Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Pursuant to standing orders 38 and 166, I present documents listed on today’s Order of Business at item 17 which were presented to the President, the Deputy President and temporary chairs of committees since the Senate last sat. In accordance with the terms of the standing orders, the publication of the documents was authorised.

The list read as follows—

(a) Committee reports

1. Joint Standing Committee on Foreign Affairs, Defence and Trade—Report—Review of the Department of Foreign Affairs and Trade annual report 2009-10 (received 21 July 2011)

2. Economics References Committee—Third interim report—State government insurance and the flood levy (received 29 July 2011)

3. Economics Legislation Committee––Report––Exposure draft of the Business Names Registration Bill 2011 and related bills (presented to the President on 15 August 2011, 4.20 pm).

(b) Government responses to parliamentary committee reports

1. Legal and Constitutional Affairs References Committee—Report—Australian Law Reform Commission (received 8 July 2011)

2. Education, Employment and Workplace Relations References Committee—Report—Industry Skills Councils (received 25 July 2011)

3. Joint Select Committee on the Parliamentary Budget Office—Report (received 1 August 2011)

(c) Government documents

1. Australian Customs and Border Protection Service—Report for 2009-10—Correction (received 14 July 2011)

2. Gene Technology Regulator—Quarterly report for the period 1 January to 31 March 2011 (received 20 July 2011)

3. Defence portfolio—Estimates of proposed expenditure for 2011-12—Portfolio budget statements—Correction (received 8 August 2011)

4. Productivity Commission—Report no. 53—Caring for older Australians (2 volumes) (received 8 August 2011)

5. Productivity Commission––Report no. 54––Disability care and support (received 10 August 2011)

(d) Report of the Auditor-General

Report no. 1 of 2011-12—Performance audit—The Australian Defence Force’s mechanisms for learning from operational activities: Department of Defence (received 12 July 2011)

Ordered that the committee reports be printed.

In accordance with the usual practice and with the concurrence of the Senate I ask that the government responses be incorporated in Hansard.

The documents read as follows—

GOVERNMENT RESPONSE TO THE SENATE STANDING COMMITTEE ON LEGAL AND CONSTITUTIONAL AFFAIRS REPORT ON ITS INQUIRY INTO THE AUSTRALIAN LAW REFORM COMMISSION

The Government has repeatedly put on record its strong support for the work of the Australian Law Reform Commission (ALRC) and agrees with the Senate Committee’s assessment that the ALRC's work is widely respected.

Since its establishment in 1973, the ALRC has concluded more than 100 inquiries and has made a substantial contribution to the public debate on issues as diverse as privacy, personal insolvency, the use of genetic information, admiralty law and the operation of the federal justice system.

This contribution continues, with the ALRC’s recent work with the New South Wales Law Reform Commission on family violence (ALRC 114: Family Violence – A National Legal Response (2010). The recommendations in this report are helping to shape the Government’s response to this complex issue, including by influencing the landmark Family Law Legislation Amendment (Family Violence and Other Measures) Bill 2011 that is currently before this Parliament.

The ALRC is currently going through a period of transition. Reforms made to the Australian Law Reform Commission Act 1996 (the Act) by the Financial Framework Legislation Amendment Act 2010 give the ALRC greater flexibility in the way it goes about its work whilst providing an appropriate governance framework that preserves its independence.

The Government believes that the reforms will generate opportunities and ongoing benefits for the Commission, and is committed to working closely with the Commission as it adapts to these changes.

Recommendation 1

6.1 The committee recommends that the Australian Government restore the ALRC's budget cuts for the period 2010-11 to 2013-14 as a matter of urgency.

Government Response to Recom ­ men ­ dation   1

Not accepted

As with other Australian Government agencies, the Commission is required to meet the efficiency dividend. The Commission’s budget was also reduced in the 2009 Mid-Year Economic and Fiscal Outlook, the savings from which are a key component of the Government’s commitment to returning the Budget to surplus and maintaining spending restraint to support long-term stability.

The Government is satisfied that the ALRC has sufficient funding to discharge its important statutory function – to conduct inquiries into matters referred to it by the Attorney-General.

The ALRC is implementing a range of measures that will provide substantial savings over time, but which will not compromise the delivery of its core work. These measures include relocating to more affordable premises.

In the interim, additional financial assistance is being provided to the ALRC through the Attorney-General’s Department to allow the appointment of a second full-time commissioner to assist for the duration of the review of the National Classification Scheme. Terms of reference for this inquiry were released on 24 March 2011.

