MINORITY REPORT
A Report by Opposition Senators into the Tradesmen's Rights Regulation
Repeal Bill 1999
1.1 Opposition senators reject the assumption that this bill be regarded
as a piece of machinery legislation giving effect to widely supported
procedures for assessing the skills of new migrants and others in the
workplace.
1.2 The implications of changes to procedure governing skill assessments
has far greater implications for public safety than would be implied by
the fact that only 1,000 or so applications are handled annually by Trades
Recognition Australia (TRA).
1.3 The issue of skill assessments involves regulations governing the
fundamental competency to undertake often potentially dangerous work which
could lead, in the worst case scenario, to loss of life. The Longford
gas explosion in Melbourne clearly highlights the very tragic consequences
of employing people in tasks for which they are inappropriately trained.
The Longford Royal Commission found that a principle cause of the disaster
was a deficiency in the initial or subsequent training of staff.
1.4 Further, the Government followed the recommendation of the Legislation
Review Committee to repeal this legislation but failed to address adequately
the transitional arrangements which the Committee said would need to be
taken up in the implementation of any Government decisions flowing from
its report.
1.5 A serious concern for Opposition senators has been the absence of
detail surrounding exactly what processes the Government is pursuing in
terms of replacing the TRR Act and TRA's role in both domestic and migrant
trade assessment services to ensure equivalence of standards.
1.6 The Government's proposal is deficient in addressing this fundamental
issue. It not only fails the basic social justice test of ensuring that
migrants are not unduly hindered in taking up employment in the area of
their qualification, but also fails to clearly show what measures will
be taken to test competencies to ensure equivalence of standards and ensure
that the door is not opened to a reduction in quality of certification.
1.7 Another serious concern is the basically flawed policy of handing
over to private contractors a training and assessment process which requires
more regulatory rigour than seems likely or possible. Such a change in
policy has the real potential for exploitation of both the public purse
and individual trades people.
1.8 The Government has provided only scant information on the process
to repeal this legislation and instigate RTOs in the role of metal and
electrical trade assessments for Australian residents, including the explanations
and assurances given in the submissions from three government departments
to this inquiry. Even when questioned at the public hearing the departmental
representatives could offer little additional information on the Government's
current position. What we have been told is that the TRR Act will be repealed
and that RTOs will take over from TRA, apparently without replacement
legislation. The Minister for Employment, Workplace Relations and Small
Business, the Hon. Peter Reith, MP, informed Parliament during the debate
on the second reading of the bill that an exposure draft detailing proposed
transition mechanisms, to be implemented through regulation, would be
prepared and circulated to Opposition members and other interested parties.
We think a better way to manage this is to involve the interested parties
in the consultations on the regulations rather than delaying the passage
of the legislation. [1]
1.9 This Committee is unaware if this has taken place. A question thus
arises as to the Government's expectation that the Senate will pass this
legislation? The Government's approach has essentially been to ask the
senate to provide it with a blank cheque. Labor senators are particularly
concerned that if this legislation is not repealed by an Act of Parliament
the Government may render TRA ineffective by the simple process of removing
the administrative apparatus which gives effect to its operation, in similar
style to the process which effectively led to the removal of the National
Board of Employment, Education and Training as a channel for providing
independent advice to government. The Opposition calls on the Government
to provide the details of the processes, guidelines and transitional arrangements
that are to be implemented in place of current system and explanations
of how these will address the various concerns held by the industry sector
and other member of the community over the integrity of the new arrangements.
That is, details of new legislation or regulations to replace the TRR
Act need to be placed before the Senate before the current bill can be
properly debated.
1.10 The Committee questioned the relevant departments on the proposed
arrangements for the new system, in particular the degree of consultation
undertaken before going out to tender for migration skill assessments.
Labor senators believe that there has been insufficient consultation with
the relevant industry bodies to outline the new procedures and resolve
the various transition issues that have been raised. This would appear
to be a significant oversight on the part of the Government given the
need for the industry sector to be confident that people coming through
the system are properly qualified to the level of skills required in the
Australian workplace. A lack of confidence in the system may result in
firms being reluctant to hire new staff, or as a representative from the
Communications, Electrical and Plumbing Union told the Committee, might
result in people being retested by industry bodies. [2]
1.11 A representative from the National Office for Overseas Skills Recognition
(NOOSR) told the Committee that a consultative forum had been held on
12 April 1999 to discuss the draft of the request for tender and involved
various stakeholders including unions, employer groups and migrant organisations.
