Coalition Senators' Dissenting report
Position of Victoria and Western Australia
The Coalition is unable to support a recommendation that the NVR Bills proceed
in their current form given the status of Victoria and Western Australia as
As outlined at paragraphs 2.2 to 2.6 of the main report, the evidence
presented by RTOs and others strongly supports a national approach to
regulation and auditing, having regard to the number of organisations that
provide training across state and territory borders. Coalition senators are also
satisfied that every State and Territory sees the merit of nationally
consistent regulation and auditing of the VET sector.
However, the evidence presented to the committee is that the NVR Bills
have the potential to undermine national regulation. While Victoria and Western
Australia have indicated they are prepared to introduce mirror legislation in
their state parliaments to give effect to this aspiration,
Western Australia has advised that it is unable to do so on the basis the NVR
Bill as currently drafted:
Our position on this bill is that the December 2009 agreement
made by our Premier at COAG on the regulation of VET has as yet not been
sufficiently reflected in the bill as it currently stands. The Commonwealth
legislation being considered by this committee falls short of that agreement
and the state is, therefore, not able to keep its side of the agreement until
it is honoured in the legislation.
The committee was informed that Western Australia was given assurances
that the national system would not result in the transfer of regulatory
responsibility for state-owned RTOs:
The Commonwealth Bill does not reflect the assurances given
to our Premier from the then Prime Minister at the COAG meeting in December
2009 that these reforms would not result in the regulatory take-over of State
owned public providers, including Western Australian TAFE Colleges.
The committee was further advised that this assurance was central to
Western Australia's commitment to a system of national regulation:
...from the discussion that occurred at COAG, there was a
clear understanding from officials who were attending and the Premier that that
undertakings had been made: that the WA TAFE providers would not be party to
the national VET regulation arrangements. It was on this basis that the Premier
agreed to the recommendations made at the meeting.
Western Australia has recommend that the Commonwealth attempt to address
these concerns through amendments to the draft legislation to ensure the state
retains responsibility for state-owned RTOs:
Western Australia considers that the Commonwealth Bill must
be amended to expressly exclude its State owned public providers from the
Commonwealth legislation or provide that the regulation of these providers must
be delegated back to the Western Australian Regulator.
As outlined at paragraphs 4.1 to 4.17 of the main report, Victoria also
advised the committee of several concerns with the draft legislation. Among the
matters that Victoria raised is the concern that the NVR Bills will undermine
consumer protections for VET students in Victoria.
The state also advised that it is concerned that the Bills will create
uncertainty for the administration of TAFE Colleges in Victoria:
If Victorian TAFE Institutes have to become NVR registered
training organisations (which appears to be the effect of the NVR Bill), then
they may gain immunity, under clause 9(3)(a) of the NVR Bill, from the
Victorian laws governing administration of State TAFE institutes outlined
Such an outcome would be fundamentally inconsistent with the
status of TAFE Institutes as public authorities of the State. Whist this may
not be an outcome intended by the drafters of the NVR Bill, it is nonetheless a
fundamental flaw that must be corrected before the NVR Bill can become law.
Victoria also noted its concerns regarding potential implications for
the regulation of apprenticeships:
By exempting apprenticeship laws from override for some
States but not Victoria, the clear implication of the Bill is that Victorian
apprenticeship laws, at least to the extent that they may affect NVR registered
providers, are to be overridden. Again, no equivalent arrangements will be
established by the NVR Bill to replace the State laws it displaces. This
appears to create a substantial regulatory gap.
DEEWR argued that the bill would not interfere with the management of
TAFE providers and apprenticeships, however it seems that Victoria is not
satisfied on this point at present.
Victoria's submission to the committee echoes the view expressed by
Western Australia that the draft legislation does not reflect a best
practice approach to national regulation:
Victoria seeks to limit the scope of the NVR through the NVR
Bill to only those providers based in referring States. Non-referring States
should retain responsibility for the regulation of all VET providers based in
their jurisdiction, including providers that operate interstate and/or offer
services to international students. Victoria has consistently supported a
nationally consistent approach to the regulation of the VET sector. In place of
a practical approach to national regulation agreed by all 6 jurisdictions, the Commonwealth’s use of its
powers to override States’ constitutional responsibility for education, is
inappropriate and undermines the Federation.
Victoria has also recommended the Commonwealth seek to address the
concerns through amending the NVR Bill to clarify that the legislation does not
affect the authority of non-referring States to manage TAFE institutes and
regulate apprenticeships, and to allow non-referring state to exempt certain
laws from the operation of the NVR legislation.
Victoria also submitted the following alternative to amending the legislation:
if the Commonwealth is not prepared to confer such a power on
a non-referring state, the Bill could be amended to enable the Commonwealth
Minister to exempt specified state laws from the override.
