Monday, 19 June 2017
National Vocational Education and Training Regulator Amendment (Annual Registration Charge) Bill 2017, National Vocational Education and Training Regulator (Charges) Amendment (Annual Registration Charge) Bill 2017; Second Reading
I am very pleased to be able to talk on these bills, the National Vocational and Education Training Regular Amendment (Annual Registration Charge) Bill 2017 and the National Vocational Education and Training Regulator (Charges) Amendment (Annual Registration Charge) Bill 2017, today. I propose to explain why it is that vocational education is important and I will go into the reason that this legislation is necessary to address a constitutional issue. I also want to deal with the history of technical and further education in Australia. I believe it is important that we understand the context of why technical and further education, particularly the public TAFE system, is so much a part of the Australian psyche. Finally, I want to talk about the economic plan that Labor took to the 2016 federal election, because TAFE was front and centre in that economic plan and it is front and centre of our economic plan going forward.
Vocational education is really important, and we need to continue making investments in vocational education. The Australian Skills Quality Authority, ASQA, is the federal regulatory body for vocational education. In the past the authority has operated on a partial cost-recovery basis. It charges for its services as a regulator to registered training organisations and Commonwealth Register of Courses and Institutions for Overseas Students, CRICOS, providers. It charges a mixture of annual registration charges together with these with respect to substantiated complaints or on the occasion of audits which discover breaches.
However, the techniques that the authority uses have evolved over time. Those techniques now include intelligence collection and data analysis. These activities, as you would expect, are now a core part of the authority's business. Whilst those activities informed targeted compliance and enforcement, they cannot be the subject of any fee or charge which can be attributed to particular providers. Over time these activities have been funded out of the annual registration charge. Because of changes to the scope of the authority's activities, there is a risk that the charges that have been levied by the authorities might be considered as taxes rather than fees for services. This of course raises the risk that the charges are unconstitutional by virtue of section 55 of the Australian Constitution.
These bills will amend the establishing legislation of the authority to clarify that the annual registration fees are collected under an act dealing with the subject of taxation for the purposes of section 55. This will mitigate the constitutional risk and facilitate the continuation of current funding and current activities and, as a result, put those activities beyond doubt. These bills, accordingly, are technical in nature and, for this reason, Labor supports the bills. It is perfectly appropriate that the authority pass on to industry the cost of regulation. This is a situation where, because of the evolution of the role of the authority over time, these amendments have become necessary. It is important to note that the authority has determined that intelligence collection and consequential data analysis play an effective and efficient part in performing its regulatory function. This is consistent with modern regulatory systems. It promotes efficiency and the targeting of resources based upon the evolution of the sector—a sector which continues to evolve even now.
It is vitally important that the maintenance of quality in the VET sector is something more than aspirational. This matters to students, it matters to providers and it should matter to industry. Above all, we need to have and to maintain the best vocational training system we can so that we can drive increased productivity in our economy. Well-paid, highly skilled jobs are driven by the flexibility and responsiveness of our vocational training sector. Industry demands that highly skilled employees are available as we make a transition towards specialised manufacturing and highly skilled trades.
Nevertheless, there have been significant problems in the sector—in particular as a result of dodgy practices. Many students have been left high and dry by unscrupulous providers who have exploited the system. There are of course well-run and highly regarded private operators in the VET sector as well as the state-run TAFE colleges. Good operators have had their reputations damaged by those who have exploited the system and have left students in the lurch. It is arguable of course that the reputational damage has hit the entire sector. Whilst it is clear that education—whether it is at university or in the TAFE sector—is acknowledged as the best pathway towards a better job, the fact that so many students have been left with debt or have been offered poor courses of little practical value to them is of significant concern.
As the reputational damage to the sector is repaired, it is very important that the regulatory system operates with integrity and is properly funded. Re-establishment of trust in the vocational training sector involves building quality and sustaining that quality at all levels. That means that there needs to be trust between TAFE, other providers, industry, government, teachers and, above all, students. For too long, the question of trust and collaboration has been undermined by the presence of unscrupulous operators. An effective regulator will ensure that all of the providers, whether in the public or private sector, are able to trust that no-one gets a free ride by behaving in an unscrupulous manner. This also must mean that ideology is left behind in funding technical and further education.
Labor believes that there is a place for a strong public TAFE system as the backbone of our vocational education system. The exploitation of students in the past by unscrupulous private operators has meant, in some respects, that the public system has been left to pick up the pieces. Distortions in the market have meant that these unscrupulous operators have flocked to easily-delivered, cheap courses, maximising their profit from public funding. In the main, the public system has been forced to address most of the expensive equipment-intensive, low-volume training load. There needs to be recognition that a public technical and further education system fulfils a vitally important role in preparing our workforce for the more complex skills based future.
