Senate debates

Friday, 22 June 2012


National Vocational Education and Training Regulator (Charges) Bill 2012; Second Reading

12:20 pm

Photo of Brett MasonBrett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Hansard source

The National Vocational Education and Training Regulator (Charges) Bill 2012 relates to the oversight of the vocational education and training industry by a national regulator. This bill does not conjure up rhetoric or emotion, but I will do my best.

Vocational education and training is an important industry, as you know, Mr Deputy President, so the oversight of quality and standards in VET is an important responsibility of any Australian government. It is crucially important for Australia both domestically and of course internationally. Lately, the discussion of education in this country has focused largely on our schools. Honourable senators would of course be well aware of the debate raging about our schools, subjected as they have been over the past five years to the government's amorphous Building the Education Revolution program, and about our universities, which are currently undergoing the most significant reforms in a generation, sponsored of course by the Bradley review of higher education, which uncapped student places. So there is much reform in the education space.

This reform, following the recommendations of the Bradley review, is meant to assist the government in its goal of ensuring that at least 40 per cent of young Australians hold an undergraduate degree by 2025. That is four young people out of 10—four young Australians having a bachelor degree or more—continuing the trend of the past few decades of vastly expanding the number of Australians with a tertiary education. One of the hard things for educators, and, indeed, policy makers, to get their minds around is that no longer are our universities elite institutions catering to a small minority of students; increasingly, of course, they are institutions of mass education. So their role has changed fundamentally over the last 20 to 30 years.

While VET does not generate as much media interest or debate as schools or universities, it is nevertheless very important for the economic wellbeing of our nation. Particularly at the time of a mining boom, our economy needs a large number of workers qualified in many trades. The resources sector—its mines and all the associated infrastructure—is generating a tremendous demand for construction workers, electricians, welders, boilermakers, truck drivers, excavation equipment operators and countless others. Our VET institutions face a crucial challenge in trying to supply all these qualified workers. I see in the chamber my good friend Senator Cash, who is from Western Australia. She knows the difficulty that the mining industry has, in Western Australia, in particular, in trying to locate sufficiently qualified people to undertake all the duties associated with the mining industry. That largely falls on vocational education and training.

But it is not just the mining industry: the health and growth of all the other sectors of our economy require a large cohort not just of professionals but also of people with those allied technical and trade skills. Our economic growth, our productivity and our employment growth depend on the VET industry being able to satisfy domestic needs. So it is a critical part of Australia's productivity and educational infrastructure.

As I mentioned earlier, the importance of the VET sector is not just domestic in nature. I think I have said this perhaps 100 times over the last few months to honourable senators, but let me say it yet again: education is Australia's fourth largest export, after coal, iron ore and gold, and it is our largest services export industry, ahead even of tourism. Most people do not appreciate that education services which Australian institutions provide to hundreds of thousands of overseas students every year contribute almost $16,000 million dollars to our economy—$16 billion a year to the Australian economy from the international education sector. That is from schools, from VET and from our universities. So it is an enormous industry and one I think is still underappreciated by the public and at some levels by parliamentarians and public policymakers. But I think we are getting there. We are making some progress. VET accounts for $3.1 billion of the total of $16 billion, and English-language training for a further $675 million per annum.

It is not surprising that maintaining, and indeed improving, quality and standards is of crucial importance in the VET sector. Quality and standards are critical. We need to supply people with good, respected and worthwhile vocational education and training qualifications because otherwise they will not find appropriate employment and our employers will not find qualified workers to fill vacancies—or we will have no choice but to fill them with underqualified, unsuitable candidates. Either outcome will have dire consequences for our economy. Western Australia is a great example of this. There is still concern from some of the mining companies that operators of various pieces of equipment and those with trades and technical skills are not sufficiently qualified or indeed their training does not sufficiently meet the needs of the industry. These are very difficult issues that TAFE and VET have to come to terms with.

VET is also an export service that we in effect sell overseas to international students, so we need to maintain quality and standards to stay ahead of our competitors overseas who would want to help themselves to our share of the international education market. International education is a very competitive industry, in VET and particularly in universities and higher education. It is a very competitive marketplace. Any sense that there has been a slip in standards or quality means a fall-off in international student demand, and therefore a fall-off in what this country earns through our largest services export industry. We are talking about a major potential impact. Quite simply, unless the reputation of the VET education we provide is strong, overseas students will not continue to come to our shores to gain qualifications and contribute billions of dollars a year to our economy.

There is more at stake here than just VET itself. We have to look at international education as a whole and even though VET is only part of the industry and is dwarfed by universities, it is nevertheless part of what many of us in this place call Brand Australia—it is so powerful, so attractive and often so very lucrative. Damage VET and you can damage our overall reputation as an international education provider. It is fair to say that over the last two years some dodgy VET providers have undermined Brand Australia. It affects not just the VET sector; it affects also the university sector. We saw not so long ago institutions in Melbourne—hairdressing institutions and other VET providers—actually causing concern about the quality of university education being provided by this country. In other words, problems with standards in the vocational education training sector can impact on our university export industry. That of course is a big problem.

To be fair I must pay tribute here to Senator Evans and Senator Kim Carr, both of whom have looked at this issue and I think taken appropriate action in many cases. In fact, I remember when I first came into the Senate one of Senator Kim Carr's great crusades was against dodgy providers who did not measure up to standards. I have to pay credit both to Senator Kim Carr and to Senator Evans, because they have prosecuted many of these issues very well on behalf of the government and the community.