This consultative forum was claimed to be in line with a recommendation
in the review of the TRR Act undertaken by the Legislation Review Committee.
[3] The role of the broad-based consultative committee
as outlined in the Report of the Legislation Review of the Tradesmen's
Rights Regulation Act 1946 was to provide input on the criteria for
selecting RTOs and in monitoring their performance.
1.12 In evidence given by a representative from NOOSR at the public hearing,
it appeared that the only other role envisaged for the broad-based consultative
forum would be in the review of the arrangements to be undertaken 12 months
after their introduction. [4] Further information
provided to the Committee indicates, however, that the forum may be reconvened
at various other times as a source of information and feedback on performance
and other one off issues. [5] The Federation
of Ethnic Communities' Councils of Australia who were represented at this
forum mentioned in their submission to this inquiry that they would be
interested to know what provisions were being put in place to ensure that
the private sector organisations do not act in a discriminatory manner.
[6] Opposition senators urge the Government to give
the forum a continuing role in the implementation of the new arrangements
for both domestic and migration assessments.
1.13 A number of other issues arose during the course of the inquiry
concerning the inadequacy of the Government's response to the recommendations
of the Legislation Review Committee. The issues that were raised with
the Committee as requiring further attention include:
- the adequacy of paper-based assessments and transferability of qualifications;
- the integrity of the assessments done by RTOs;
- the adequacy of the audit procedures for RTOs; and
- the quality and numbers of RTOs.
Practical implication of the new arrangements
1.14 Opposition senators believe that there are a number of practical
implications associated with the Government's proposal which have not
been adequately addressed. A key concern of Labor senators and many witnesses
who appeared before the committee was the adequacy of an assessment technique
based primarily on documentation. The Committee was told that the majority
of assessments done under the current system are already performed in
this way, however, a question arises as to whether this approach is appropriate
for the assessment of competencies compared to the current arrangement
of making assessments against formal training criteria or the 6/7 year
rules.
1.15 The move from a traditional time-based training framework to one
based on the acquisition of a certain number of competency standards,
regardless of when or how the skills were attained, makes a paper-based
assessment much more problematic. The Committee received evidence that
not only would the quantity and detail of the documentation required increase
significantly, potentially imposing more costs on the applicant, but also
that in many cases applicants simply would not be able to obtain the types
of documents that would be necessary. [7] Representatives
from the Australian Manufacturing Workers Union, and the Communications,
Plumbing and Electrical Union told the committee that assessments of these
sorts for the metals and electrical trades would require 140 or more documents.
[8]
1.16 This would clearly be a barrier to the most disadvantaged in the
community such as the unemployed and refugees. These sentiments were echoed
by a member of Adult Multicultural Education Services who informed the
Committee that, for migrants already in Australia, getting this documentation
from their country of origin had proven extremely difficult in the past.
[9] There may also be cost increases arising
from the need to obtain such documents, again impacting on those who can
least afford it. It was bought to the Committee's attention that the cost
of the assessment and recognition process can sometimes be an insurmountable
barrier for some migrant groups, particularly humanitarian and refugee
entrants. This can often result in these people becoming long-term unemployed
or becoming trapped in menial jobs which they initially take on simply
to survive only to find that their trade skills have become out-dated.
1.17 It was suggested that financial assistance should be available to
help vulnerable groups gain recognition for their skills such as is currently
offered for selected occupations under programs administered by NOOSR.
Two schemes were mentioned: one provides assistance to undertake preparatory
courses for assessment; the other offers a subsidy toward the actual assessment
costs. [10] In additional information provided to the Committee
by Australian Labor Market Services it was stated that:
There is a strong case for addressing the needs of disadvantaged client
groups such as refugees and the unemployed, and improving their access
to domestic skills recognition services. [11]
1.18 The Committee was also made aware of potential difficulties that
might arise in the mutual recognition of qualification issues under the
ARF. This is because of differing registration and monitoring procedures
put in place by the various state and territory training authorities.
This issue was also identified in the Review of the Legislation released
in November 1998. [12] Further to this the
Committee was informed at the public hearing that concerns over quality
controls in the assessment and recognition process by RTOs has resulted
in one electrical licensing board in Queensland proposing to retest all
people who come through the new system. [13] This is a clear indication that the Government
has not achieved the full support of industry on this matter.