Coalition senators feel strongly that more work needs to be done by DEEWR
to draft legislation which meets the requirements of the two non-referring
states so that a truly nationally consistent VET regulator process can be
presented to the Parliament. On the basis of the evidence heard, the Coalition
will not support a recommendation that the Bill be approved for passage in its
Coalition senators recommend the NVR Bill not be passed in its current
Coalition senators recommend that the NVR Bill be amended to address
concerns regarding the regulation of state-owned RTOs and RTOs based in
non-referring states, and concerns regarding consumer protection safeguards for
Coalition senators recommend that the Bill be amended to
state that the legislation will not interfere with the management in
non-referring states of TAFE providers and apprenticeships.
Intergovernmental agreements and parliamentary scrutiny
As outlined in paragraphs 1.9 to 1.12 of the committee's report, the
creation of a national approach to VET is underpinned by intergovernmental
negotiations and an agreement that there be a referral of powers to the
Commonwealth by states and territories. As already noted, this agreement is far
from unanimous: there appear to be significant sticking points with Victoria
and Western Australia about exactly how the new system should work.
However, Coalition Senators are also concerned about the way in which
the objective of national VET regulation is being pursued. The committee has
outlined, at paragraphs 1.24 to 1.31 of its report, the constitutional and
legal mechanism being used to create the National VET Regulator.
Coalition senators are concerned about three features of the process in
- The attempt to tie the hands of the parliament, preventing it
from improving legislation it has been asked to enact;
- The suggestion that legislation should be enacted on the basis of
an intergovernmental agreement, when the agreement has not been signed and is
not public; and
- A poor process for consulting on the exposure draft of
legislation, including failure to present it to parliamentary committees for
We note the advice given by the Minister to the Scrutiny of Bills
committee, and confirmed during this inquiry, that:
If there is amendment of the Commonwealth Bill, then the NSW
referral will not support the enactment of that amended Bill. This will be the
case even if only a small number of amendments are made. Any amendments to the
text of the main Bill, other than purely editorial changes, will therefore
delay or prevent the establishment of the [National VET Regulator].
The government is saying to parliament that, even though the views of
legislators were never sought, the bills cannot be revised without causing the
initial referral of powers by New South Wales to fail. However, parliamentary
consideration of legislation is a cornerstone of our democratic system.
The Scrutiny of Bills committee highlighted an unusually large number of
problems with this bill, in what was one of its longer reports on legislation
before the Senate. As of the time of this report, several of those concerns had
not allayed by the government.
While it is clear that there is widespread support for a national
approach to VET, documented in paragraphs 2.1 to 2.6 of the committee's report,
it was equally clear that there is a host of difficulties with the legislation.
The committee's report enumerates many of these, and we generally concur with
the identification of those issues.
However, the committee found itself being given the same message as was
given to Scrutiny of Bills committee:
A State text referral will not support a Commonwealth law
that departs in substance from the terms of the text referred. This means that
the Commonwealth and the State must agree on the terms of the text before it is
referred to the Commonwealth by the State.
Coalition Senators do not believe that this is an adequate argument to
pass legislation when so many technical and policy issues have been identified.
The committee was not presented with any reason why New South Wales in
particular needed to be the jurisdiction that made the initial referral. Since
any state can do this, there should be ample opportunities in the sittings of
the various state parliaments to give prompt effect to referral legislation
once the bills have been revised. Accordingly, we do not believe that revising
the current bills, even if such revision were to render the New South Wales
referral invalid, will cause undue delay in implementing a national approach to
An intergovernmental agreement?
As the committee's report notes, the creation of a National VET
Regulator under the current bills is the result of a COAG agreement reached in
December 2009. However, the situation at present is far from clear. There is
now only 'in principle' support for an IGA on the National VET Regulator, and
that agreement does not include two jurisdictions. The draft agreement is not
public; the committee sought a copy, but it was not provided.
The problem was highlighted by the debate over the lack of an objects
clause in the main bill. As the committee notes in its report at 2.16 to 2.20,
a number of stakeholders thought the bill should have an objects clause, and
contrasted it with the Exposure Draft of the Tertiary Education Quality and
Standards Agency Bill, which has such a clause. Here is what the committee's
report goes on to document about the government's response on this:
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.
But there is no agreed intergovernmental agreement. The Department's
response is effectively referring to a confidential, draft document: a document
the committee could not scrutinise. Likewise, the stakeholders concerned about
the lack of an objects clause can also not see this draft agreement. Even if
the draft was public, neither they, nor this committee, nor the Parliament
itself can be sure that it won't change after the bill has been passed.
In our view, this puts Parliament in a ridiculous situation. It is told
that it cannot revise the bills in any way without invalidating the New South
Wales referral of powers. Yet it is being asked to support the scheme in the
absence of a signed agreement between jurisdictions, and indeed in the absence
of even a public draft of that agreement. It is being asked to endorse
the creation of what appears to be a house of cards that could collapse at any
point, leaving the Commonwealth supporting a National VET Regulator that only
has full jurisdiction in one state.
