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Standing Committee on Education and Employment - 30/05/2013 - Role of technical and further education system and its operation

BORTHWICK, Ms Jessie, Head of Division, Tertiary Quality and Student Support, Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education

FURNELL, Ms Peta, Head, VET Reform Division, Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education

GRAHAM, Mr Martin Joseph, General Manager, VET Transparency Reform, Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education

GRIEW, Mr Robert, Associate Secretary, Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education

WOODGATE, Ms Christine, General Manager, Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education

Committee met at 11:29.

CHAIR ( Mr Symon ): I declare open this first public hearing of the House of Representatives Standing Committee on Education and Employment's inquiry into the role of the technical and further education system and its operation, known by its short title as the TAFEs inquiry. On 28 March 2013, the committee adopted the inquiry referred to it by the Minister for Tertiary Education, Skills, Science and Research. The minister's terms of reference were as follows:

TAFEs have played a critical role in the training and development of Australians for more than one hundred years. For many Australians, TAFEs provide a critical pathway to training and skills which are increasingly needed to access employment. They also play a critical role in regions and in providing access for disadvantaged groups.

The Committee will inquire into and report on the role played by TAFEs in:

the development of skills in the Australian economy;

the development of opportunities for Australians to improve themselves and increase their life and employment prospects;

the delivery of services and programs to support regions, communities and disadvantaged individuals to access training and skills and through them a pathway to employment;

the operation of a competitive training market; and

those jurisdictions in which State Governments have announced funding decisions which may impact on their operation and viability.

So far, the inquiry has received 179 submissions from individuals and organisations. In excess of 1,000 additional personal submissions have also been received from a Unions Australia organised survey of members.

Today, we will hear from the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education. I now welcome representatives from the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education to today's hearing. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the standing as proceedings of the respective houses. I thank you for submissions. I invite you to make an opening statement.

Mr Griew : Thank you for the opportunity to address the committee in relation to the role and operation of TAFE. This inquiry is welcome during a time of significant change occurring in the VET systems of states across Australia. The department has not made a submission to the inquiry. We thought it most useful to assist in the inquiry by answering any questions relevant to the Commonwealth's role in the operation of the national VET system. TAFE is primarily a responsibility of state governments. They are state owned bodies. Until recently, they were mostly run directly by state training authorities. It may be helpful to first draw a distinction between the responsibilities of the Commonwealth and those of the state and territory governments in the VET system. This will provide some context for our capacity to answer your questions and provide you with information on the issues raised.

Australia's national VET system is a shared responsibility of the Commonwealth and state and territory governments. The share of funding is about one-third Commonwealth and two-thirds state and territories. In addition, other funding is provided by the Commonwealth, such as support for apprenticeships paid to employers. While the Commonwealth contributes significant funding to the national training system and drives a national approach to the VET system, state and territory governments retain legislative responsibility for their state VET systems and govern the policy, operation and administrative aspects of their state training systems. States remain the primary funding source of subsidies that are directly paid to RTOs. This includes the policy and administrative settings of TAFE institutes, which are state government owned and managed under the relevant legislation of states and territories and which continue to evolve in line with the needs of each jurisdiction.

The COAG skills reform agenda is being pursued by the Commonwealth and the states and territories through the ministerial Standing Council on Tertiary Education Skills and Employment and its national senior officials committee. To provide you with some background on the broader skills picture, the COAG skills reform agenda is one which all state governments have agreed is necessary to bring much needed reform to the VET system. Central to the COAG agenda is an agreement to create a National Training Entitlement to at least a Certificate 3 for all eligible people. Extension of HECS-style loans for the upper qualifications in VET and increased responsiveness to the needs of industry, quality, transparency and equity.

Australia's economy is transforming quickly as economic conditions have led to unprecedented growth in some industries and pressures in others. Jobs are becoming more complex, and Australia needs more highly-skilled workers to do them. The Commonwealth has established the National Workforce Development Fund of $765 million over six years since the establishment of the program in 2011-12, while continuing to invest $1.75 billion over five years in the National Partnership on Skills Reform to support this COAG agenda. The NWDF is designed to help businesses increase workforce capacity and productivity, provide existing and new workers with opportunities to increase their skills through formal training and assist businesses where there is a current or emerging skill need. Industry makes a co-contribution to the cost of training under this fund. The national training system plays a key role in delivering the skills that Australia needs to meet the demands of the economy and provide Australians with the skills they need to get a better job. The NWDF is an additional Commonwealth investment to accelerate responsiveness to economic conditions and the needs of employers.

While Australia has a high-quality VET system, it does need to change. This is why all governments have agreed to reform the system through the National Agreement for Skills and Workforce Development and through the National Partnership on Skills Reform. Central to the national training system is the continued role of the public provider—or TAFE institutes in most jurisdictions—which has also been encapsulated in the Commonwealth-state agreement for skills reform. In signing the NP, COAG made a clear statement of support for the role of the public provider in servicing the training needs of industry, regions and local communities; their role in high-level training and workforce development for industry; and improved skill and job outcomes for disadvantaged learners and communities.

