Chapter 2 - General issues
2.1
Australia will benefit from a single national approach to vocational
education and training. This message was clearly sent by major stakeholders in
the field. The committee is aware that some governments – Victoria and Western
Australia – have reservations about the implementation of an intergovernmental
agreement and national laws, but no-one disputes the benefit of a national
approach for reducing complexity for businesses, and acting as a key quality
assurance mechanism, thus improving confidence in Australia's VET system.
2.2
The New South Wales government, which has passed legislation to allow
the referral of powers to the Commonwealth, said that it 'strongly supports a
single, national VET regulatory system'.[1]
The Minerals Council of Australia considered that:
The National VET Regulator Bills provide a single, standard
national regulatory framework for the VET sector, which is essential to promote
consistency and remove barriers and confusion for individuals and enterprises
who are or who wish to work across more than one jurisdiction.[2]
2.3
The Australian Council of Trade Unions (ACTU) indicated it supported the
change, saying it was something that has been needed for some time:
[O]ur main interest or focus has been to reaffirm our broad
support for the establishment of the National VET Regulator. It is something
the ACTU and others have called for for some time and we are glad to see now
that we are almost there. It is a significant reform and we commend the
government for taking it on. In terms of the bills themselves, we are pleased
to see the broad powers enabling the National VET Regulator to monitor and
enforce compliance with quality standards and also take appropriate action
against those providers who do not meet those standards.[3]
2.4
The Australian Council for Private Education and Training (ACPET) was
particularly strong in its support for the reforms. It expressed its concern:
That this critical initiative not be further delayed as a
result of this inquiry... ACPET has been consulted on both the draft legislation
and periodically on progress towards the establishment of the new
regulator...ACPET considers that the proposed legislation significantly
strengthens the ability of the regulator to take action against seriously
non-compliant providers. The legislation will therefore serve to improve the
quality of vocational education and training being delivered in Australia...[4]
2.5
The Minerals Council of Australia welcomed the 'reduction in the
complexity of the regulatory framework'.[5]
Submitters were supportive of removing inconsistencies in areas such as
training and assessment between jurisdictions.[6]
2.6
It is important to ensure high standards of training delivery across the
VET sector, and the bills are an important measure in achieving this objective.[7]
The Master Builders Association supported a national regulator, arguing it
would deliver 'consistent robust national regulation of training providers and
courses'.[8]
The Australian Chamber of Commerce and Industry (ACCI) explained the need for a
new regulatory approach in terms of dealing with low quality training:
The Bills have been designed to overcome some of the specific
problems experienced as a result of the activities of some poorer quality
providers who used elements of the AQTF designed for continuous improvement under
existing State and Territory legislation to defend their lack of compliance
with critical quality requirements. It created problems and generated an
unjustified but poor broader image for the whole VET sector and resulted in
undesirable outcomes and publicity around international students. The
establishment of the NVR will help to rectify these problems through enabling a
stronger regulatory response to non-compliant RTOS.[9]
2.7
Within the framework of strong support for the bills, a range of issues
were identified by stakeholders.
Consultation processes
2.8
As noted above, ACPET was satisfied with the consultation process. This
did not however seem to be a view that was necessarily widely shared. The ACTU,
on behalf of itself and other relevant players, observed:
we are concerned with the lack of meaningful consultation
around the details of these major reforms. The ACTU and other industry
stakeholders were part of a ‘limited consultation’ process in late 2010 which
provided the opportunity to view a draft Bill for a half day. Given the
significance of this legislation, this did not prove sufficient time for proper
consideration before the Bill was introduced.[10]
2.9
This theme – of broad support but limited input on the legislation – was
a recurring one:
DEEWR, right from the outset of establishing the NVR, has
involved industry stakeholders, first of all, in briefings and, secondly, in
the consultation process at the end of last year. However, that consultation
process, while appreciated, really did not provide us with a lot of scope for
providing feedback. Certainly the government’s approach has been to be very
consultative in a lot of other forums, and probably there has not been as
extensive consultation on this particular piece of legislation as occurs in
other arenas. Also, even though we were consulted, basically nothing happened
with the feedback that we provided. We are just one of a range of stakeholders;
we understand that, but I think there has been some frustration about
consultation on this particular bill.[11]
2.10
The committee discussed the negotiations between jurisdictions with
representatives of the Western Australian government. They implied Western
Australia was not part of continuing discussions:
CHAIR—Are there still some discussions going on? On one reading
of what you have said there is not that much between the parties even though it
is obviously a threshold issue. Are there still attempts to resolve the issue
or, from your point of view, is the ball now in the Commonwealth’s court, so to
speak?