There is another thing that needs to be highlighted about our public TAFE system. These colleges are locally based and enhance local communities. As has been highlighted by the Leader of the Opposition—and indeed in speeches today regarding the importance of technical and further education and, in particular, the public TAFE system—our cities, suburbs and towns are enhanced by the presence of these vital institutions. TAFE, the Leader of the Opposition argues—and I agree—is central to jobs in the regions and country towns. It is very easy to understand why. I did some background reading on the history of TAFE. If anyone wants to refer to a very good summary on the development of technical and trade training since the establishment of the mechanics institutes in England in the 19th century, I recommend a read of the Development of TAFE in Australia by Gillian Goozee.
The earliest iteration of these schools were schools of minds—the mechanics' institutes and technical schools established through the first half of the 19th century and throughout Australia. The mechanics' institutes were an interesting case in point. They were found in many cities and towns, and provided education to the working classes and the first public libraries. These were locally focused and provided direct benefits to local communities. They subsequently evolved; some may have become technical schools, some may have been subsumed into public library systems. In Tasmania, there have been many mechanics' institutes, some of which survive as buildings today, including the delightful Scottsdale Mechanics' Institute, which was recently renovated and now fulfils a function as a public hall. But the point is that these were, and are, local institutions. As the Leader of the Opposition has recently said, if a regional town in Australia has a TAFE, it is invariably better off than a town without a TAFE.
Opening up the vocational education and training sector to competition has not detracted from our TAFE colleges remaining local and well supported, and it has also focused on attracting overseas students to the regions. Recently I hosted in my electorate the member for Longman in her capacity as chair of Labor's Australian Jobs Taskforce. We visited the central Launceston campus of TasTAFE. We were able to see firsthand the importance of TAFE training in addressing workforce demand; in this case, delivering a Diploma of Nursing, which provides trained staff for aged care. It was particularly interesting to note that this TAFE had recruited students from overseas. Investment in innovation and the maintenance of high quality meant that overseas students were prepared to invest time and money in practical training in my electorate in Launceston, to enhance their employability within their own countries. I must also mention that one overseas student had previously worked in IT. He determined that IT was not going to provide stable, secure, long-term employment due to the threat of being outsourced, so he decided that a Diploma of Nursing with a focus upon aged care was going to provide for his long-term job security.
The history of technical and further education shows and successive reviews over more than 100 years have highlighted the positive economic benefits of investment in TAFE, whether the system is described as a system of technical colleges, schools of minds, trade schools or otherwise. The great economic advantages that were made after the Second World War were, in part, driven by investment in TAFE. The Whitlam years saw a transformation of the education sector, from technical and further education to universities. Gough Whitlam saw—as Labor does now—that investment in education transforms not only an individual's future but also the future of our communities and of our economy. The challenges that we faced in the 1970s, commencing with the dropping of tariff barriers and the deregulation of the Australian economy in the Hawke-Keating years, meant that we had to transform our workforce. Investment in education meant that we as a nation needed to ensure that we invested in both higher education and vocational education.
The economic plan that Labor took to the 2016 election was founded on education and training. Labor had a plan for investing in job-creating infrastructure to boost productivity. Labor knows, of course, that needs-based funding is essential to ensuring that lives are transformed using the power of education. This message is easily understood throughout our communities. The government says that it has adopted needs-based funding, but their actions speak otherwise. Central to our economic plan was a focus upon TAFE and upon restoring integrity to our national training system. We want no more of the shonky institutions that have sold to the most vulnerable in our society the false hope of real vocational training—when in reality, all they have been doing is generating enrolments through dubious inducements, free iPads and dodgy scholarships. In 2014, the 10 largest providers of vocational education in Australia received in excess of $900 million in funding. However, their results speak volumes. Only five per cent of their students graduated—that is 4,181 students. In other words, the public system spent over $215,000 a head on these 4,181 students.
Our future will be determined by our ability to provide training for the well-paid jobs of the future. Just as the IT worker from Singapore recognised that there is a better future in aged care, we need to recognise that the future will involve responding to outsourcing and automation. Faced with the potential for outsourcing and automation in a market which either has to increase demand or drive down cost, we need to be mindful that the secure jobs of the future are those which are unable to be outsourced or automated.
We are determined that our future is not a low-wage economy. Labor understand that we need a high-skilled, high-productivity labour market to support well-paid jobs. We know that by 2020 we will need at least 100,000 new medical allied health workers and carers in the aged-care sector and to assist in delivering the NDIS. Low-skilled work does not provide a secure future for our children. We must build a skilled and smart workforce. We recognise the importance of a fair wage. We support protecting low-paid workers who are in receipt of penalty rates. We need to recognise that the payment of fair wages supports not just the employment of individuals but sustains the local economies of local communities. As I indicated earlier, these bills are technical in nature but vitally important to ensure that the regulatory regime is maintained and is responsive on a fee-for-service basis. Labor supports these bills. I commend the bills to the House.