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Bills Digest No. 155 1998-99 Employment, Education and Training Amendment Bill 1999

Numerical Index | Alphabetical Index

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.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer and Copyright Details

Passage History

Employment, Education and Training Amendment Bill 1999

Date Introduced: 30 March 1999

House: House of Representatives

Portfolio: Education, Training and Youth Affairs

Commencement: On Royal Assent

Purpose

To amend the Employment, Education and Training Act 1988 (hereafter 'the Act') to abolish the National Board of Employment, Education and Training (NBEET) and its subsidiary councils, namely:

the Australian Language and Literacy Council
the Employment and Skills Council
the Schools Council, and
the Higher Education Council (HEC).

The Bill will also amend provisions of the Act so that the Australian Research Council (ARC) will continue as an independent body reporting directly to the Minister.

Background

Origin of NBEET

In October 1987 the then Minister for Employment, Education and Training (Mr Dawkins) announced that there would be a rationalisation of advisory structures in his portfolio. He argued that the creation of the department had brought together an array of advisory bodies and program arrangements that were over-lapping and inappropriate. The changes followed a Task Force report under Mr Charles Halton.

The structure and functions of the National Board of Employment, Education and Training (NBEET) would appear to have been, in part, a reaction to the experience of Governments with both the Schools Commission and the Tertiary Education Commission (TEC). These bodies were different from NBEET in several important ways:

their membership was largely representative of the sectors they dealt with
they were responsible for program administration and thus had larger staffs and a greater capacity to set their own research and reporting agendas, and
the statutory conditions under which they operated also gave them greater scope for independent action.

These characteristics were seen as positive by education bodies and their absence was criticised when the NBEET was established. However, the perspective of Government was somewhat different. Ministers were concerned to receive advice that had some utility in policy terms: this generally meant that the financial implications of the advice did not conflict with the overall Budget strategy. In the mid 1970s both Labor and Liberal Governments felt it necessary to issue the education commissions with guidelines stipulating the overall level of expenditure available for their programs and indicating the broader policy objectives they wished to pursue.

It soon became apparent that if Governments were to define the scope of the major programs (ie. the general recurrent grants) in the annual guidelines, then there was little to be gained by having these programs administered by statutory authority. In September 1985 the responsibility for the general recurrent and capital grants programs was transferred from the Schools Commission to the Department.

In higher education, the abolition of the TEC and the creation of the Unified National System made institutional funding a direct Ministerial responsibility, and established a structure to ensure that institutions were responsive to policy guidelines (the 'education profiles' process). Under this process, individual institutions negotiate agreements with the Department which form the basis for their funding. These agreements must be approved by the Minister.

The new system was open to the charge that it could be subject to political manipulation and a lack of accountability. Unlike Commonwealth funding for schools, which is governed by known formulae and public processes, grants for higher education institutions were to be determined largely in confidential negotiations without the benefit of fixed arithmetic criteria. To safeguard against possible abuse of this process the Senate amended the Employment, Education and Training Act 1988 to require the Higher Education Council to report annually on the operation of the education profiles process after consulting with institutions.

Structure and Role of NBEET

The new advisory arrangements were established by the Employment, Education and Training Act 1988. Their essential features were as follows:

a National Board to report directly to the Minister on all related employment, education and training issues taking into account any written directions or guidelines from the Minister on the Government's broad social, economic and budgetary policies
four Advisory Councils reporting to the Board (the Schools Council, Higher Education Council, Employment and Skills Formation Council and the Australian Research Council)
unlike previous Commissions, the new Board to have no responsibility for program delivery, which was to be left to the Department
a community-based membership of the Board and Councils, and
the position of the Australian Research Council was somewhat different to that of the other Councils. It made direct recommendations to the Minister on the allocation of funds for Commonwealth research support programs, as well as providing policy advice on the same basis as the other Councils (ie. through the Board).

The Employment, Education and Training Amendment Act 1995 added the Australian Language and Literacy Council to the NBEET structure. This body had been operating as a Committee of the Board for several years. Another body within the NBEET umbrella, the Australian International Education Foundation Council, was not a statutory Council but remained a Committee of the Board established under Part IV of the Act.

Government Policy

The Government's 1996 Higher Education Election Policy stated that it would wind up the National Board of Employment, Education and Training (NBEET), while maintaining the Higher Education Council as an independent body reporting directly to the Minister. The Australian Research Council was also to be restructured as an independent body.(1)

In June 1996 the Employment, Education and Training Amendment Bill 1996 was introduced into Parliament to implement the Election Policy. Although the Bill was not passed, from mid-1996 the Board and three Councils wound up their activities in accordance with a request from the Minister. The Higher Education Council and the Australian Research Council continued to operate, with the Board's activities being confined to supporting these Councils. Appointments to the Board and Councils (with the exception of the ARC) were not made as positions fell vacant. Since the resignation in April 1997 of the Chairman of the Board, functions under the Act have been discharged by Acting Chairs appointed by the Minister.