The Government has full confidence in the ability of the President of the ALRC, Professor Rosalind Croucher, to manage the organisation within its appropriation.

Recommendation 2

6.2 The committee recommends that the ALRC Act be amended to provide for a minimum of two standing, fixed-term (not inquiry-specific), full-time commissioners.

Recommendation 3

6.3 The committee recommends that an additional full-time commissioner be appointed, for each additional inquiry referred to the ALRC, in circumstances where the ALRC already has two or more ongoing inquiries.

Government Response to Recommendations 2 and 3

Not accepted

A key aspect of the reforms contained in the Financial Framework Legislation Amendment Act 2010 is the removal of mandated numbers of commissioners. The purpose of this reform is to allow the ALRC to use its appropriation more flexibly in responding to the work it has on hand. This revised structure takes into account the varied, and often highly technical, subject matters of inquiries.

As outlined in relation to Recommendation 1, the Government has appointed a second full time Commissioner, Professor Terry Flew, for the duration of the inquiry into the National Classification System. Professor Flew’s expertise in media and communications will be a great asset to the Commission for this review.

The Government anticipates that the second Commissioner position will continue to be filled beyond the inquiry into the National Classification System. In keeping with the Government’s desire for greater flexibility, the Government would look to fill the position in a way that best suits the ALRC’s program of work at the time of any appointment.

The Attorney-General is committed to ensuring that consultation with the ALRC on its capacity to take on new work continues to occur before new references are given.

Recommendation 4

6.4 The committee recommends that the ALRC's public information and education services program be resumed immediately.

Government Response

It is a matter for the President to determine the best use the ALRC’s resources to undertake inquiries into matters referred to it by the Attorney-General.

Recommendation 5

6.5 The committee recommends that the ALRC be provided with all necessary resources to enable it to continue to travel to undertake face-to-face consultations as part of its inquiry processes.

Government Response

It is a matter for the President to determine the best use the ALRC’s resources to undertake inquiries into matters referred to it by the Attorney-General.

While the Government agrees that there is value in face-to-face consultations, the ALRC’s innovative use of online consultation practices demonstrates the variety of ways in which a law reform body can reach stakeholders.

Conclusion

As it approaches 40 years at the forefront of law reform in this country, the Government believes the ALRC is well equipped to respond to new challenges and opportunities.

The Government has an ambitious law reform agenda and is confident the ALRC will make a significant contribution to that agenda.

AUSTRALIAN GOVERNMENT RESPONSE TO THE SENATE EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS REFERENCES COMMITTEE ' S REPORT OF THE INQUIRY INTO INDUSTRY SKILLS COUNCILS

JUNE 2011

The Australian Government has a continuing commitment to investing in the economy's productive capacity through better and more targeted skills and training, measures to boost participation, and improving the private sector's opportunities to invest in infrastructure.

Through the Building Australia's Future Workforce package, announced as part of the 2011-2012 Budget, the Government has invested in a new approach to deliver the skilled workers the economy needs. The package has four components:

The package strengthens and extends the role of industry in the national Vocational Education and Training (VET) system. The involvement of industry in the Australian VET system has been a defining feature of vocational education and training in Australia for almost two decades, and has given rise to its high international standing.

Primarily, industry engagement is realised by representation of industry bodies on, and industry direct input to, the various formal committees and councils that guide the policy agenda for the national training system. This high level of engagement at all levels of decision making ensures that industry plays a leading role in driving training policies, priorities and delivery.

The core of industry's leadership of VET in Australia is also realised through its active involvement in the development of industry-validated Training Packages. Through a network of Industry Skills Councils (ISCs), industry has a direct say in determining relevant skills needs for the industry and defining the competencies required in the workplace.

Since ISCs were established in 2005, their role and responsibilities in the national VET system has been expanded and strengthened. ISCs are recognised and accepted as key organisations underpinning the effectiveness of the national VET system and key sources of advice regarding workforce skills and training needs.

The Building Australia's Future Workforce package reflects the significant role of ISCs in the national VET system. ISCs will be key contributors to the implementation of the Building Australia's Future Workforce package through participation and collaboration in all four of the package's components, for example, in the National Workforce and Productivity Agency, National Workforce Development Fund, Language, Literacy and Numeracy Programs and Apprenticeship reform.

Background

National Vocational Education and Training (VET) System

For more than 15 years, Australia's Commonwealth and state and territory governments have worked with industry to develop a national training system that provides the basis for high quality and nationally recognised training.