There has been much public discussion around this aspect of the development of the national training system since the agreements were signed. The Commonwealth has expressed concerns about developments impacting training overall in TAFE systems in three particular states. Negotiations with those three states are ongoing and it would not be appropriate for us to detail those negotiations in accordance with standard arrangements for officials giving evidence before committees. We may be able to assist the committee with data—for example, on actual budget movements in those and other states—as there is some misunderstanding of these facts. We may be able to assist by outlining the issues of concerns that we have held in terms of uncertainties created in those states. Similarly we may assist the committee with training numbers, such as we have access to, because these too are often commonly misunderstood. In addition the committee may also wish to ask us questions related to the operation of the three Commonwealth-state agreements governing the roles of the Commonwealth and states and territories in training and the history of Commonwealth and state investments. The committee may also wish to seek information from us on quality measures, including the creation and operation of the Australian Skills Quality Authority, the relevant standards and other initiatives to involve industry in quality assurance. We will be happy to follow up, obviously, any matters that we cannot give detailed answers to the committee's questions today. Thank you.

CHAIR: Thank you for that statement. Does anyone else wish to make an opening statement? Then I will start off the questions and then will shall share some around. You have framed some of my questions for me. I want to ask about the three states. I have seen reports of state government cuts in this area. I am wondering what those movements are, whether they can be quantified by the department and what impact there is on Commonwealth funding. In other words, is there a tie between a dollar that a state puts in and a dollar that the Commonwealth puts in?

Mr Griew : Let me answer the last part of your question first and then Ms Furnell may be best placed to give you the exact figure. The first thing to understand the agreements that govern the funding the Commonwealth provides to the states and then the states to the RTOs under the national training system component. That is governed by both the Intergovernmental Agreement on Federal Financial Relations, which sets the context generally for Commonwealth-state programs, and by the National Partnership agreement or the national agreement. Essentially the Commonwealth provides the funding to the states and the states provide the funding to the training organisations. There is no provision for direct matching under those agreements. The Intergovernmental Agreement on Federal Financial Relations has sought to move the focus of these agreements to more specific agreements in terms of outcomes and specific reforms, and so there are quite detailed requirements of the states in the agreement in terms of the growth of training places in aggregate, the growth of training places in particular levels of qualifications, and for particular groups such as older workers, Indigenous and so on. There are requirements that might be useful for the committee to see, and we can detail those if you wish. That is the way in which our funding contribution is governed. We govern, if you like, by outcomes which, I can assure you in having been involved in leading the negotiations, the states are very closely attentive to because they are very conscious that not meeting those outcomes has financial penalties attached to them and they will need in effect to maintain and grow their investment to meet those outcomes together with ours. But we do not specifically require a matching formula in the way that some special purpose payments did in the past. In the three states that you mentioned, where we have not yet finalised, and—it should be admitted, in honesty, in some other states as well—there have been budget measures which we have looked at very closely which have had year-on-year reductions in the funding provided. Ms Furnell will go through the specific states.

Mr PERRETT: I had hoped for just a yes-or-no answer to that question, but I am sure it is coming.

Mr Griew : A yes to what?

Mr PERRETT: In terms of the nexus between the state and the Commonwealth funding. This is still that same question, is it?

CHAIR: Maybe the right question is: how much is the Commonwealth putting into TAFEs in the current estimates period? Do we have that? Maybe that is a good start.

Mr Griew : I am sorry, but there is a level of complexity in these things. Our contribution is to the VET system. We do not make a specific contribution that is tied to the public provider; our contribution is to the VET system. There are two principal components. One is the special purpose payment which is governed by the intergovernmental agreement I mentioned and by the National Agreement for Skills and Workforce Development. In this year that is worth $1.388 billion and it essentially grows with indexation. Then there is the National Partnership Agreement on Skills Reform, and that is worth $238 million this year. That money goes into the state systems, as I said, and we govern by the outcomes that they must achieve.

Mr PERRETT: I understand it now.

Mr Griew : We can go further into any of those agreements or the outcomes required, but I am conscience of letting you set the pace a bit.

Ms Furnell : The Queensland government, in terms of its budget, is that the key part of your question?

CHAIR: Yes, it is. Now we have established the Commonwealth contribution, I suppose it is right to ask where we sit with those three states in particular.

Mr Griew : If we go through the three states, in the 2012-13 budget in Queensland the budget allocation is $1.328 billion, and this is a reduction against the previous year of $70 million.

Ms Furnell : We are aware that that will be a number of some ups and some re-arrangements of priorities. There were some increases in the re-arrangements of their priorities. They announced some increases for additional support for apprenticeships et cetera, so that changes the net figure as well.