Mr Brown—As we understand it, the legislation and the
intergovernmental agreement are the Commonwealth’s final position and we have
not had any further consultation on that matter. When we inquired whether there
would be, we were basically given the sense that that was it, that was the
position that was going to be presented.[12]
2.11
The Australian Education Union (AEU) and the TAFE Directors Association
wanted more time spent on the legislation:
The organisations wish it further noted that they view the 11
day time period allowed for the Committee to undertake and complete its inquiry
as wholly inadequate for the purpose of ensuring appropriate consultation on
what is after all such a significant change in the VET sector regulatory
environment. The Committee is urged to consider recommending further delay in
passage of the Bills to enable full consultation to occur, including
consideration of legislative amendment, to take account of stakeholder
concerns.[13]
2.12
These organisations reiterated similar concerns at the hearing:
Compared with TEQSA, consultation on the National VET
Regulator has been limited and there is no forum in which to have a holistic
dialogue or single line of communication about the parallel and critical set of
changes between the two bodies.[14]
However, in terms of any processes of consultation around the
legislation—which is so critical as an underpinning for the national VET
regulator—there have been no consultations with the union at all. As far as I
am aware, I believe there was a restricted forum organised in late October where
an invitation was extended to the ACTU to attend a closed session where
participants would have access to a draft of the legislation for a limited
period of time. During that session they would be able to provide feedback,
then the draft legislation was to be left there. Unfortunately, because the
notice for that session was so short the AEU was unable to attend that limited
briefing and, as far as I am aware, that was the only point at which there was
any consultation—certainly potentially with the AEU.[15]
2.13
The Department of Education, Employment and Workplace Relations (DEEWR)
advised the committee of its schedule of stakeholder consultations. Excluding
the meetings of the State and Territory Working Group, the Ministerial Committee
and bilateral meetings with jurisdiction governments, the consultations
included 16 meetings and open sessions, with at least one occurring in every
jurisdiction, between 10 March and 5 May 2010.[16]
However, the committee understands that stakeholder consultation on the
exposure draft of the bills was confined to a single session on 29 October
2010.[17]
A representative of the AEU said that 'the draft legislation was to be left
there', suggesting it remained in confidence,[18]
however the department indicated that stakeholders were provided with a copy of
the legislation,[19]
implying it was then public. The committee did not resolve the detail of
whether the exposure draft was effectively public from 29 October 2010.
2.14
DEEWR advised the committee that the draft went through 18 draft
iterations after the stakeholder consultation on 29 October, and gave examples
of some of the changes that were included.[20]
Committee view
2.15
As the committee notes elsewhere in this report, it also has concerns
about a process where there is limited capacity to consider and comment on
proposed legislation, particularly when it is establishing a regulator, which
involves creating and defining regulatory conditions, including offences. The
committee believes the draft bills required more careful consideration at an
early stage.
Lack of objects
2.16
Several major players in the sector noted the lack of an objects clause
in the bill.[21]
This was one of the main points raised by the AEU and TAFE Directors Australia.