Under Australia's Constitution, primary responsibility for schooling and vocational education resides with the state and territory governments. In general, the Australian Government takes a national leadership role and works collaboratively with the states and territories, industry and the community to advance national consistency, coherence, quality and effectiveness of education and training in all sectors across Australia. It focuses on the development of national and international priorities, policies and strategies for education, while the states and territories are responsible for regulation and delivery within their borders.

National Skills Framework

The national VET system is underpinned by the National Skills Framework. The National Skills Framework provides the basis for high quality, flexible, nationally consistent vocational education and training which meets industry needs and which employers can trust. The framework has three components:

1. Australian Qualifications Framework (commonly known as the AQF) —establishes the appropriate level of qualifications according to broad vocational competency levels.

2. Training Packages — establish the competency outcomes from nationally recognised training.

3. Australian Quality Training Framework — sets the national standards for the registration and audit of training organisations and accreditation of courses.

Industry Skills Councils (ISCs)

ISCs, and a new national industry training advisory body for the automotive industry-Auto Skills Australia, are privately registered companies run by industry-based boards of directors (employer and employee representatives). Their funding is provided substantially by the Australian Government through the Department of Education, Employment and Workplace Relations (DEEWR).

ISCs and Auto Skills Australia are independent of government, employer and employee bodies, regulators and licensing bodies, and Registered Training Organisations (ISCs and Auto Skills Australia cannot be Registered Training Organisations). ISCs bring together industries, peak bodies, enterprises, unions, training organisations and governments through a national system of industry advisory arrangements and structures based on industry-led boards of directors and committees. Thus ISCs are uniquely placed in the Australian VET system to:

The Senate Report of the Inquiry into ISCs reflects the overwhelming message of the 119 submissions to the Inquiry that:

The Report's recommendations reinforce the message of the submissions and suggest some improvements in the operation and management of the ISCs. These have been considered by the Government and some have already been acted upon in the context of developing a new Funding Agreement between DEEWR and ISCs which is expected to be executed by the end of June 2011 and cover the period 1 July 2011 — 30 June 2014.

Following is the Australian Government response to each recommendation.

Recommendation 1

The committee recommends that all 11 ISCs review their activities to ensure that their primary focus is directed at training package oversight and strategy, and that this work remain separated from the work of RTOs in product development and training delivery.

Australian Government Response

This recommendation is supported and reflects current arrangements.

The following comments are offered in relation to:

The committee is strongly of the view that ISCs should use their government funding to pursue their core activities.'

The Australian Government provides core funding to the 11 ISCs and Auto Skills Australia to:

Since their inception in 2005, ISCs have built on their role in the key area of developing and maintaining Training Packages and have grown into their strengthened role in workforce development under the Government's Skilling Australia for the Future policy announced in November 2007. The success of ISCs and recognition of the value of the ISCs contribution to the effectiveness of the national VET system has led to increased demands and expectations in relation to the range and volume of services that ISCs could provide under the core Funding Agreement.

The core Funding Agreement provides a strong framework that enables DEEWR to monitor and manage the ISCs' performance of their key roles and responsibilities and to ensure expenditure of government funding accords with these. However, the Australian Government recognises that the funding provided under the core Funding Agreement does not and cannot cover the range of all of the possible activities that ISCs could undertake as contributors to the national VET system. The scope of what ISCs can do is limited by the funding they receive under the core Funding Agreement and their related capacity. ISCs' Annual Business Plans provide a mechanism that enables DEEWR to ensure that funds provided through DEEWR-ISCs core Funding Agreements are spent in accordance with the purpose of these Agreements and Government priorities. Under the Funding Agreement ISCs, must provide an Annual Business Plan for DEEWR approval.

The following comments are offered in relation to:

'...The production of training materials should only be considered where there is a demonstrated. unmet need and any conflict of interest is avoided.'

ISCs are the only bodies that have a mandate to develop and maintain Training Packages. A Training Package is an integrated set of nationally endorsed units of competency, Australian Qualification Framework qualifications and assessment guidelines designed for a specific industry, an industry sector or enterprise.

Training materials are the materials or resources that are developed to support the delivery of and/or assessment of Training Package qualifications. ISCs do not have an exclusive mandate to develop training materials; these materials may be developed by other organisations.

While ISCs are allowed, and may, under the core Funding Agreement develop training materials, given the limitations of the funding available, the associated capacity constraints and the number of demands on these resources, ISCs have to carefully prioritise their activities and, as a consequence, the majority of ISCs do not develop training materials.