Mr Griew : In New South Wales the same caveat should be applied, but the gross figure for 2012-13 is $2.1807 billion, which is a reduction of $40 million from the previous year. That is vocational education and training in total. Within TAFE—because we have a TAFE New South Wales allocation as well—2012-13 was $1.8095 billion, and the previous year was $1.8256 billion, so that is a reduction of $16 million.

In Victoria the picture is slightly more complicated, and it is worth trying to explain that, essentially, in 2012-13 it was $2.45 billion for their higher education and skills budget, which is a marginal increase from $2.449 billion. There is a component of that which is for VET, and the 2012-13 VET budget shows a decrease. Their higher education and skills budget was essentially the same, but there was a decrease in the VET budget which was significantly to do with a large blow-out in expenditure that the Victorian system had in 2011-12. To understand what has happened in Victoria one needs to understand—and this is in round terms—that there was a big increase from the 2008-09 year with the introduction of their entitlement—and theirs was the first version of the entitlement—which grew eventually to be well over $1.2 billion in 2011-12, and has come down to around $1.2 billion in 2012-13. So you have a shape like that.

Mr RAMSEY: Are you able to share those graphs and figures with us?

Mr Griew : We can extract some of the figures that are public and give them to you. They might help you.

Mr RAMSEY: Yes, I think they would.

Mr Griew : It is a complex picture.

CHAIR: There's nothing like a good graph.

Mr RAMSEY: Whatever you have might be useful.

Mr Griew : We can give you those public figures for sure. I just wanted to accept the context there, because otherwise the year-on-year gets a bit—

CHAIR: We are just starting out, and we need to get this right at the start.

Mr Griew : Yes.

Mr RAMSEY: Do you have any breakdowns of participation at TAFEs between city and country? I mean a participation rate per thousand people, or something like that—how many people access TAFE courses.

Mr Graham : We could extract from our data—

Mr RAMSEY: I represent a regional area in South Australia and that would be quite interesting to me. I do not mind where the figures come from.

Mr PERRETT: I am in the city, but in my electorate we have got an electrical TAFE that basically does all of Queensland. The guy from Mount Isa would have to come to my electorate. So I am just wondering how that unpacks—

Mr RAMSEY: I do not know whether you would be able to work that out using home addresses—

Ms Furnell : Yes, I think we would have to look at the data provide explanations or qualifications. You are right. You may not be going to a TAFE just nearby; you may be doing some of your on-the-job training nearby and come down to the city for technical stuff.

Mr PERRETT: And some of those select skills—the automotive and this wonderful Queensland—

Ms Furnell : That is right.

Mr Griew : It may not be participation rates, but we should be able to get you the figures of people participating.

Mr RAMSEY: That is a reasonable start. Do we have any idea of the percentage of students who are actually participating in TAFE to get an education for their first job as opposed to people who have a job and are picking up extra qualifications?

Ms Borthwick : I think that is available through survey data.

Mr RAMSEY: That would be the kind of thing I would also be interested in. Also, do we have any figures on TAFE courses and TAFE numbers that are for what I would call life improvement recreational skills rather than for improving job prospects? Just as an example, I once did a tree-pruning course at TAFE. I think my trees are all dead now and it could be quite arguable that it was not really in the national interest, but I did it.

Mr Griew : There is an occupation there.

Mr RAMSEY: Perhaps so, but I did not pursue it. We hear the stories about people going to TAFE and doing basket weaving. So I would like some understanding of what people are studying at TAFE and how much of it is hardcore job related education and how much is, 'Well, that would be a nice thing to do.' I know that is a lot of—

Mr Griew : Essentially I think they are components of the same question, which is: do we have data from surveys on the motives of people, including, first, job upskilling within existing jobs and, second, personal development?

Mr RAMSEY: That is it, yes.

Mr Griew : And you are also interested in that information by sector, if we can get it?

Mr RAMSEY: If so, yes.

Mr Griew : It would depend on what surveys were done.

Mr RAMSEY: It comes back to understanding what TAFEs are doing and maybe why they are losing market share. But that is the next step.

Mr PERRETT: I would like a bit more of a ballpark figure, so I can get my head around the sector, on that breakdown of special purpose money and national partnership for skills in terms of working out where the dollars go in terms of need now, the market now and future needs. I am not sure if there is a screaming need for tree loppers in South Australia and whether there is a market there. I am just trying to get into play the market need and the future need. There might actually be a future need for electricians. Do we know that that shortage is coming? How do we find that out? And is that only catered for under the national partnership for skills process? What is the interplay with the private sector? Someone there might say, 'I know there is going to be a shortage of fibre cable layers because the NBN project is being rolled out.' They might see an opportunity and jump in. I am just interested in that interplay.