It was also noted by the ACTU, which pointed out that similar clauses are in
place in other legislation, such as the Fair Work Act 2009.[22]
The exposure draft of similar legislation, the Exposure Draft of the Tertiary
Education Quality and Standards Agency Bill 2010 contains an objects clause:
The objects in that exposure draft bill are:
(a) to provide for national consistency in the regulation of
higher education; and
(b) to regulate higher education using:
(i) a standards-based quality
framework; and
(ii) principles relating to
regulatory necessity, risk and proportionality; and
(c) to protect and enhance:
(i) Australia’s reputation for
quality higher education and training services; and
(ii) Australia’s international
competitiveness in the higher education sector; and
(iii) excellence, diversity and
innovation in higher education in Australia; and
(d) to encourage and promote a higher education system that
is appropriate to meet Australia’s social and economic needs for a highly
educated and skilled population; and
(e) to protect students undertaking, or proposing to
undertake, higher education in Australia by requiring the provision of quality
higher education; and
(f) to ensure students undertaking, or proposing to
undertake, higher education, have access to information relating to higher
education in Australia.[23]
2.17
The AEU and TAFE Directors suggested that:
Objects provide a clear expression of legislative intention
and provide authoritative guidance to the administrators and users of the
statute. Without Objects, it is therefore unclear what the Bill is attempting
to achieve.[24]
2.18
They considered that objects modelled on those contained in the TEQSA
bill exposure draft could be appropriate.
2.19
The Department responded saying that there were differences between the
processes leading to the establishment of TEQSA and the National VET Regulator,
in particular that the latter is relying on a referral of state powers and
therefore is negotiated with the states:
As a result there is an intergovernmental agreement with the
states and territories, and in that intergovernmental agreement a set of
objectives is set out... In the case of this piece of legislation, it was thought
unnecessary to do that when the objects would be set out in the
intergovernmental agreement.[25]
Committee view
2.20
As noted elsewhere in this report, however, the intergovernmental
agreement is neither public, nor even signed as of the Senate considering the
bill. The committee accepts that legislation may be prepared in different ways,
and that an objects clause is not always necessary. However the lack of such
objects being in the public domain, through either the bill or the
intergovernmental agreement, seems unfortunate.
The development of national standards
2.21
National standards are critical to underpinning the national framework
for vocational education and training. The Minister, in the second reading
speech, stated
A key mechanism for regulation in VET is the national
standards against which RTOs are regulated, currently called the Australian
Quality Training Framework. The content of the standards will not be
significantly changed, but this Bill strengthens their legal status by making
them a legislative instrument.
The standards will continue to be endorsed by the Ministerial
Council and will be developed in the future by the new Standards Council which
will be established in 2011.[26]
2.22
The Minerals Council of Australia indicated that industry participation
in the development of standards was critical, and that current AQTF standards
should not be directly adopted in their current form.[27]
ACCI also expressed concern about the use (or abuse) of elements of the
existing AQTF.[28]
2.23
The Australian Manufacturing Workers' Union (AMWU) also expressed
concern about how standards would be developed and adopted, but did not appear
to share doubts about the adequacy of the existing AQTF:
There appears to be no mention in the Main Bill of
the Australian Quality Training Framework (AQTF) which provides the current
regulatory framework for Registered Training Organisations. Whilst this might
be because the AQTF will be incorporated into the Standards for NVR registered
training organisations, the AMWU submits that the relationship between the
existing and new regulatory VET framework should be made explicit and that the
legislation should expressly provide for a strong role for industry in
decisions relating to the Standards underpinning the quality of the system.[29]
2.24
A similar view was expressed by the ACTU, Manufacturing Skills Australia
and EE-Oz Training Standards.[30]
2.25
The Victorian government doubted that the AQTF was suitable to become a
statutory framework for standards in the sector:
In essence, the national standards set out in the Australian
Quality Training Framework (AQTF) are a set of policy statements and
objectives. Whilst adequate as statements of policy, they are not crafted to
serve as the basis for a robust regulatory system in the modern administrative
law context.
It is understood that the Commonwealth proposes to resolve
this problem by giving the AQTF the status of a legislative instrument. In Victoria's
view, this does not solve the fundamental problem. Making a vaguely expressed
document into a legislative instrument will not make it any easier to
administer. For this reason, Victoria's approach has been to develop Acts and
regulations that give effect to the policies set down in the AQTF in
enforceable statutory form.