Integrity issues
1.19 Labor Senators express deep concern about integrity issues associated
with this proposed legislative policy change. While Labor senators applaud
Australian Labor Market Services for declaring to the Committee a personal
vested interest in making a submission to this inquiry, it is considered
to be inappropriate that key individuals involved in this public policy
formation leave the public service on 1 April 1999, establish their own
company, Australian Labor Market Services on 8 April and appear to be
the lead tenderer for privatised trades skills assessments all before
the legislation has proceeded through Parliament.
1.20 A number of unresolved issues and risks remain in terms of the impact
that contracting out of assessment services may have on the integrity
of the process. The Opposition considers it unwise to put out to private
tender the delivery of such an important service when it is clear from
the evidence presented to this Committee that there are considerable concerns
about such contracting. For instance, under a private fee-for-service
arrangement, there are some obvious conflicts of interest that arise.
The first concerns the fact that RTOs will now have a dual role, offering
training as well as skill assessment services. Under this arrangement
there is a clear financial incentive for these firms to assess an applicant
as not meeting all the necessary competencies to gain a full qualification
and to then offer them training, at a cost, to overcome the skill gap.
1.21 There is also an apparent conflict of interest in terms of the role
that Industry Training Advisory Boards (ITABS) will play under the new
system. These bodies have a regulatory role under the system in that they
have input into the content and structure of the training packages and
provide advice to the state and territory training authorities on their
operation and effectiveness. However, some ITABs are also registered as
RTOs, so we are faced with a situation where the body responsible for
overseeing the development of training packages also has a financial interest
in delivering those packages.
1.22 In the various roles that RTOs will now play they will also be faced
with a number of different clients; individuals seeking trade assessments,
companies seeking skilled workers and Australian industry as a whole.
RTOs therefore face a conflict between the public interest associated
with ensuring that people applying for trade assessments are suitably
qualified, and the contractual obligations they have with the individual
seeking an assessment or the company seeking skilled workers. How RTOs
will resolve where their loyalties lie in this relationship is not clear
and has the potential to result in assessment outcomes which are detrimental
to the public interest. It is the view of Opposition senators that these
issues should be resolved before opening the system up further.
1.23 A witness from Australian Labor Market Services told the Committee
that the registration requirements and audit procedures would be sufficient
to deter unscrupulous operators from engaging in unethical or substandard
assessments. [14] It was also put to the Committee,
however, that industry bodies are not satisfied that the auditing procedures
are sufficiently well developed and tested in practice to ensure adequate
assessment outcomes. The position of the Australian Manufacturing Workers
Union (AMWU) was that:
…because the system is so new, there has not been a great deal
of activity in terms of auditing of registered training organisations.
When we have inquired of the various states as to what processes and
procedures they will be using to ensure that registered training organisations
actually meet the criteria, the answers to this stage have been fairly
inconsistent. [15]
1.24 It is the AMWU's contention that more time is required to address
these inconsistencies, with the involvement of the relevant industry bodies,
before the current system of assessments is replaced. In the monitoring
of RTOs, attention needs to be given to the outcomes achieved rather than
simply looking at the processes RTOs are using to do skill assessments.
Opposition members of the Committee agree with these contentions and believe
that the Commonwealth should maintain a role in the regulation of domestic
trade skills assessments as well as in the migration context. This position
was supported in the submission from members of the Northern Metropolitan
Migrant Resource Centre and Adult Multicultural Education Services. [16]
The quality of RTOs
1.25 When the ARF commenced in January 1998, many of the existing training
organisations were given automatic registration as RTOs. That is, they
did not have to meet the current registration criteria for new organisations
wanting to establish themselves as RTOs. As was noted earlier, there have
been few audits of the performance of RTOs since the new training framework
commenced. There is a concern that these organisations have limited experience
in delivering and assessing the acquisition as well as the application
of knowledge as required under the National Training Framework. [17]
1.26 The Committee was also informed that out of around 4,000 RTOs currently
operating, only nine were assessment-only RTOs, none of which had been
operating for more than twelve months. [18]
A representative from the Australian Manufacturing Workers Union told
the Committee that an expansion in the number of RTOs offering a cheap
assessment only path to skill recognition in the long term was desirable.
It was also noted, however, that there were relatively low-entry barriers
to an organisation establishing itself as an assessment-only RTO and that
at this stage the quality assurance mechanisms are not adequate to ensure
that such organisations could offer quality assessment services. [19]
1.27 Labor senators note that issues related to unsatisfactory quality
of provision under the new training arrangements have already resulted
in independent state government inquiries in Queensland and Tasmania.