Mr Griew : It is a really key question. It is an absolutely key question. To be completely honest, it is one that all the officials in all jurisdictions grapple with. Both the SPP, which is the large annual amount, and the skills reform additional amount are relevant, absolutely.The construct, as I said, is that the states are responsible for prioritising and running the state training systems.

Mr PERRETT: So the state minister has been lobbied or understands that we have a gas project coming up, and we are going to need blah, you know?

Mr Griew : Absolutely. At every ministerial council meeting the Australian Workforce and Productivity Agency, which is a body that the government has set up, does briefings for state ministers on some aspect of what is happening in the labour market and its skills, and it is something that the ministers greatly appreciate, I can tell you.

Mr PERRETT: So they are like economists for job places, are they?

Mr Griew : Yes, labour market economists doing planning. They are also monitoring skills quality.

Mr PERRETT: Demographics, projects, the whole shebang.

Mr Griew : And also themes and so on. They have recently released a report which has scenario planning, as Ms Woodgate was just saying.

Mr PERRETT: Okay.

Mr Griew : But the key thing is that the agreements in the national agreement include a general agreement between governments to move the investment towards areas of skills need.

Mr PERRETT: Geographic areas?

Mr Griew : No, occupational areas.

Mr PERRETT: Okay—which might be geographic as well?

Mr Griew : Absolutely.

Mr PERRETT: Even though we do national agreements, there may be more demand in north-western Australia than in Tasmania?

Mr Griew : Sure, but equally there may be a need for other skills in the markets that are losing workers to those areas too.

Mr PERRETT: Okay.

Mr Griew : If you go to Perth, there is plenty of need for the kinds of occupations where a lot of people with those qualifications are now working in the north-west.

Mr PERRETT: Okay.

Mr Griew : The National Partnership Agreement on Skills Reform also has specific commitments that states have made to attend to those same areas, and in different states they all have different mechanisms for doing that. One of the commitments they made to us as officials is playing a role in getting their mechanism talking with the Australian Workforce and Productivity Agency and our own people. If you want details on those again, I notice Ms Furnell has turned to that part of the agreement. But that is basically the way it works.

Mr PERRETT: Is the private sector outside our inquiry?

Mr Griew : Everything I said referred to the states' administration of funding to both sectors

CHAIR: It would use it into that area as well.

Mr PERRETT: Okay.

Mr Griew : So they will make choices about how they invest either through subsidy levels or through grant levels or through capping numbers. They will have their own mechanisms for targeting areas of need. They may also encourage either public or private to focus on those areas of need in different ways.

Mr PERRETT: Chair, could I just tease it out a bit more to get my head around it.

CHAIR: You are talking about the operation of the competitive training market.

Mr PERRETT: Yes, thank you. I am from the education sector, so it is a slightly different mindset for to get my head around. Take the Victorian government. You know Ford is closing down, so you are saying these people will need to be retrained. We might be looking at a job situation here, but the Queensland government could also be looking at Gladstone and saying: 'We've just given all these licences out. We are going to need people here.' We are a Federation, not the United Kingdom. It is just a market reality. We do not move people around. We do not move skills around. No-one gives up their fiefdom. The Victorians want to do their training in Victoria.

Mr Griew : Sure. So the character of that training may be different. In a market that has high growth in one high-skilled area—like Queensland or WA in the last few years, with high demand in the resource sector and resource related construction—there will be a big training need and labour appetite, which does lead to some people moving. Australians are not hugely mobile across jurisdictional boundaries. In states that have a different economy, there is a very strong need for training in those markets too to help both industry adjustment and labour adjustment to changing needs. So governments are quite active in this area. I should mention the National Workforce Development Fund, which I mentioned earlier. That is not run on jurisdictional boundaries; it is run nationally by the national government, working with industry skills councils. I mentioned that in my opening remarks, and that is run nationally by the national government through the Australian Workforce and Productivity Agency. That works through industry sectors. And when we have had significant industrial change—for example, the BlueScope changes in Wollongong or what is happening with Ford—the labour market programs, the skills programs, are state and federal and both governments will work together so that employers who are picking up workers will have access to assistance if it is either in retraining or in other forms of labour market assistance. DEEWR, the Department of Employment, Education and Workplace Relations, and us tend to work together very actively in those cases, so it is not just left to the jurisdictional programs.

Mr PERRETT: I imagine that getting it right is hard. The Browse project has been on the books for 20 years or 25 years; so if you rushed out to become a gasfitter, or whatever you do to work on the gas field, you have been waiting for 20 years for that particular project. I imagine that, like any economist, they do not always get it right, and it is hard to meet the market supply and demand.

