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Friday, 22 June 2012
Page: 4252


Senator FAWCETT (South Australia) (12:50): I rise to address the National Vocational Education and Training Regulator (Charges) Bill 2012. There are a number of important points that I would like to cover. Unfortunately, given the guillotine that the government and their Greens alliance partners have yet again imposed, I only have about nine minutes to cover them. I would like to talk about the importance of vocational education, the principle of regulation, the practice of regulation by this new authority as it has been encountered by small businesses in the sector, and some particular concerns with this bill.

Firstly, in terms of vocational education, obviously with the need to sustain and hopefully grow the manufacturing sector and the services sector in Australia we need vocational skills. There are a number of areas that provide that, but the small business sector and the 4,500 RTOs across Australia are a very important part of providing that. Quality is an important element to that. There is no point having organisations that give out pieces of paper where people do not actually receive the required skills. The determination of that quality, though, brings me to a point that I want to get on the record again. Industry led curriculum is the best way to make sure we have young people, or older apprentices, who are trained, who come out job ready and who can add value to their employers and to the economy.

I cite yet again the example of the technical colleges established as Australian technical colleges under the Howard government. I look in my own state of South Australia at St Patrick's Technical College, which has a board led by industry so that the curriculum, the rate of work, the type of training and the topics covered are actually focused on what industry needs. When people come out of that college they are snapped up by employers because they have the quality and the training that the employers want. I place on the record that, if it is led by the training institution, you may well have quality but it may not be what the employers need. That straightaway means that those young people, or adults, are not as employable as people who are trained in an organisation which is led by industry.

I notice a number of people in the private sector, Mr Forrest amongst them, are pushing the idea, for example in the area of Indigenous employment, that if industry will guarantee a job but the government will allow industry to direct the training then you will get good outcomes. That is a principle that we in this place must consider as we look at training programs and funding for training programs. We need to engage industry, who at the end of the day are the employers, to make sure that the training is focused. Almost by default, quality will follow, because that is what employers are demanding.

Having said that, the principle of regulation and then audit is something the coalition agrees with. We support the concept of a national regulator. I also put on record the fact that this does not only apply to the training sector. Across a number of areas, the coalition supports the concept of local control, local delivery and local accountability, whether that is within government departments or whether that is out in the private sector, as opposed to centralised control and delivery from big government in Canberra. But the way you achieve that in terms of having a quality outcome is by having a regulatory structure with a closed feedback loop of audit and reporting.

So in principle we support and have supported the creation of a national regulator for the vocational training sector. The issue is: how does it work in practice? That is part of the concern we have with the system that is in place. That is partly because, as has been pointed out by the government, not all states have signed up to it, which indicates that they are still exercising their rights in a federation, which is what Australia is, to say what is in their state's best interests. Rather than criticising them for that, we should be asking: what is wrong with the system that they are not prepared to sign up for it? At the end of the day, one of the strengths of Australia is that we have checks and balances in the fact that we are a federation and states have a head of power that they can exercise to decide whether or not they support legislation that comes out of this place. If we cannot get their support, rather than just criticising them we need to work with them to find a way forward that will achieve the benefits that the legislation for the national regulator intended.

Some of the issues that small business are pointing out to us in terms of the implementation are the very large increases in costs, some going from in the order of $2,000 to $3,000 to up around $37,000 in costs that are being borne by business. For a small business, those kinds of costs are just not sustainable in the long term. The unintended consequences, sometimes, of legislation are something that politicians from all sides need to make sure that they understand so that when we announce policy and think it through we actually look at it from a systems engineering perspective and we understand all the unintended consequences.

One of those unintended consequences for small business—and this is a particular concern—is the delay. We have had reports of anything from six to 12 months for a small RTO trying to get an approval for a Certificate III. Given the kind of marketplace reaction time a small business needs to be able to capture a particular market element, the dead hand of regulation from a centralised body is just stifling the ability of that organisation to make its product and its business work. Regulation is fine if it is effective, if it is supporting and if it is timely—if it is actually working to make the product offered by that business better, as opposed to making it almost impossible for the business to get on and deliver its role.

Particular concerns for the charges bill go to regional providers. The bill is talking about the fact that this regulator can charge reasonable costs in terms of the audits and also any investigations. That might be fine if you are in a capital city, but in South Australia, for example, if you are Balance Training Services, a training group in Mount Gambier, or if you are the Australian College of Community Safety, in Berri, or if you are the Regional Training Organisation in Whyalla Norrie, the costs to get out to those places, the overnight accommodation costs and the hourly rates are significantly higher. If all of those are going to be passed on to small business, it makes it a non-viable and an unfair impost on regional training providers. And often it is the small businesses providers who are prepared to go and set up in a regional area to meet the needs of regional businesses, because young people there do not necessarily have access to the larger corporate or government training organisations that people who are based in the city may well have.

There are a number of areas in which I think we could try and make this charges bill better. Some people have asked why it is a separate bill. The wisdom of the parliamentary system here is that under section 55 of the Constitution these charges essentially form taxes, and therefore it needs to be a separate bill. We are here in the Senate, and a tax bill cannot be amended in the Senate. Therefore, despite the fact that some amendments may be able to make the bill better, we are in a position where we will have to oppose this bill.

It is not that we are opposed to vocational education. The coalition have a strong record of supporting vocational education, particularly industry-, business- or employer-led vocational education so that we get the focus and the quality that makes the graduates job-ready. We are not against the principle of setting a standard and holding people to account to make sure that they meet that. That is a good model to allow distributed control of activities, account­ability of the person providing them and meeting a standard. We support that concept.

But we also recognise that the implementation is as important as the principle. If the implementation is not right, if it actually represents for small business the dead hand of central government regulation which stymies their efforts to create jobs and to create opportunities for young people to move into existing jobs, then it is not something that the coalition is prepared to support. So, whilst we support vocational education, we support the principle and we have in the past supported the concept of the national regulator, for this bill and the charges that go along with it the coalition is not prepared to—

The ACTING DEPUTY PRESIDENT ( Senator Pratt ): Order! The time allocated for the consideration of this bill has expired. The question is that this bill now be read a second time.