Further evidence provided to the 1999 Budget Estimates detail that a recent
audit in South Australia showed that 90 per cent of RTOs audited did not
meet the requirements of the National Training Framework.
Offshore and Migrant Issues
1.28 Labor Senators believe that there are a number of serious issues,
over and above those already outlined in this report, associated with
the government's proposal to contract out migration assessments to RTOs.
While it is understood that skill assessments for migration purposes is
not technically associated with the TRR Act, at a practical level they
are closely linked. The two processes are there to ensure that people
wanting to work in various trades in Australia have the necessary skill
requirements. The issues of concern raised in the context of the domestic
recognition process were more strongly expressed with regard to the assessment
of prospective migrants.
1.29 During the Committee's investigation into the issues surrounding
this bill, it became apparent that the Department of Education, Training
and Youth Affairs had already called for tenders from RTOs to replace
TRA in the role of conducting skills assessments for migration purposes.
While the evaluation of the tender has been suspended pending the outcome
of this inquiry, Opposition senators express serious concern over the
decision to implement public policy by tender. Rather than involve all
relevant players in a public consultation on the most effective means
of progressing to competency-based skills assessments, the Government
has instead decided to ask tenderers to outline processes to overcome
issues such as conflict of interest and fraud. While industry representatives
may be given an advisory role in the tender evaluation, the ultimate decision
will be up to a group of Canberra based bureaucrats. One need only look
at the initial tender for the Job Network to see the potential problems
associated with an ill-considered tender process.
1.30 The proposal to undertake primarily paper-based assessments for
migration purposes is of significant concern to Opposition senators in
terms of the impact on the assessment outcomes and on the costs to applicants.
By limiting the assessment options of RTOs in migration assessments, they
will be forced to make a decision based on the material they are presented
with. There is a real risk that this could lead in some instance to applicants
being assessed as not fully competent when another assessment techniques
may have provided sufficient additional information to verify that those
applicants were in fact suitably qualified. On the other hand, assessments
may become easier to pass, allowing some people to migrate on the pretence
that they are qualified to Australian standards. However, on arrival,
additional testing may reveal that they do not in fact match the relevant
Australian standard. There are clearly equity and safety concerns associated
with these occurrences. The large level of documentation required for
paper-based assessment may also impose a substantial cost on the applicant
and potentially lead to an increase in the use of fraudulent documents.
1.31 According to one witness who had worked in the area of skills assessment,
observing someone performing a set of tasks was the best method of assessment
and that a technical interview would be the minimum level of rigour required.
[20] A submission from another person employed as
a skills assessor mentioned that when full cost recovery was introduced
for TRA assessments and an emphasis was placed on paper-based evidence,
there was a marked increase in the refusal rate of migrant assessments.
[21]
1.32 In a supplementary submission to the Committee from DETYA and DEWRSB,
it is noted that additional assessment techniques to supplement the paper-based
assessment may be used for migration assessments where necessary. [22] Opposition senators believe that, under competency-based
assessment, many potential migrants will not be able to prove their competency
by documents alone. The new administrative arrangements should consequently
place a high priority on selecting a RTO which has the capacity and preparedness
to undertake any additional measures that are required and ensure that
procedures to deliver the equivalent outcome to the Australian Qualifications
Framework can be guaranteed.
1.33 In relation to the delivery of assessments for migration assessments,
Opposition senators note the evidence of DETYA and DEWRSB concerning the
detailed requirements that are being sought to ensure the integrity and
capability of the successful RTO. One requirement is that they are able
to service a wide range of occupations. This may be difficult for one
organisation to achieve given the requirement under the ARF to have assessors
who are qualified in the trade they are assessing. Therefore it is likely
that the lead RTO selected through the tender process will have to subcontract
some assessment services out to other RTOs. Opposition senators are concerned
that this process is being left entirely up to the organisations involved
with no scrutiny of the subcontracted providers maintained by the Government
managing agent.
1.34 Fraud prevention is another area which is vital to maintaining the
integrity of the system, particularly for migration assessments. The Committee
was assured in various submissions and oral evidence presented to it that
fraud prevention measures were being put into place. In particular, the
request for tender to undertake migration skill assessments required tenderers
to outline the measures they would establish for controlling fraud. The
point was made by one witness that there was no problem with this provided
that the fraud prevention measures had been tested and proven to be satisfactory
during the transitional process. [23] It is not clear to the Committee that this `proof'
has been established. The importance of this was highlighted in correspondence
presented to the Committee which was of a confidential nature. The Committee
was informed, with a supporting example, that in some countries there
is a very high incidence of forged and fraudulent documentation presented
as evidence for paper-based trade assessments. Extra investigations to
determine whether the evidence provided by an applicant is bone fide will
obviously be a cost that will need to be borne by the assessing body.
