ACPET), which represents private education providers, generally welcomed the introduction of the Bill, noting that it showed ‘a government clearly committed to lifting onerous and unnecessary regulation on high performing higher education institutions’.[14] However ACPET has expressed some concern at the removal of TEQSA’s quality assessment function, which allowed the agency to conduct sector-wide thematic reviews. ACPET noted that although these reviews were time and resource intensive for both providers and TEQSA, this didn’t mean that the resulting analysis was not useful.[15]

Professor Lee Dow, one of the authors of the Review, supports the legislation, noting that it implements a number of the recommendations of the Review. He also commented that while the Review did not specifically recommend splitting the roles of the Chief Commissioner and the CEO, he considered this ‘a valuable advance’, and noted that given this change, it was logical to spill the Commissioner positions, and also considered that ‘a fresh start would be helpful all round.’[16]

Financial implications

There may be limited savings from the reduction in the number of TEQSA Commissioners, however this has not been identified in the Explanatory Memorandum. The amendments contained in the Bill are expected to lead to greater efficiency in the processes undertaken by TEQSA which could have a positive financial impact on higher education providers.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[17] As noted above, the Joint Parliamentary Committee has requested further information on quality assurance measures.

Key issues and provisions

Part 1—Quality assessments

Part 1 proposes removal of all references to ‘quality assessments’ from the Act. As noted above, this was one of the recommendations of the Review, in order to allow TEQSA to focus on its core regulation functions. While the Review noted that the quality assessment functions would be better delivered through other means, at this stage there has been little explanation of how the Government will support this, if TEQSA is no longer undertaking this function. This is the aspect on which the Joint Parliamentary Committee on Human Rights has requested further information.

Even within the higher education sector, some concern has been expressed at TEQSA cancelling a proposed survey of English language proficiency standards, without the identification of an alternative mechanism for quality assurance, with one commentator suggesting that universities’ internal processes were not enough to underpin standards.[18]

Currently section 60 provides that TEQSA may review or examine any aspect of an entity’s operations. It may assess the quality of the higher education provided and whether there are any systemic issues relating to a particular course of study which leads to a higher education award. Item 2 repeals section 60.

Part 2—Delegations

Part 2 provides for greater capacity to delegate the powers of the Commissioners to staff members of TEQSA. The current Act restricts the powers which can be delegated to staff. This has resulted in a considerable backlog of work for the Commissioners, leading to delays in providers gaining appropriate registration. It has also meant that appeals against decisions cannot be reviewed internally, but have to be escalated to the Administrative Appeals Tribunal, resulting in additional cost and delay.

Section 199 relates to the delegation powers of TEQSA. Currently subsection 199(2) lists all the powers not delegable under subsection 199(1). Section 200 sets out the powers that are only delegable to Commissioners. Items 7 and 8 propose repeal of sections 199(2) and 200 of the Act. The only remaining proposed constraint is specified in item 7, which is that the power to make, vary or revoke a legislative instrument may not be delegated.

While the Labor Party has expressed some concern at the effect of these proposed amendments, these provisions would appear to be consistent with the Review recommendations, and to meet the demands of higher education providers for faster decision-making processes and less onerous appeal mechanisms.

Part 3—Period of registration or accreditation

Part 3 proposes changes to allow TEQSA to extend the period of registration of a provider (proposed section 37A, inserted by item 17) or the period of accreditation of a course (proposed section 57A, inserted by item 20) beyond the current limit of seven years.[19] The purpose of this amendment is to allow TEQSA to align processes with similar requirements, such as accreditation of a course and registration of the provider of that course, or accreditation of a course under the Act and registration as a provider under the Education Services for Overseas Students Act 2000 (also administered by TEQSA), potentially avoiding providers completing two separate but overlapping assessment processes in a short time frame. This proposal is consistent with the aim of the legislation to reduce unnecessary red tape for higher education providers, and is also consistent with the Review recommendations to address duplication.

Part 4—Commissioners

The current Act provides for TEQSA to have a full-time Chief Commissioner, two other full-time Commissioners and two part-time Commissioners. The Review considered that this arrangement was inflexible, and recommended that the number of Commissioners be reduced over time.[20] The proposed changes will allow for all Commissioners (including the Chief Commissioner) to be appointed on either a full- or part-time basis, without, as is currently the case, prescribing a required number of each.

Section 133 relates to the constitution of TEQSA and the number of commissioners. Item 25 repeals and replaces paragraph 133(b) to provide greater flexibility in the total number of Commissioners, providing for there to be ‘at least one, but not more than four’ Commissioners in addition to the Chief Commissioner. Item 35 amends subsection 149(3), to provide for a consequential reduction from three to two in the number of Commissioners required for a quorum.

Items 32 and 33 amend section 146 to make some minor amendments to the structure of the provisions concerning the grounds for terminating the appointments of Commissioners by reordering them. These changes are consistent with current drafting practice, and do not represent any change to the possible grounds for termination.

Item 36 is a transitional provision, which terminates the appointments of the current Commissioners (other than the Chief Commissioner) at the commencement of the item, which will be three months after the Act receives Royal Assent (as specified in clause 2). Subitem 36(3) clarifies that these Commissioners may be reappointed.

Item 36, together with the equivalent provision applying to the Chief Commissioner (item 45, in Part 5 of the Bill) are among the more controversial aspects of the Bill. While the Review recommended reducing the number of Commissioners, it proposed that this be done ‘over time’, presumably as positions became vacant. However, as noted above, Professor Lee Dow, one of the authors of the Review, considers that terminating the appointments of the existing Commissioners will provide for a ‘fresh start’.