ISCs as independent companies are able to develop training materials from sources other than funds provided under the core Funding Agreement. Some ISCs do have a commercial `arm' of their organisation with which DEEWR has no contractual relationship.

Identification and management of Conflicts of Interest is addressed under the Corporations Act 2001 and in the core Funding Agreement. Management of Conflict of Interest is addressed in more detail in the response to Recommendation 6.

Recommendation 2

The committee recommends that the ISC CEOs Forum examine the prospect of developing a template for environmental scans to foster greater consistency in the timing and reporting, and to encourage better utility of the scans for affected stakeholders.

Australian Government Response

This recommendation is supported and reflects current arrangements.

The requirement for ISCs to produce an annual Environmental Scan (E-Scan) was first introduced in 2008 by the National Quality Council (NQC) - a Committee of the Ministerial Council for Tertiary Education and Employment responsible, until 1 July 2011, when the National Standards Council becomes operational, for the Training Package Development and Endorsement Policy. The NQC's Training Package Development and Endorsement Policy provides the policy framework for the timing, style and focus of the E-Scan.

DEEWR has provided the ISCs with a template and guidelines to assist with the development of E-Scans. The guidelines and templates are regularly reviewed in

consultation with Skills Australia and with the ISCs' CEOs. The guidelines and template for the E-Scans are updated in response to the feedback and in alignment with the NQC's Training Package Development and Endorsement Policy.

The focus of E-Scans, as described in the Training Package Development and Endorsement Policy, is to provide a national high level snap shot of current and emerging skills needs based on industry intelligence. Thus the E-Scans do not purport to, and cannot provide an enterprise, jurisdiction or region with a detailed workforce and skills development plan.

The requirement to deliver an annual E-Scan is also a requirement of DEEWR-ISCs Funding Agreement, which stipulates its delivery date for each ISC as the end of February each year.

The productivity and participation focus of the Government has increased the need for a more systematic approach to workforce development and for matching skills and training delivery with the current and future needs of industry, sectors and regions. As a consequence, the expectations of E-Scans have increased over the last few years.

A new independent agency, the National Workforce and Productivity Agency, will be established under the Building Australia's Future Workforce package. Its role will include the development of sectoral skills and workforce development plans in conjunction with ISCs and industry. The provision of independent advice on sectoral and regional skills needs to support workforce planning and productivity, including small business, will be critical to this particular role.

In the context of the new Agency's roles and activities, the role and content of E-Scans may need to be reviewed, taking into account that ISCs are not research, or data gathering and analysis agencies and may have a limited capacity to develop E-Scans that may be needed in the future.

While the evolving and growing expectations of E-Scans and ISCs' role in this regard are acknowledged, the E-Scans, as a requirement of the Training Package Development and Endorsement policy, remain for now as specified by this policy.

The Senate Committee also recommends that the ISCs CEOs' Forum develops a template and mechanism to achieve greater consistency in the timing and reporting of E-Scans. However, given that these considerations are covered by current policy and that the CEOs' Forum is an informal body, the CEOs' Forum may not be the most appropriate body to consider the changes to the template and to E-Scans generally. Its advice and views on E-Scans may be sought in the future in the context of current policy review, when undertaken.

Recommendation 3

The committee recommends that the government develops standard contracts with clauses detailing accountability and reporting requirements for all paid works undertaken by ISCs under contract to government agencies. These standard clauses should be incorporated into contracts between DEEWR and each ISC.

Australian Government Response

This recommendation is supported and reflects current arrangements.

DEEWR funded projects are contracted utilising DEEWR standard Funding Agreement templates. The templates meet the requirements of the Financial Management and Accountability Regulations, Commonwealth Grant Guidelines and the DEEWR Procurement Manual and, as such, provide a sound accountability and reporting framework.

The ISC core Funding Agreement incorporates the standard DEEWR contractual requirements and clauses and the same template is used for all DEEWR core Funding Agreements with ISCs.

Each DEEWR core Funding Agreement with an ISC details:

A key reporting requirement in the core Funding Agreement relates to financial accountability. It includes Annual Audited Financial Statements and a Final Audited Financial Statement and Acquittal of Funds.

The payment of instalments under the core Funding Agreement is linked to DEEWR's acceptance of satisfactory progress against requirements and deliverables described in the Agreement. DEEWR is able to withhold payments until satisfied with the quality and content of the reportable item. Thus ISC core Funding Agreements provide a strong and consistent reporting framework and mechanisms to ensure that ISCs are accountable for the expenditure of funds and the delivery of the project outcomes.