It is conceivable that in a deregulated system RTOs will not be as vigilant
as a public sector organisation in establishing the authenticity of an
applicant's credentials.
1.35 In a deregulated environment there is also a risk that migration
agents will seek to take advantage of the profit-driven arrangements to
obtain favourable outcomes for their clients. There is already some evidence
to suggest that the effect of the introduction of user choice in the Queensland
training market has resulted in a drop in the quality of service being
provided. [24] These outcomes again raise the
issues of who are the clients of RTOs and highlight the pressure on RTOs
to turn a profit in order to survive.
1.36 Opposition senators also believe that information on the performance,
progress and changes within the new system needs to be maintained. The
Committee did not receive any evidence to suggest that there would be
an on-going process for collecting and disseminating this information
to the relevant interested parties. This will become a greater issue if
the National Office of Overseas Skills Recognition (NOOSR) ceases to be
the government managing agent for migration assessments after the system
is reviewed twelve months after its implementation.
Recommendation
1.37 Opposition senators believe that this is far from a simple piece
of machinery legislation. There are still many outstanding issues and
questions to be resolved concerning skills accreditation and regulation
under the proposed new arrangements. Until these issues have been satisfactorily
resolved, Opposition senators recommend that the bill not proceed.
Senator Jacinta Collins
Senator Kim Carr
Deputy Chair
Footnotes
[1] The Hon. Peter Reith MP, House of Representatives,
Proof Committee Hansard, 12 May 1999, p. 5298
[2] Mr Peter Tighe, Proof Committee Hansard,
20 July 1999, p. 24
[3] Mr Giancarlo Savaris, Proof Committee
Hansard, 20 July 1999, p. 30
[4] Mr Giancarlo Savaris, Proof Committee
Hansard, 20 July 1999, p. 35
[5] Submission No. 12, Department of Education,
Training and Youth Affairs/Department of Employment, Workplace Relations
and Small Business, vol .1, p. 141
[6] Submission No. 8, Federation of Ethnic Communities'
Councils of Australia vol. 1, p. 73
[7] Submission No. 6, Communications, Electrical
and Plumbing Union / National Electrical Plumbing Association, vol. 1,
p. 43-4
[8] Mr Julius Roe, Mr Peter Tighe, Proof
Committee Hansard, 20 July 1999, p. 20-21
[9] Mrs Heather Weaver, Proof Committee Hansard,
July 20 1999, p. 6
[10] Ms Ainslie Hanan and Mrs Heather Weaver,
Proof Committee Hansard, 20 July 1999, pp. 4-7
[11] Australian Labor Market Services, additional
information, p. 3
[12] Report of the Legislation Review of the
Tradesmen's Rights Regulation Act 1946, November 1998, p. x
[13] Mr Peter Tighe, Proof Committee Hansard,
20 July 1999, p. 24
[14] Mr Glenn Newton, Proof Committee Hansard,
20 July 1999, p. 14
[15] Mr Julius Roe, Proof Committee Hansard,
20 July 1999, p. 19
[16] Submission No. 4, Northern Metropolitan
Migrant Resource Centre/Adult Multicultural Education Services vol. 1,
p. 23
[17] Mr Julius Roe, Proof Committee Hansard,
20 July 1999, p. 20
[18] Mr Glenn Newton, Proof Committee Hansard,
20 July 1999, p. 12
[19] Mr Julius Roe, Proof Committee Hansard,
20 July 1999, p. 23
[20] Mr Geoff Wallace, Proof Committee Hansard,
20 July 1999, p.25
[21] Submission No. 2, Mr Roger Laws, vol.
1, p. 8
[22] Submission No. 12, Department of Education,
Training and Youth Affairs/Department of Employment, Workplace Relations
and Small Business, vol. 1, p. 148
[23] Mr Geoff Wallace, Proof Committee Hansard,
20 July 1999, p.28
[24] Dr Larry R Smith, Impact on user Choice
on the Queensland Training Market: A Progress Evaluation, Department
of Employment, Training and Industrial Relations, March 1999