Mr Griew : That is right, I mean you do have to have a certain reserve in the ability to plan all these things centrally, but a lot of the RTOs are pretty active themselves in trying to work out where the market is going. If you talk to the TAFEs in Western Australia: they will tell you that they are incredibly active in talking to industry and talking to employers, trying to work out where the trends are going and how they respond to them. And the private RTOs in some markets are also particularly active.

Mr PERRETT: Okay, thank you.

Ms O'NEILL: Thank you very much, this is all fascinating. Could I just ask if we could have a copy of your opening remarks? There was a fair bit of information in there that is a pretty good summary of the area.

Mr Griew : Sure.

Mrs PRENTICE: While I appreciate that you have indicated you are happy to answer questions, it would in fact be really helpful to have a brief from you, like a written brief, to read with your deep knowledge in black and white for us to look at as we move forward, because it would even have informed my questions in a better way this morning.

Mr Griew : Sure.

CHAIR: It will be our reference for the rest of the inquiry, so we would appreciate it.

Mr Griew : Yes. I apologise if that has in any way disadvantaged you. I am just always conscious that we provide a whole lot of material before we know what you are really interested in. But we can certainly back up with a kind of 'sense of' and some data, not just against specific questions but against the general areas you are asking about.

Ms O'NEILL: The terms of reference, exactly, yes. That would be great, with a bit of an eye to them.

There are a million questions on this area that I would like to ask but I just want to open up the area of quality, because I heard that mentioned in a couple of the introductory titles. I come from a teaching-in-school background and I am delighted to see trade training centres in schools, enabling kids to have that opportunity to undertake vocational education that was just really out there in TAFE and to let them to have that experience. Connecting learning to real-life work is wonderful.

But I am faced with a dilemma where just the other day I was out in the community and I met a gentleman who is vision impaired and running a small business. He has a very good relationship with his TAFE. He has been able to complete a cert 3 and that has enabled him to set up a business, run it successfully and support his life. He is still in contact with his TAFE teachers; they ask him to come in and do some work with them from time to time with students. The teachers have informed him that the cutting of resources and support for students in TAFE is so severe that it is just impossible for them to provide that level of support for somebody like him, who would be in need of particular learning support to be able to get the skills so they could get the job—and do the job.

He asserted to me quite confidently that if he were to begin to do now in TAFE what he was able to do previously in TAFE he would be denied access to that education. I have got that from him directly. I have looked through quite a number of the submissions. I am hearing from teachers and students alike that cutting is absolutely impacting on the quality of their experiences, and they are very distressed about it. I would like your response to the impact of the cuts to TAFE on the quality of teaching capacity, learning opportunity and students with particular needs.

Mr Griew : It would probably be worth asking New South Wales TAFE that question directly. They are responsible for administering New South Wales TAFE and we have given you the dimension of the cuts that were made in New South Wales.

Ms O'NEILL: $40 million in one category.

Mr Griew : $40 million over VET as a whole, of which one component is the TAFE budget, which I think was 26.

Ms O'NEILL: Sixteen.

Mr Griew : Sorry, 16 and that is against quite a large budget. You have a cut, but proportionally it is not a large cut, compared to the kind of efficiency dividends that public sector and corporate sector bodies are administering in this economic climate. It sounds as if there is more to the case than can be explained just by those macro-level cuts. Something is happening inside New South Wales TAFE—inside that institute—in terms of the distribution of resources or other factors. We get ministerial representations from individuals and we take seriously any concern of a particular student especially a student with a disability who is trying to put their best foot forward in the labour market, but it is a bit hard to comment on what exactly is happening there from that headline level figure we gave you before. If you want to give us details, I am happy to follow them up with our New South Wales colleagues to see if they have any explanation to offer. I am sure you get my problem: there is a headline level which in some ways is the figure is and then you are down into what is happening in a particular institute in a particular region and the distribution between different groups of learners or courses and that is all contained within that figure. It is a bit hard to tease out from where we sit, but we can follow it up if you wish.

Ms O'NEILL: It seems in the community report that something definitely is happening that does not match what you were talking about with what you regard as a reasonably small decrease. I have to ask another question about the quality of the delivery of services. I am sure that with the federal government putting in a third and the state putting in two- thirds that the funding agreements would be asking for quality assurances. How are you picking up whether the quality is there or not?

Mr Griew : There has been significant reform about quality under this government. The TAFE sector, along with the rest of the VET sector, was quality regulated by the states until the creation of the Australian Skills Quality Authority, ASQA, and New South Wales was one of the first states to refer its regulatory role to ASQA. So, ASQA has had New South Wales since the beginning of its operations and ASQA regulates against a standard which is a national standard. We think and all ministers have agreed that national standard was inadequate and needed to be reviewed.