The Minister initially requested that the Australian International Education Foundation Council continue operating until decisions were made regarding its future. This body was eventually abolished in early 1998 and replaced by a new organisation, Australian Education International.

View of the Australian Vice-Chancellors' Committee (AVCC)

The AVCC's has stated that it has no wish to see the return of a Tertiary Education Commission structure which had responsibility for program delivery as well as policy development. It has argued that any higher education advisory body should be independent of both government and universities, with clearly defined functions and an obligation to report publicly.

The AVCC proposed that the HEC be constituted as the body responsible for providing broad policy advice directly to the Minister on the general development of higher education in Australia. It also proposed that the ARC should be responsible for providing advice to the Minister through the HEC on broad policy matters relating to research, but direct to the Minister on the distribution of grant funding and on policies relating to its programs. (2)

Oversight of Higher Education Funding System

Paragraph 25(1)(c) of the Act requires the HEC to report annually on the operation of the 'educational profiles' process and the Higher Education Contribution Scheme. Paragraph 25(1)(d) provides that the HEC is to consult with higher education institutions on the preparation and variation of such profiles. These reports have to be laid before each House of Parliament. The repeal of section 25 will not only abolish the HEC, but will also remove these oversights of the funding process.

In 1999 the Commonwealth will make available some $4.9 billion in operating grants for higher education institutions. These funds are appropriated in global amounts through amendments to the Higher Education Funding Act 1988 and then granted to institutions on the basis of Ministerial determinations which are subject to Parliamentary disallowance. Section 119 of the Higher Education Funding Act requires the Minister to table an annual report setting out these determinations. These reports contain no information on the background or impact of funding decisions.

The background details for Commonwealth funding decisions (including proposed institutional allocations) are provided in an annual Higher Education Funding Report published by the Minister. The most recent of these reports contained extensive data on the performance of the sector as well as the usual information on the distribution of grants.(3) However, this information is presented to Parliament solely at the discretion of the Minister.

Main Provisions

Item 7 of Schedule 1 provides for the abolition of NBEET.

Items 10 and 11 of Schedule 1 provide for the abolition of the Schools Council, the Higher Education Council, the Employment and Skills Council and the Australian Language and Literacy Council.

Item 28 of Schedule 1 inserts a new section 30 that sets out the reporting requirements of the ARC.

Comment: the new reporting requirements for the ARC are essentially the same as those that existed for NBEET (with allowance for the abolition of the other Councils).

Item 34 of Schedule 1 replaces sub-section 32(3) to enable the Minister to appoint an officer or employee of the Australian Public Service as a member of the ARC.

Comment: under the existing provisions such appointments were made by the Minister at the request of NBEET, rather than at the Minister's own discretion.

Item 42 of Schedule 1 replaces section 36 to enable the Minister to establish committees to assist the ARC.

Comment: under the existing provisions such committees were appointed by the Minister at the request of NBEET, rather than at the Minister's own discretion.

Items 67 to75 of Schedule 1 are transitional provisions to ensure that the membership and work of the ARC will continue uninterrupted by the changes to its status.

Concluding Comments

If Parliament wishes to continue to receive annual reports on the education profiles process (including the views of institutions) and the impact of the Higher Education Contribution Scheme then it will be necessary to amend this Bill or the Higher Education Funding Act 1988. If the HEC is abolished then there will be no statutory authority qualified to perform these functions. An alternative approach would be to require the Minister to furnish these reports as part of an annual report also containing:

proposed institutional allocations for the coming year, and
information enabling an assessment of the efficiency and effectiveness of Commonwealth expenditure on higher education.(4)

This would create a statutory requirement for a report similar to the current Higher Education Funding Reports.

Endnotes

Quality, Diversity and Choice The Liberal and National Parties' Higher Education Policy (February 1996), p.7.
AVCC, Shaping Australia's Future Investing in Higher Education The Australian Vice-Chancellors' Committee Submission to the Review of Higher Education Financing andf Policy (20 April 1997).
Department of Education, Training and Youth Affairs, Higher Education Report for the 1999 to 2001 Triennium (March 1999).
The higher education program is well placed to provide such information. The Australian National Audit Office report, The Management of Performance Information for Specific Purpose Payments - The State of Play (Audit Report No.31, 1998-99) concluded that the higher education program provided 'a good example of a program area that has used performance information to better manage risks and to identify distributional impacts from changes in government policy directions' (p.75).

Contact Officer and Copyright Details

Kim Jackson
13 April 1999
Bills Digest Service
Information and Research Services

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Published by the Department of the Parliamentary Library, 1999.