Christopher Back (WA, Liberal Party) Share this | Hansard source

I present the final report of the Education, Employment and Workplace Relations References Committee on industry skills councils, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

I seek leave to move a motion in relation to the report.

Leave granted.

I move:

That the Senate take note of the report.

The matter of industry skills councils was referred to the committee on 22 June 2010 and deferred due to the prorogation of the 42nd Parliament. An interim report was presented on 13 September 2010.

I thank the 119 people and organisations who made submissions to the committee. The committee was pleased to learn that most submitters were broadly satisfied with the contribution ISCs make to furthering the nation’s skills and training objectives. There were, of course, a number of submissions which raised significant points of concern and drew isolated difficulties within certain sectors to the committee’s attention. The committee considered these and is confident that they will be resolved by the parties concerned using existing channels of communication.

ISCs produce training packages which form the basis for industry endorsed national qualifications that reflect the needs of the labour market. These packages are developed through a consultative process which is designed to reflect workplace requirements. They undergo regular reviews to ensure their ongoing relevance and credibility.

Training packages produced by the ISCs need endorsement from the National Quality Council, soon to become the National Standards Council. This is a process which requires ISCs to show evidence of product quality and consultation with and support from industry. It is also a process which has attracted some criticism from submitters questioning the role of the NQC in product quality assurance. Some of these submitters felt that the NQC imposed excessive bureaucratic constraints on the ISCs which compromised the quality of their training packages. The committee appreciates the fine balance required between ensuring evidence based product quality and minimising delays caused by red tape.

The committee also heard that some stakeholders feel that ISCs may not possess sufficient industry-specific expertise to develop targeted training products. Problems were expressed by the automotive industry, who were of the view that the federal government’s decision to hand responsibility for that industry to a particular ISC was in fact not in the best interests of that industry. The committee is satisfied that Manufacturing Skills Australia is attempting to engage with the industry and is working hard to respond to stakeholders’ calls in this regard.

The committee considered the question of the production of training materials by ISCs, having heard that some ISCs may be exhibiting signs of anticompetitive behaviour, especially towards smaller, private sector training material developers. The existence of such views is cause for concern and led the committee to recommend that ISCs review their activities to ensure that their focus remains on training package oversight and not on development or production. The committee cannot stress enough how important it is that there is separation between the work of ISCs and registered training organisations in product development and training delivery.

The committee has recommended that the ISCs examine ways to develop a template for the environmental scans they conduct on behalf of government and industry on an annual basis, in order to minimise the burden on stakeholders in having to expend excessive time and energy scanning separate information from each of the 11 ISCs. There is a process through the ISC chairs and CEOs which the committee believes would be appropriate to undertake this development.

Other significant points that the committee assessed centred on issues of accountability in funding and corporate governance. As ISCs have contractual agreements with the Department of Education, Employment and Workplace Relations which underpin the allocation of funding, they are clearly accountable to government for money spent. The committee concluded its inquiry with a strong view that ISCs must use government funding to pursue core activities and that they must be transparent and accountable in discharging them.

It did become clear from the presentations by different ISCs and others that there have been differences between ISCs and from industry to industry. These became apparent in almost all aspects of the inquiry, and to a certain extent it is normal. We would expect that, with 11 separate agencies dealing with such diverse industries and equally diverse challenges, some will perform better than others. It is for this reason that the committee believes that the government would do well to develop standard contracts with clauses detailing accountability measures for all paid work undertaken for any government agencies—both DEEWR and any other agency of government. If these were incorporated into contracts between the department and each ISC the committee believes we would see fewer inconsistencies and causes for concern.

The committee would like to see an improvement in the ISCs’ relationships with state and territory advisory bodies in order to increase the uptake of ISC training packages. We do acknowledge that stakeholders are mindful of the deficiencies where they exist and are making efforts to address them. The committee’s ability, however, to assess the formal structures in place for these relationships was regrettably hampered because the department declined to make a submission to this inquiry, despite repeated calls from the committee through the secretariat. The committee believes this was an opportunity missed.

Nonetheless the committee has drawn several important recommendations to the department’s attention, aimed at supporting the objectives of the ISCs and ensuring that they are unfailingly accountable for public moneys. The committee believes it is of paramount importance that the federal government holds all ISCs up to standards and helps them remove inconsistencies in funding and corporate governance arrangements. We hope that the government and the department will work to finetune those arrangements currently in place.

Having said that, on behalf of the committee I reiterate that most submitters are broadly satisfied with the effectiveness of ISCs. We understand that both ISCs and the workforce development packages they produce are—relatively speaking—new and constantly evolving to meet current and future needs, which are forever changing. As stated in the report, this is not an exact science and is almost certain to generate dissatisfaction amongst some stakeholders some of the time. The committee, however, does not believe that the current industry configuration under each ISC should be set in stone. It is possible that some ISCs cover too large and diverse a set of industry sectors to give each one, particularly small businesses within them, adequate time and consultation. For this reason we strongly recommend that the department include in its next contracts with ISCs, which are to be written from June-July of this year, a clause which will provide for the renegotiation of industry coverage, and potentially the splitting of some ISCs if deemed necessary.

Two ISCs in particular cover such an extensive cross-section of industries that consideration could be given to splitting them to achieve more equitable outcomes for participants in their industries.

The importance of training and workforce development to this nation’s future productivity cannot be emphasised strongly enough, and that was a unanimous view supported by the committee. The committee welcomed the opportunity to be part of the effort to address concerns voiced by members of the wider community in the interests of improving outcomes for employers and employees across Australia.

I take the opportunity to thank the members of the committee and the secretariat for the excellent manner in which this was conducted and for the effort of the secretariat in assisting the committee in all phases of our investigation.

In conclusion, there are 10 recommendations that have been made as a result of this report, and I commend the report and its recommendations to the Senate.