The Commonwealth government proposed that as soon as ASQA was set up there would be a review of the national standard to require more quality assurance. So there is an issue there and if you ask employers in general about the VET sector they will say that there is an issue there from their point of view as well. So at the moment where that is up to is that the National Skills Standards Council, which advises ministers on the appropriate standards, has put out a public position paper, after extensive consultations, and has proposed some significant increasing of quality requirements. Ministers will consider that as a kind of policy position shortly and then it will be turned done the track into new regulations. Ms Borthwick's division is responsible for managing that process from a Commonwealth point of view. We are confident that (a) there is a big need for better regulation and clearer standards and that governments have recognised that. Hopefully these new standards, when they are introduced, will be a much better assurance to students and to employers about the quality of the sector.

Ms Borthwick : If I could just add to that, some of the things that the Council is looking at strengthening in terms of the standards are things like having a written agreement between the provider and the student as to the nature of the provision they are going to get so that the student is fully aware of what the course is and what the delivery arrangements are for that course. Those arrangements are not in place at the moment.

Ms O'NEILL: How does that manifest itself? With the problems that arise of this not being in place, what does it look like it? What do you hear of the problems that currently exist?

Ms Borthwick : We are not exposed probably at that level of granularity to what happens at the level of a registered training organisation. Certainly the national regulator, ASQA, would have a view of that. Since they have been in operation from 1 July 2011, they have had written notices of intention to cancel and suspend to 108 providers. So they are working very vigorously in the market to assess against the current standards where they see shortfalls or failures.

Mr Griew : I think it would be fair to say that the Chief Commissioner of ASQA has been pretty active in pursuing very tough regulatory action but also has made clear to us and other jurisdictions that he would welcome clearer standards to give him more purchase as well on those sorts of issues.

Ms O'NEILL: Thank you. In terms of those 108 RTOs, would the experience of students be like one that has been reported to me of a private training organisation that promised to assist a student who was undertaking a motor vehicle apprenticeship and mechanic apprenticeship and was promised training? Somebody showed up after nine months at the workplace and ticked off all the requirements and that was it. That was the sum total of the interaction provided by a private provider. Is that the sort of thing that some of these RTOs have been doing?

Ms Borthwick : Certainly the quality of delivery and assessment I know has been of concern to the regulator. So they are looking at those particular aspects and they are also looking to the current review to strengthen those provisions.

Mr Griew : One of the other things that the National Partnership on Skills Reform has in it, which comes directly from industry, is an agreement that all jurisdictions will pilot—and by 2016 hopefully will take to scale nationally—direct industry involvement in assessment. So that you have students graduating knowing that their ticket has a quality tick from perspective employers in their sector because we do not want the entitlement to be an entitlement to ta training that has not then got market clout, which is the sort of situation you are referring to. So there are those sort of cases among a range of others—some quite egregious—that the regulator has come down hard on, but it is also true to say he has sought and he has got a lot of support from ministers and the Skills Council for a desire for tougher standards against which to be able to take action because, obviously, if the standard is not as clear, then you do not want the regular saying we have done this on a kind of judgment basis if they are challenged in the AAT.

Ms O'NEILL: Do you think it is fair to say that the quality of training—because it was under the body of a public body, TAFE, and that had its own history, its own established procedures—was better before all the private providers of education came into play? How many of those 180 involve a TAFE course?

Mr Griew : The first thing I should say is that, yes, having that history, having that level of investment over a long period of time, having an institutional kind of context like that, does protect quality. That said, one of the things that ASQA is doing that probably was not happening uniformly prior to that is that it is actually regulating all sectors, so that it does not just tick off anything. So, just because it comes from a TAFE—

Ms O'NEILL: That is very appropriate.

Mr Griew : Well that probably was a bit of the past here, and, while those worst cases probably are not mostly in the TAFEs—the ones that have led to a kind of notice to close, certainly—

Ms O'NEILL: The 108 you mentioned, yes.

Mr Griew : there certainly have been cases with public providers where the regulator has said, 'No, that shouldn't still be on your scope; you're not up to it,' or, 'We're not going to increase your scope to take on that course.' So we have got a regulator who has been prepared to cut across anybody's bows if they are going in the wrong direction.

Ms O'NEILL: And that is appropriate, too, but—

Ms Borthwick : I think that is right, because the scale of the TAFEs and some of the larger private providers probably means that, rather than the whole institution having a problem, there is an issue around a particular course, so it is more likely to play out during a course registration or a change of scope. I do not have clear enough data with me today on what that sort of breakdown looks like, but that will be more where I think TAFE probably comes to the attention of the regulator.

Mr Griew : I am going a bit off, but I have examples in my mind of where the regulator has said to a public provider, 'You've got a problem with your particular course here,' yes.

