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Vocational Education and Training Funding Amendment Bill 2000
Date Introduced: 21 June 2000
House: House of Representatives
Portfolio: Education, Training and Youth Affairs
Commencement: Royal Assent
To amend the Vocational Education and Training Funding Act 1992 in order to
- supplement funding for vocational education and training provided to the Australian National Training Authority (ANTA) for distribution to the States and Territories in the year 2000, in line with real price movements, and
- appropriate funds for vocational education and training for the year 2001.
Commonwealth role in the provision and support of vocational education and training (VET)
The Commonwealth provides grants to the States and Territories for the provision and support of vocational education and training primarily in the Technical and Further Education system. Arrangements first established under the Vocational Education and Training Funding Act 1992 provide for a single pool of funds comprising the previously separate recurrent expenditure grants and capital expenditure grants to be passed to the Australian National Training Authority (ANTA) for allocation among the States and Territories.(1) Funding decisions are made consistent with a national strategic plan for vocational education and training (VET) based on agreed national objectives and priorities. On 1998 figures, all governments pay about 44 per cent of VET costs, business 45 per cent and individuals about 11 per cent. Commonwealth funds make up approximately one third of public expenditure on the vocational education and training system in Australia.
The functions of ANTA include allocating and remitting funds to State and Territory training agencies on the basis of guidelines determined by the Ministerial Council, and administering any programs agreed by the Ministerial Council as requiring national delivery, within the guidelines approved by the Ministerial Council.(2)
Funding arrangements under the ANTA Agreement
The Vocational Education and Training Funding Act 1992 gave effect to the ANTA Agreement, announced by the then Prime Minister on 21 July 1992, between the Commonwealth, States and Territories for the establishment of ANTA. Under the Agreement, funding arrangements were made for the 1993-95 triennium. These included the Commonwealth's agreement to maintain its then current financial support for VET; provide an injection of $100 million in recurrent funding provided in the November 1991 One Nation economic statement; and an additional $70 million of growth funding for each year of the triennium. These arrangements were subsequently extended to 1996 and 1997 by the then Labor government.
In the 1996-97 Budget, the new Coalition government introduced an efficiency dividend on Commonwealth own-purpose outlays which resulted in a 5 per cent reduction of funding provided to ANTA. In addition, the 5 per cent real growth on base recurrent funding was discontinued.
In its 1997-98 Budget the Commonwealth reduced annual funding to the States and Territories appropriated under the Vocational Education and Training Funding Act 1992, to provide 'an incentive to the States to achieve efficiency gains in their VET operations'.(3) This reduction, which took effect from 1 January 1998 and was to be carried into subsequent years, was estimated to be approximately $20 million in the 1998 calendar year.
Negotiations for a revised ANTA Agreement took place in 1997.(4) In April 1998 Commonwealth, State and Territory vocational education and training Ministers reached consensus on a three-year funding agreement. Under the revised ANTA Agreement, the Commonwealth is committed to maintain its 1998 funding in real terms ($904.144 million in 1998) for the three years 1998 to 2000. The States and Territories agreed to maintain their level of activities, and to the principle of growth through efficiencies. The revised Agreement therefore locked in the reduction in annual funding announced in the 1997-98 Budget.
Consistent with the Commonwealth's commitment under the revised Agreement to maintain real funding in 1998 terms, the current Bill provides supplementation for the year 2000 appropriation in accordance with real price movements reflected in Treasury indices, and makes provision for base funding for the year 2001.
The effect of item 9 of Schedule 1 is to amend the amounts payable to ANTA under section 9 of the Vocational Education and Training Funding Act 1992 in the following manner:
- increasing the amount payable for 2000 from $918.352 million to $931.415 million, and
- providing a base funding appropriation of $931.415 million for the year 2001.
- For a brief outline of arrangements prior to 1992 see Ian Ireland and Carol Kempner, 'Vocational Education and Training Funding Amendment Bill 1996', Bills Digest no. 34, 1996-97, Department of the Parliamentary Library, 1996.
- More information about the operation of ANTA is available on their website at http://www.anta.gov.au .
- Budget Paper no. 2, 1997-98, p. 40.
- For further background on the revised ANTA Agreement see Rosemary Bell and Carol Kempner, 'Australian National Training Authority Amendment Bill 1998', Bills Digest no. 35, 1998-99, Department of the Parliamentary Library, 1998.
14 August 2000
Bills Digest Service
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