The existing DEEWR standard Funding Agreement and relevant clauses provide sufficient mechanisms and frameworks to ensure that legal and fiduciary requirements are followed and met. In recognition of the importance of accountability and reporting requirements, DEEWR in the new Funding Agreement with ISCs for 2011-2014 has further strengthened reporting requirements using the existing standard clauses.

While Government funding provided via the Funding Agreement is the main source of ISCs revenue as independent companies, ISCs also access funding from other sources. which may include other Australian Government Departments as well as state and territory governments. Contracts of all Australian Government Departments and Agencies are required to comply with the Financial Management and Accountability Act 1997 and promote the efficient, effective and ethical use of Commonwealth resources, including contractual accountability and reporting requirements.

Within the boundaries of the legislative requirements, it is ultimately up to each Government Agency or organisation to determine the terms and conditions under which their financial support is provided.

Recommendation 4

The committee recommends that future contracts between DEEWR and ISCs require the holding of sufficient funds to comply with statutory obligations of directors under relevant corporate legislation, and prohibit the ownership by ISCs of physical assets, such as real estate, that are not directly related to the effective performance of their role.

Australian Government Response

This recommendation is supported and reflects current arrangements.

The following comments are offered in relation to:

DEEWR and Industry Skills Councils require the holding of sufficient funds to comply with statutory obligations of directors under relevant corporate legislation....'

The requirements of Australian Securities and Investments Commission (ASIC) and the current core Funding Agreement meet this recommendation.

ISCs are independent companies registered with ASIC and they are subject to the Corporations Act 2001 (Act). Under the Act, directors of a corporation must ensure that the corporation is trading solvently. A necessary corollary of solvency is to ensure that the corporation has sufficient reserves to meet existing statutory obligation. Additionally, the core ISC Funding Agreement requires that ISCs comply with all statutory obligations including the obligation to trade solvently. There is no need to duplicate ASIC requirements or to include additional clauses in the Funding Agreement to address the requirement to trade solvently.

The following comments are offered in relation to:

`.... prohibit the ownership by Industry Skills Councils of physical assets, such as real estate....'

Under the terms of the current Funding Agreement, ISCs could acquire physical assets as long as the asset was under $100,000 and as long as the asset was used for the purposes of the DEEWR-ISC Funding Agreement. Any purchase involving funds of $100,000 or over requires DEEWR's approval. This constraint clearly would not allow ISCs under the current funding arrangements to purchase any real estate from the core government funds.

As ISCs are independent legal entities, DEEWR is not in a position to prevent them from purchasing real estate with funds from sources other than those provided by DEEWR.

Recommendation 5

The committee recommends that DEEWR's contract with each ISC requires that directors receive no remuneration but that reasonable costs incurred for travel, accommodation and incidentals expenses incurred while exercising the role of director be reimbursed.

Australian Government Response

The Australian Government does not support this recommendation.

The payment of remuneration for directors is an internal issue for each ISC.

The governance arrangements of ISCs reflect their status as independent, not-for-profit companies. ISCs are incorporated as public companies that operate under the Corporations Act 2001. As such, each ISC operates under the rules of its constitution, is managed by a bi-partite (employers and unions) board of directors and is accountable to ASIC for the observance of its obligations under statute and common law.

Acceptance of this recommendation would potentially interfere with ISCs' internal corporate governance and potentially result in ISCs being unable to attract suitable directors especially from small business.

Recommendation 6

The committee recommends that any new contracts between DEEWR and the ISCs from June 2011 explicitly require ISC board directors to declare any simultaneous membership of RTO boards, regardless of whether there is a potential for any conflict of interest.

Australian Government Response

This recommendation is supported and reflects current arrangements.

ISCs are subject to the Corporations Act 2001 (Act). The core ISC Funding Agreement requires that ISCs comply with all statutory obligations; this includes the obligations and responsibilities of directors.

Under company law, directors must not allow a conflict of interest to compromise their position. Directors must not place themselves in a position where there is a real or substantial possibility of a conflict of interest. Sections 182 and 183 of the Corporations Act 2011 deal with improper use of information and improper use of position. These Sections identify that it is a director's obligation not to place his or her own interests or those of persons with whom a director is linked, ahead of that of the corporation. This applies not only to use of the position of a director, but also to the use of information that comes to the director.

The need to identify and manage circumstances where a real or perceived conflict of interest might occur is also included as a standard clause in the core DEEWR-ISC Funding Agreement. Under the terms of the core Funding Agreement, ISCs are required to ensure that to the best of th