CHAIR: Could I continue on with that quality line, because it is from Victoria where we had many problems come up with the system. We have got some really good private RTOs in Victoria and really good TAFEs, but there was a particular issue in Victoria with what I like to call shopfront providers—the sorts of providers that, for a cert III course or less, would offer a holiday to the Gold Coast or a free iPad. I even had them just down the road from my electorate office; they were everywhere—it was quite epidemic. When you spoke before about the blow-out in costs in Victoria, I suspect a lot of it actually went back to that. Is that now unable to happen? Have we got to a point where that is cut out of the system, or can that still happen because a state regulator may not be acting in that area?

Mr Griew : There is a couple of things to say there. One is: there were a number of those examples which came to our attention at the time—they might have been from your office. So they were coming through, and the regulator is actually doing a piece of work on advertising—promotional activities of RTOs. So the regulator has the authority to do a range of different kinds of activity, and they can look at themes, if you like, as well as looking at particular RTOs, and that is one they have taken on because obviously everyone was concerned about that kind of activity. That is one of the reasons, as Ms Borthwick was saying, that it is important that there be focus on the individual learner and their agreement with their RTO; it is not an entirely commercial transaction.

The other thing to say is that the Victorian government did have to respond, having opened its entitlement up as wide as it did. And, while we had some concerns about the way in which they brought those parameters in, I think we acknowledge—and our minister at the time was on the record also as acknowledging that they had to bring them in and it could not be a kind of 'anything goes' kind of market, and was supportive of some of the measures taken to focus subsidies much more on areas of need. So there has been quite a lot of activity inside the Victorian system subsequent to those sorts of issues. Could it ever happen again? I do not think we are at a point where we could guarantee that, but I certainly think there have been a lot of changes in the Victorian system, subsequent to those concerns, and also with our regulator taking on the issues as well.

Ms Furnell : The only point I will add to that is that in the Victorian system in addition to the ASQA regulator or the Victorian regulator itself—

Mr Griew : There is also a Victorian regulator.

Ms Furnell : A Victorian regulator for within the state. For training which is subsidised there is actually a contract between the Victorian government or a state government and the RTO. I recall that the Victorians have reduced the number of providers on that subsidy list, so you might have more registered but only a subset do subsidised training. So there is, if you like, some additional involvement of government around the conditions of that contract. The Victorians have looked at the number of providers they have had doing subsidies. Some of that competition of marketing behaviour that you are referring to can be affected by those contractual arrangements.

CHAIR: Continuing on quality, my concern is the consumer—in other words, the student, the person that goes to the TAFE or the RTO. Where do they get a judge of the quality of the course that will be delivered at an institution and what can we do to make sure that that is as uniform as possible? From what I have seen in my own part of the world, there is not an easily accessible method to say, 'This is the best institution because it has got a good reputation for doing this; I would like to go there as a student, versus the one that has just set up shop down the road. Is there something that is happening in our space, from the Commonwealth, in that area of quality and its relation to the users and students of the system?

Mr Griew : I was just flicking through the agreement looking for it, but Ms Furnell, as the expert on the agreement, will find it in a second. It is a really important point. One of the agreements in the National Partnership Agreement on Skills Reform and something that is really important to the federal government is the creation of clear and transparent available information on course options for them, by locality in their area and by provider. There is a lot of work happening when we refer to the transparency reform agenda. It is about making clear to the students and employers what the quality, the availability, the price and everything else is so that they can make informed choices. Do you want to explain, Peta, where the agreement is?

Ms Furnell : The transparency part of the agreement under the national partnership, at clause 26, is enhancing the data collections, because we only have data on those that are receiving a subsidy. There are quite a lot of other private providers. About 1.9 million students are going through the current collections, but there might be a total of more like 3.3 million students doing accredited training. So obviously getting a better picture of that and where that training is will be of great help in number of areas.

There are also a couple of other clauses, including an important one about consumer information. This is where the My Skills website comes in. That has data drawn from another website on all RTOs, the scope of their training and the data that is currently available on their activities. So you can get a little bit of a guide to the number of students who are undertaking subsidised training and that sort of thing, and also its location and so forth. It is helping students locate RTOs and then it is to go on to enhance, as we work with our state colleagues, how to use the data well in a way that would not be misleading. We can look at more data from the student outcome surveys in future about, for example, the exact question you were raising earlier around what happens. Do they get a job? Were they employed before they started? Is there a higher level of completions in that field? That will give an indication of the nature of that RTO, so people can then see whether that better suits their needs. So there is a little bit of work in progress as data improves and as we agree with the states on how to present that data in a way that is useful but not misleading, if you know what I mean. Often that is quite tricky. So it is comparable.

Mr RAMSEY: Let's take it right back to where we started, to funding, and a couple of other things that occurred to me. Can you give me any idea what part of TAFEs' overall budgets would come from student fees?

Mr Griew : We have financial reports from the NCVER with possibly some information on that, but maybe we should take it on notice.