More work needs to be done to articulate the standards with
greater clarity and precision to give providers and regulators better guidance
on what they require.[31]
2.26
DEEWR indicated that there is the capacity to address these debates
independently of the bill's provisions. DEEWR representatives noted that '[t]he
standards that will be applied by the regulator are not set out in the
legislation but are put in legislative instruments that are referred to in the
legislation'.[32]
There is a deliberate separation of the standards themselves and the
regulator's work in applying them:
[T]he introduction of a National VET Regulator is not
intended to significantly alter the national standards as recently
strengthened. The intention is to improve consistency and enforceability of the
standards by having them regulated by a single body with robust powers.
There will be further opportunities in the future for
stakeholders to contribute to the ongoing development and refinement of the
standards. In addition to the establishment of a National VET Regulator, the
Australian Government is consulting extensively with state and territory
governments and other key stakeholders to form the National Standards Council.
The National Standards Council will continue to develop and
refine the national standards, and will be required to consult extensively on
these changes.[33]
2.27
They also pointed out that the AQTF had itself been recently
strengthened in a process separate to the current bills:
They were strengthened in a number of ways in a process in
2010 to include a requirement for fit and proper person standards to be met;
for financial viability standards to be met; and for continuous improvement not
to be seen as an alternative to meeting the standards but rather being in
addition to meeting the standards. There was a separation of the standards for
initial registration with the standards for continuing registration, as that
resulted in some uncertainty as to how the standards applied in relation to
initial registration, and there was a strengthening of the data requirements,
in that there is now a requirement that registered providers keep [Australian
Vocational Education and Training Management Information Statistical Standard]
compliant student records.[34]
2.28
It is important that the standards being enforced by the regulator are
strong: strengthened enforcement powers are of little use unless they are
supported by adequate laws. The committee was satisfied with DEEWR's observations
on this issue.
The place of Enterprise RTOs
2.29
Enterprise RTOs are Australian companies that become RTOs in order to
train their own employees, but their main business is not training. They
include some of Australia's largest employers, such as Woolworths, Westpac and
the Australian Taxation Office. There are currently around 250 enterprise RTOs,
issuing around 100 000 qualifications each year.[35]
2.30
The AEU and TAFE Directors suggested that the VET framework should
include a reference to the concept 'that VET providers have as a main or proper
or primary or significant purpose the provision of VET'.[36]
The AMWU supported the AEU and TAFE Directors, but expressed the proposal more
narrowly, suggesting that RTOs should have, 'as a primary or significant purpose,
the education and training of students'.[37]
2.31
In contrast, ACCI was critical of any suggestion that definitions be
inserted that could prevent Enterprise RTOs from remaining within the system:
It is highly desirable that businesses embrace the accredited
training system and integrate training into their business processes as is the
model in Enterprise RTOs... Inadvertent exclusion of this important sector would
be a significant blow to formal training and may encourage enterprises to turn
instead to non-formal and informal training to meet their skills needs. From a
business and industry perspective, this would be highly undesirable.[38]
Committee view
2.32
The committee understands the differing views of parties on this matter.
It notes, however, that the AEU / TAFE Directors submission does suggest that
VET providers may have as a 'proper...or significant purpose the provision of VET':
'proper' is significantly broader than 'main' or 'primary'. These words on
their face seem clearly to have the scope to include enterprise RTOs. The
committee is not sure there is a genuine conflict of views here. Nevertheless,
the issue is a substantive policy question that goes beyond the provisions of
the bill, and was not pursued further by the committee as part of this inquiry.
Conclusion
2.33
The committee wishes to reiterate that there is widespread support for a
national approach to the VET sector. This is reflected in steps that have been
taken in this direction over the last decade. The current reforms represent an
important milestone in protecting and enhancing Australia's vocational
education and training sector. The committee now turns to some specific issues
with aspects of the bills, particularly in relation to offences, civil
penalties and entry, search and seizure powers.
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