A poor consultation process
Far from acting as an argument to pass the bill unaltered, the situation
that has arisen with the New South Wales referral of powers highlights the need
for reform of parliamentary consideration of legislation in the context of
We believe the process needs to be changed to give Commonwealth
Parliamentary committees the opportunity to consider the exposure drafts of the
bills prior to their passage through a state parliament, not afterwards. This
could have been achieved in late 2010 by giving Scrutiny of Bills and the
Senate Education, Employment and Workplace Relations Legislation committees an
opportunity to consider the bills at the same time they were being provided to
Furthermore, the government should have known that there would be
problems, because of the significant number of points at which the bills and
Explanatory Memorandum are not consistent with the Guide to framing
Commonwealth offences, civil penalties and enforcement powers.
Coalition Senators take up this point further below.
We also note that the process for stakeholder consideration of the
exposure draft appeared to be very brief. It did not appear to involve
stakeholders with a broader view of legal issues, but only those directly
involved in the VET sector. Given the scope of the legislation and the unusual
assemblage of powers it contains, consultation with a broader range of
interests would have been desirable.
Coalition Senators' view
Coalition Senators agree with the committee's Recommendation 2, that exposure
drafts of legislation be made available for examination by parliamentary
committees prior to their adoption as text-based referrals of power by state
legislatures. However the problems that have emerged with the National VET
Regulator legislation mean that we do not think the current bills should be
exempted from such scrutiny. Accordingly, we cannot agree with the committee's
Recommendation 1, which recommends that the bills be passed in their current
form. The parliament currently has the opportunity to get the bills right. If
that means the referral of powers needs to be re-done by a state jurisdiction,
then a short delay is preferable to second-rate legislation.
Coalition senators recommend that intergovernmental schemes of referred
powers be created after the signing of an intergovernmental agreement, not
before, and that the agreement-making process be appropriately transparent.
Coalition Senators recommend that the bill be amended to address the
concerns identified by both this committee, and by the Scrutiny of Bills
committee, and that if necessary, this be followed be a new referral of powers
by a state.
Entry, search and seizure powers
As outlined at paragraph 3.45 of the main report, the NVR Bill would
equip the National VET Regulator with significant investigatory powers,
including the powers to enter and search premises under warrant, question
persons on the premises and to seize documents. The Senate Standing Committee
for the Scrutiny of Bills has sought justification from the Minister for
aspects of these powers, concerned that clauses 62, 70, 71 and 85 may trespass
on personal rights and liberties.
It is of significant concern that following the Minster's advice the
Scrutiny Committee remains of the view that the provisions do not contain
sufficient safeguards or accountability measures.
As outlined at paragraphs 3.45 to 3.54 of the committee's report, similar
concerns are shared by several stakeholders in the VET sector.
The Scrutiny Committee has provided a number of options to bring the
enforcement powers in line with best practice while still ensuring a robust
regulatory response to RTO non-compliance with the regulatory framework. The
- Amending clause 62 to limit the power to request documents to certain
kind of documents or to list factors to be taken into account when considering
the exercise of the power; and
- Amending clause 70 to include additional accountability measures
for the use of force, such as a requirement that any use of force be recorded
by video or that the provision does not authorise damage to any property,
except in limited circumstances.
Additionally, stakeholders have also proposed measures to ensure the
enforcement powers are appropriately exercised. For example, the ACCI
recommended the powers be revised to reflect the powers in the Fair Work Act
Coalition Senators' view
It is accepted that the National VET Regulator requires investigatory
powers to respond to concerns that an RTO is operating outside the regulatory
framework. However, as the Scrutiny Committee and stakeholders have pointed
out, such powers must be exercised within appropriate boundaries and with due
regard for personal rights and liberties.
Coalition senators believe that the entry, search and seizure powers in
Part 5 of the NVR Bill should be moderated to ensure they operate
appropriately. The powers should be revised to respond to the concerns
identified by the Scrutiny Committee. The Fair Work Act should be investigated
further as a possible model for appropriate safeguards.
Coalition Senators recommend that the bill be amended to ensure that the
National VET Regulator's powers are exercised appropriately and with due regard
for personal rights and liberties, and that the Fair Work Act be investigated
as a possible model for exercise of entry, search and seizure powers.
In its report at paragraph 2.32, the committee notes how 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"'.
The committee also notes that the ACCI was critical of any proposal that might
undermine the role of Enterprise RTOs.
As the committee notes in paragraph 2.29, Enterprise RTOs include some
of Australia's largest and leading employers in both the public and private
sector, including the Commonwealth's own leading agency on public sector
training and development, the Australian Public Service Commission.
Enterprise RTOs not only provide valuable access to training for large
numbers of Australian employees, but also act as models for all Australian
employers, demonstrating the need to take training seriously and to commit to
ensuring it is provided to high standards. Coalition Senators emphatically
reject any proposals that would risk undermining the efforts of Enterprise RTOs
to ensure high quality training for their own employees.
Senator Chris Back Senator
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