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Tuesday, 22 May 2012
Page: 5080

Mrs ANDREWS (McPherson) (20:01): I rise to speak on the National Vocational Education and Training Regulator (Charges) Bill 2012. I have spoken in the past about the creation of a national vocational education and training regulator, due to the need to maintain consistency across Australia. If every state were to operate its own system with its own regulations, the difficulty in ensuring compliance amongst the almost 4,500 VET operators, and ensuring that each student is receiving a quality education, would become exponentially greater in the years to come. With the introduction of legislation to that effect, the new Australian Skills Quality Authority has assumed the role of the registration and monitoring of registered training organisations from state and territory bodies. It does so through undertaking compliance audits and investigating complaints about registered training organisations. In past speeches to the House, I have stated that the government has introduced a supposed national system, which at this stage is still not operating nationally. I note that Western Australia and Victoria have still not signed up to the framework, whilst Queensland's parliament still has the legislation before it. So how can this be a national system when three states are missing from the framework? The obvious conclusion is that it is not, and that any truly national system cannot exclude any state, especially those that, combined, account for almost 12½ million of Australia's total population of over 22 million.

The coalition in the past has been generally supportive of the creation of the Australian Skills Quality Authority, as there has been a definite need to ensure consistency across the country. Nonetheless, there has always been the concern that the organisation would be based on a cost recovery basis. This is compared to the previous systems operated by the states and territories, where registered training organisations were instead given subsidies or financial support from their relevant government for registration and regulation costs. Because of this difference between the old and new systems, many registered training organisations will find themselves having to pay more for compliance than they used to—something that they may not have factored into their operating costs and would be of major concern to them. With increasing costs needing to be accounted for, it is likely that some providers may need to put up their fees for students or, alternatively, they will have to cut services so that they can simply provide the services in the first place.

The Council of Australian Governments agreement that was struck between the Commonwealth and the states with respect to the Australian Skills Quality Authority states that the states will maintain the ability to provide financial support or subsidies to registered training operators. This is not mandatory but rather a choice by the states and territories. Given that many states are trying to rein in their budgets from former bad Labor governments, it cannot be known whether these sorts of measures will definitely be implemented.

Another concern is the discretionary power of the minister to set the level of charges to be imposed on registered training organisations. Introducing a cost recovery model for the Australian Skills Quality Authority may potentially harm smaller and regional providers in the long term. As the Australian Chamber of Commerce and Industry stated in its submission to the Senate inquiry:

… whilst ACCI supports reasonable fees to training providers as a market mechanism, we do not support the notion that ASQA has to be a cost recovery body.

The submission goes on to say:

The regulatory and audit approach should not be inhibited by a cost recovery model, as to do so could lead to one or both of the following two unsatisfactory outcomes:

Insufficient monitoring of the quality of training delivery

Fees, including fees for audit, that are so high as to limit the participation in the training market of small business training companies.

The concern that is highlighted here is that, if cost recovery is not adequately supplemented by the federal government, there is a possibility that the costs recovered may not be sufficient to maintain the costs of enforcing compliance. Further, the model may lead to the charges of registered training organisations being increased to such a point—to maintain the Australian Skills Quality Authority's costs—that it would lead many registered training organisations to opt out of the training market altogether, and it would inhibit new providers from entering the market. This will affect competition in the market and ultimately leave students worse off due to a lack of choice of training provider and the range of courses that are offered and available in their area.

The Australian Council for Private Education and Training submission noted another concern regarding section 7 of the bill and the costs incurred by the regulator. ACPET queried as to whether, as stated in the bill, 'costs and expenses incurred by the regulator in conducting the audit' would include travelling costs to where the registered training organisation is located or, in the case of some institutions, to the multiple locations where it is based. If this were the case then the viability of having VET institutions in rural and regional areas diminishes due to the cost burden not only placed by the charges imposed by the cost recovery system but also because of the need to pay travel expenses for auditors and officials, which, depending on where they may be travelling to, could easily account for hundreds of dollars.

Many of the concerns addressed in these submissions reflect those of registered training organisations in the VET sector. By increasing the costs on small providers, it places them in a much more difficult position to provide quality services. The priority of these providers is to give a quality education to their students and prepare them for the workforce, but they cannot do that if they are inadequately resourced due to large overheads.

The VET sector not only supplies the future workforce with the tools of the trade and the current workforce with the ability to re-skill and improve their productivity but also provides thousands of Australians with employment. By limiting participation in the training market, we remove the ability of both domestic and international students to choose where they want to go to receive an education. That point has in the past been made by the Australian Chamber of Commerce and Industry. Clearly, it is the right of all students to be able to choose where they want to go, and we should be supporting that rather than making it harder for them to do so.

The contribution made by the VET sector and the educational sector as a whole to our national economy cannot and should not be underestimated, with education being Australia's fourth largest export and contributing $5.9 billion in 2009-10. Thousands of Australians pass through educational institutions every year and thousands more international students come to Australia to take advantage of our world-class education system, both at school and in tertiary and VET sectors. All these things need to be considered when developing education policy and they should not and must not be placed in jeopardy. I will not go as far to say that the cost recovery model and the current system in place does so, but it does raise questions as to what is the best way to ensure consistent compliance nationwide and how we support the VET sector in growing and continuing to provide world-class courses to both domestic and international students.

In summary, there are numerous concerns that have been raised by stakeholders with regard to the changes that will be implemented by this bill, and many of these need to be addressed. The current system cannot continuously be called a 'national' system, as I have stated, if a large part of the nation does not currently subscribe to it. Although I am supportive of a national regulatory system to ensure compliance and quality education throughout Australia, this system still has a long way to go before it can achieve its intended objectives.

Debate adjourned.