We cannot allow the collapse in standards, because it will have an effect right across the sector—universities, VET and English training. Standards and quality are critical. The national regulator is the outgrowth of this valid concern for the health and wellbeing of the sector. The Australian Skills Quality Authority, ASQA, was established in 2011. It replaced state and territory run regulatory bodies, there being the view that Australia's international reputation deserves a unitary focus or indeed a national one. ASQA, was established through agreement at COAG, with the majority of states and territories seeking to address quality concerns and lack of consistency within the VET sector. Clearly, there were different standards in the states and territories and the government did the right thing to try to bring those different standards of quality and quality assurance into one particular body, ASQA.

ASQA has responsibility for the registration and monitoring of vocational education providers. It fulfils its responsibility for monitoring ongoing compliance with registration standards by undertaking compliance audits and investigating complaints about national vocational educator registered training organisations. Compliance audits are the main method used for monitoring compliance as well as investigations into complaints received about the performance of training providers.

The object of this bill, the National Vocational Education and Training Regulator (Charges) Bill, is to enable ASQA to charge registered training organisations for compliance audits and substantiated complaint investigations conducted by the regulator. That is the aim of the bill. In setting up ASQA, COAG agreed that the regulator would be established on a cost recovery basis, initially funded by partial cost recovery. This is in contrast with the previous system, where state and territory arrangements did not operate on a cost recovery basis, opting instead to partly subside registration and regulation costs. Under the COAG agreement, states and territories are still able to provide subsidies and/or financial support to registered training organisations to assist with registration cost; however, it is their choice whether they wish to do so.

The coalition has some concerns. The coalition has always been a strong supporter of the VET sector. We understand its importance to our economy as an export industry. We want to ensure the wellbeing and future growth of the sector. I do not have to remind the Senate that the coalition is a staunch champion and defender of quality and standards in education, be it primary, secondary, at schools, at universities or at VET institutions. I have made this point frequently in relation to universities, but it is just as applicable and important in relation to vocational education and training.

The coalition acknowledges the role for an industry regulator and supports its work to maintain quality and standards through the VET sector, and in particular to prevent the re-run of the provider collapses of just a few years back. As is so often the case the opposition does not have a dispute with the government about ultimate ends or aspirations, but we do about implementation and about the way the government seeks to get there. We believe that there will be significant cost impositions on providers as a result of this bill. Many registered training organisations are small businesses that are already confounded by the vast amounts of red tape under the compliance regime. In their submission to the inquiry into the bill, ASQA acknowledged this reality. They said:

… for most RTOs, the proposed ASQA fees and charges will be an increase on what they have paid in the past. This is because most state and territory governments have subsidised the cost of regulation.

That is something that they—the state and territory governments—will not necessarily continue to do, particularly in the current tight fiscal environment. These costs are not insignificant. Based on the average salary of a compliance officer and making allowances for on-costs and overheads, ASQA indicate that the hourly rate would be in the vicinity of $111 per hour. Additional costs would be incurred where various subtasks were completed by other employees within ASQA.

Proposed section 7 in the bill also states that the regulator can charge both for the costs incurred in Australia and, as it says in part (b):

… if the audit is conducted outside Australia in whole or in part—any reasonable expenses incurred by the Regulator relating to the audit or part of the audit.

Since educating overseas students is such a big part of the VET industry, such costs would not be at all unusual nor would they be insignificant.

The coalition is concerned that the high cost of compliance may cause financial difficulties for some smaller providers, given that their costs may equal those of some of the larger or publicly funded providers. Providers in rural or remote areas may also be further disadvantaged by the proposed cost recovery for auditing if they are required to fund the travel costs of the auditors. In their submission to the Senate inquiry, the Australian Council for Private Education and Training, ACPET, highlighted this, querying whether the cost of conducting an audit would also include travel costs and other costs associated with the travel. If this is in fact the case, providers in rural and remote areas will have a significant additional cost burden relative to that faced by those operating in metropolitan areas. In addition to identifying the likely cost imposition, ASQA acknowledges:

… the higher fee may discourage the accreditation of some vocational courses that are currently delivered in the community education sector such as those offered by Neighbourhood Houses or welfare agencies.

As the coalition senators said in their dissenting report on the bill:

1.1 The Coalition holds grave concerns about the increased economic and regulatory burden this Bill will place on providers. The Australian Skills Quality Authority’s submission even states that: 'for most RTOs, the proposed ASQA fees and charges will be an increase on what they have paid in the past. This is because most state and territory governments have subsidised the cost of regulation'.

1.2 We acknowledge that the Intergovernmental Agreement makes provision for states to continue to assist in meeting these costs. However, if the states are not required to help reduce the end cost to the providers, in all likelihood they will not.

1.3 The submissions received by the Committee reiterate the concerns held by the sector and the Coalition, that there will be a lack of transparency with potential fees and charges and the impact this could have on smaller rural and regional providers in particular.

That is the concern of the coalition.

While the coalition believes in the crucial importance of maintaining quality and standards in the VET sector, we consider that the mechanism in this bill has the potential to be too onerous for too many providers, particularly in rural and regional areas. For this reason, the opposition will be opposing this bill.


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