Mr RAMSEY: I am happy with that. While we are on that, I think this may be beyond you, but, once we ascertain the level of student fees, is there any way of discerning whether the students are funding that themselves or whether it is being funded by a jobs provider, through migration, through the English language course or whatever? Is it government derivative money or private money, or is there no way of telling that?

Ms Furnell : From the point of view of the proportion through fees paid for by students, no, I do not think we can do that, although we can see what we can find out about the sort of funding that is available. They might be going through into—

Mr RAMSEY: I can give you a couple of numbers off the top of my head. We know that new migrants get 200 hours, I think—we should remember that off the top of our heads—of English language, and presumably that is provided by the migration department. We know that, for instance, if someone is going for a job, there are so many hours of training depending on what level they are on.

Ms Furnell : There are a number of programs, including through from of our own department around the literacy and numeracy—

Mr RAMSEY: Anyway, just any information you have got and are able to provide would be useful.

Ms Furnell : Some of that will go through RTOs and some will not, so it is a slightly diverse story.

Mr Griew : And some will be employers too.

Mr RAMSEY: Yes, that is right. It is just an interest to know, in the end, how much external money is coming into the system and how much is taxpayer money-go-round.

Mr Griew : There will be some of that, for sure. I suspect that, to the extent we have anything on there, it is more likely to be from research literature than from the administrative data, but we will have a look.

Mr RAMSEY: Thank you.

Ms O'NEILL: Can I follow up actually on a statement made by the member for Grey regarding the role of TAFEs—technical and further education.

CHAIR: I ask that a member move that we authorise a subcommittee for the purposes of today's hearing.

Mr RAMSEY: So moved.

CHAIR: There being no objection, it is so carried.

Ms O'NEILL: There is some question about whether technical and further education is completely directed at jobs or whether the journey of education in its own right is part of a right of citizens in the country just for further education and the development of the self. Regardless of what sort of definition we have offered at the moment, what is the department's view of the impact of these cuts that we have been seeing on the medium to long-term future of TAFE?

Mr Griew : We have had concerns about policy changes in three jurisdictions, which we have been fairly clear with whose jurisdiction about. That has been part of the fact that those implementation plans have not been signed yet. The issues there, to be honest, are somewhat more about policy than budget levels. In the medium to long term the VET system as a whole has had a lot more funding, especially since 2007, when there was a very big increase of funding.

Ms O'NEILL: From what source?

Mr Griew : Significantly, from the federal government, although with the introduction of the entitlement of Victoria, as I outlined, which was under the last Victorian government, that policy setting led to a very big increase of expenditure there as well.

The issues that we have been focused on are also about the nature of the long-term policy settings, so I do not think that we would give you a view that there is some sort of bleak future for the public provider. There has been a lot of change in this system. There is a lot of change in the economy it serves. There has been a lot of extra funding go in. There has been a big change in the regulatory structure. It would not be appropriate to go into the nature of the discussions we have with other states—especially the process of negotiating agreements—but I would go so far as to say those discussions and the officials in those jurisdictions and in the others where we have signed agreements are very focused on those kind of changes and how to manage those changes so their system is healthy. They have employers and economies they are responding to as well. So what I am saying to you in a perhaps quite circuitous way is it is not just looking at those budget changes; it is looking at the system overall and the amount of changes, and there is a lot of good in those agreements we are trying to achieve as well. So you have got to try, when you ask a question that goes to the medium term, to look at the overall reform.

Ms O'NEILL: When you refer to policy settings in the area, what are you referring to there? What do you mean by that?

Mr Griew : We have wanted to know in all jurisdictions that the future of provision in regional areas was secure. We have wanted to know that in thin markets provision is secure. We have wanted to know that equity groups will continue to have access to high-quality provision. We do not have particular requirements like that it has to be through the TAFE that currently exists—it could be through different kinds of changes over time—but we want to see a change process look out for provision. It is the end consumer that we are concerned about and that is what we have wanted to be assured about.

Ms O'NEILL: Can I ask a question on notice, Chair?

CHAIR: Yes.

Ms O'NEILL: You mentioned six areas in which we might ask some questions. One was budgets in the three states. Another was training numbers. The third was operation of three agreements, history and the equality authority. I think they were the last statements in your opening remarks. I would be interested in what you would like to tell us about all those areas when you provide us with something in writing. I am sure that you can anticipate some of the questions I might have after this today.

CHAIR: Okay, I think on that notice we might bring this hearing to a close. I thank the representatives of the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education for your attendance here today. You have been asked to provide several additional pieces of information, and the committee would appreciate it greatly if you could forward that on to the secretary. I also need to ask a member to move the committee authorize publication of the evidence given before it at the public hearing today.

Ms O'NEILL: So moved.

CHAIR: Thank you Deb. There being no objections, so resolved. I thank the witnesses, my committee colleagues, Hansard and broadcasting and the secretariat. The hearing is now closed.

Committee adjourned at 12:34