One report quotes Education Minister Christopher Pyne as saying that a leadership spill was needed in order to simplify and reorganise the regulator. This report also noted that ‘TEQSA had been criticised for heavy-handedness, excessive bureaucracy and delays under its chief commissioner and chief executive Carol Nicoll’.[21]

The Chief Commissioner and three of the other Commissioners commenced their five-year appointments in August 2011.[22] The fifth Commissioner was only appointed on 3 February 2014;[23] an appointment that seems somewhat peculiar given that legislation to terminate the appointment was introduced less than a month later. No explanation has been offered as to why this position was filled on a permanent basis if the Government intended to undertake a new selection process in the near future.

Part 5—Chief Executive Officer

Part 5 proposes the creation of a separate role of Chief Executive Officer (CEO), who will have responsibility for financial and administrative matters. Under the current Act in subsection 153(2), the functions of the CEO are combined with those of the Chief Commissioner. Item 41 proposes new sections 154A to 154K which deal with the arrangements for the appointment and the conditions of employment of the new role of CEO. These conditions are standard arrangements. Proposed section 154L allows the CEO to delegate any or all of his or her powers and functions to a member of staff of TEQSA at the APS Executive Level 1 or higher. This is consistent with the Review recommendations allowing for greater delegation of functions within TEQSA.

Under current subsection 155(1), the Minister may issue directions to the CEO in relation to ‘the exercise of his or her functions’. Item 42 amends subsection 155(1) to also allow the Minister to issue directions to the CEO in relation to ‘the exercise of his or her powers’. Presumably this reflects the fact that the newly-created role of CEO will have powers separate from those of the Commissioners, whereas under the current arrangement the CEO’s powers are those of the Chief Commissioner, and the circumstances under which the Minister may issue directions to Commissioners are covered separately.

Proposed section 155A, inserted by item 43, clarifies that TEQSA cannot issue directions to the CEO in relation to administrative matters concerning financial arrangements or staffing.

Items 44 and 45 are transitional arrangements. Item 44 ensures that ministerial directions given under subsection 155(1) of the Act and in force immediately before commencement of the new provisions are not affected by these amendments. Item 45 terminates the appointment of the Chief Commissioner 21 days after the Act receives Royal Assent. This termination does not prevent the person from being reappointed as a Commissioner. The reason the appointment of the Chief Commissioner is being terminated more quickly than those of the other Commissioners (whose appointments are to be terminated three months after Royal Assent) is unclear.

Part 6—Notification of decisions

The intention of the provisions in Part 6 of the Bill is to simplify the process for the notification of decisions. For example, section 32 of the Act allows TEQSA to impose, vary or revoke registration conditions. Under subsection 32(3), TEQSA may vary or revoke a condition on application by a Higher Education Provider. Item 49 of the Bill inserts proposed subsection 34(2), which provides that where a decision is made to vary or revoke a registration condition under section 32(3) on application by the Higher Education Provider and the decision is in accordance with the application, TESQA is not required to give reasons for its decision. This will reduce administrative requirements. Proposed section 101A, inserted by item 50, imposes a timeframe on the notification of a decision to impose a sanction after making a decision under sections 99,[24] 100[25] or 101[26], and requires reasons to be provided. Currently, the Act states the TEQSA must generally notify a provider of a decision under section 101 and provide reasons, but this is not required for decisions under the other sections.

Part 7—Directions to TEQSA

Under this Part, the grounds on which the Minister can issue directions to TEQSA are considerably expanded. In the current Act, the Minister can only issue directions if the Minister considers that ‘the direction is necessary to protect the integrity of the higher education sector’. The proposed changes to subsection 136(1), made by item 54 of the Bill would expand this to allow directions to TEQSA ‘in relation to the performance of its functions and the exercise of its powers’. As is currently the case, the legislative instruments giving directions are not subject to disallowance under section 42 of the Legislative Instruments Act 2003.[27]

The rationale for this change is to broaden the scope and remove the ambiguity of the Minister’s power to give direction to TEQSA.[28] However this does raise concerns about the extent of TEQSA’s political independence. At the time TEQSA was established, the issue of its independence was raised as a concern by some stakeholders.[29] It was generally considered that section 135 which states that ‘subject to section 136, TEQSA is not subject to direction from anyone in relation to the performance of its functions or the exercise of its powers’, was a sufficient guarantee of independence, given that section 136 was effectively a reserve power to be used for significant issues only. The proposed amendment to subsection 136(1) would seem to directly contradict the intent of section 135. While proposed subsection 136(2), at item 55, limits these directions to general matters only (that is, the Minister would not be able to direct TEQSA in relation to specific providers, for example) the scope of the Minister’s influence over TEQSA’s operations would appear to be significantly extended.

Part 8—Fees

Under section 158 of the Act, TEQSA can determine the fees it may charge for things done in the performance of its functions. Item 57 inserts proposed subsections 158(5) and (6) to provide that such a determination will be subject to the written approval of the Minister, and that TEQSA must give the Minister such information as is reasonably required to make a decision. No rationale has been provided for this change, but it would further increase the Minister’s control over TEQSA’s functions.

Concluding comments

The amendments to the TEQSA Act proposed in this Bill are largely to give effect to the recommendations of the Review of Higher Education Regulation. As such, changes which will improve the efficiency of TEQSA’s operations and provide for simplified processes for appeal are welcomed by the higher education sector. However, concerns have been raised about the lack of detail regarding the quality assurance measures that will replace TEQSA’s quality assessment functions. In addition, the spill of Commissioner appointments and increased powers for the Minister to direct TEQSA’s operations raise concerns about the perceived role of TEQSA as an independent regulator.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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