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Education and Employment References Committee
16/07/2015
Private vocational education and training providers

BURGESS, Mr Mark John, National Apprenticeship Officer, Electrical Division, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

CURRY, Mr Ian, National Coordinator, Skills, Training and Apprenticeships, Australian Manufacturing Workers' Union

DUGGAN, Ms Anne Michele, Education and Training Coordinator (Victorian branch), Construction & General Division, Construction, Forestry, Mining and Energy Union

SHIPSTONE, Mr Tim, Industrial Officer, Australian Council of Trade Unions

[12:11]

ACTING CHAIR: I would now like to welcome witnesses from the Australian Council of Trade Unions. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. The committee has received your submission. I now invite you to make a short opening statement and at the conclusion of your remarks I will invite members of the committee to put questions to you.

Mr Shipstone : First of all, thanks for the opportunity to appear before the inquiry today. It is an inquiry which we very much welcome. Along with many others, unions have highlighted for years now the dangers of a market-driven approach to VET, as the training system has been opened up to thousands of private training providers attracted by the ready availability of public funding in an often poorly-regulated environment. It is students and workers who have been left worse off by these developments, receiving substandard training that does little or nothing to help them find a job, often with a debt to go with it. Meanwhile, as documented in a report earlier this year by the Workplace Research Centre, private providers have pocketed vast amounts of public funding, and the position of TAFE, one of our great national institutions, continues to be undermined. This issue continues to be the biggest blight on the reputation and integrity of the VET sector.

If anything, since the inquiry was announced late last year, this issue has been gaining greater attention, with a string of reported cases involving poor training, combined with predatory recruitment and marketing practices to get students to sign up to VET courses. The most egregious of these are the number of cases brought forward of large, successful private providers using third-party brokers to entice vulnerable individuals to enrol in expensive VET courses of dubious value which those individuals are, often, not all that well suited to undertaking. As the committee would be quite familiar with, students in these situations are often targeted with offers of zero up-front fees and 'study now, pay later' through the government's VET FEE-HELP scheme, as well as inducements such as free iPads. Many of these courses are delivered online, in unrealistically short time frames, and by teachers with inadequate qualifications and skills.

It is clear, in our view, that we have a problem. There is a growing consensus that we cannot let things continue the way they have been. If the committee accepts the evidence before it, the critical point is how we respond. In our written submission, we outlined some of the measures that we think are required. We also endorse the findings and recommendations in the AEU submission and the report by the Workplace Research Centre. We do acknowledge that the government has taken some steps to address the issue—measures such as banning providers or agents from offering inducements or incentives to students, such as the free iPads which I mentioned; clearer information to ensure students understand the impact of taking out a VET FEE-HELP loan; cooling-off periods to apply before a loan takes effect; and so on. These are all worthwhile and necessary changes, and we note they have received bipartisan support.

The point that we would make to the committee today is that governments need to go beyond measures to better regulate the contestable training market, important as they can be. Given the weight of evidence of the problems in the sector, what is required in our view is a fundamental rethink and reassessment of the contestable training market model. In our view, the market-driven approach is not working. It is not working in the interests of students, workers, employers, the wider economy or the Australian taxpayer. It needs to be overhauled.

There is a real question as to why for-profit providers are delivering vocational education that is receiving public funding. It is not a feature of the school system, but for some reason it is seen as acceptable in the vocational training system. That might be a debate for another day perhaps, but as a starting point in our submission we recommend the introduction of a 30 per cent cap on the amount of public funding that is contestable. That is the position which was endorsed by the recent ACTU Congress. It is a policy which would give appropriate recognition and support for the critical role of TAFE and provide a break on the unsustainable and counterproductive size and growth of the private training market.

I will finish on this point: we note that at the recent National TAFE Day celebrations the Labor opposition announced that it would commit in government to having a guaranteed portion of government funding for vocational education set aside for TAFE and to look at rebalancing the contestable funding model. It is a commitment which we welcome, and we note that there are some moves in that direction in some of the states as well. We look forward to similar commitments from the government and to the work that this committee can do in building a case for these sorts of changes. I will leave it there, but my colleagues may have some further points to add. Thank you.

ACTING CHAIR: Does anyone else have a short statement?

Ms Duggan : I would like to supplement Tim's statement. I would like to start by highlighting some of the positives of the system. The CFMEU in Victoria became a registered training organisation more than 20 years ago, and our other branches followed with some form of training provision over those decades. That was soon follow by employers. There was established in Victoria in particular but across the other states an industry-driven private training provision. Twenty odd years later we have state-of-the-art facilities in high-risk work, occupational health and safety and trade training. The plumbing have a climate change centre and leadership centres. Some are run by the employer associations, some are run by the unions and some are jointly run. Each of these training centres is based on a proper analysis and identification of industry needs. They are informed by industry policy and, in turn, industry policy is informed by the findings of being so closely aligned with and working within the national training system. I guess it means for us that there are no quickie courses. There are no dodgy simulations. Rather, what we have is really highly qualified and experienced teachers, trainers and administrators. We have real plant and equipment. We have training and assessment strategies that are based on an analysis of the requirements and in the competencies and backgrounds of the students and what their learning needs might be.

Our work is made incredibly difficult by poor quality training providers. The strategy that they seem to be using is to compete on hours. A case in point is the white card. The white card is the industry induction, which is a compulsory induction in occupational health and safety before someone conducts any productive work on a construction site. The origins of the white card—at that time it was called a red card—in Victoria came after a spate of fatalities, including the death of a teenager on his first day at work. Employers and unions got together and made an agreement; it was not even legislated at that time. It was an agreement to introduce training—one-day, face-to-face training—in occupational health and safety before anyone new to the industry entered a construction site to do productive work. I think we feel that it was extremely successful and it went on for a long time. I also think we feel that that agenda has been hijacked by some of the private training providers, particularly those who have taken this to an online situation. Obviously, it does not focus on skills and it does not focus on active learning, which has reduced significantly the number of hours. ASQA has done quite a significant report in that area. Similar situations can then be found in the high-risk work licences. I will not take long. I have only a couple of little points to make.

ACTING CHAIR: You are all right. I know that senators are keen to ask questions.

Ms Duggan : I just want to make the points about high-risk work licensing, which is about things like scaffolding, dogging and rigging. Any search of the website will show you that these courses are being run very quickly. I give the example of basic scaffolding. It has 129 assessment questions, of which the students must do 84. It has maths questions. It has 12 practical tasks, which include the erection of three scaffolds. It takes us one day just to do the assessment. The learning that is required to get people to that level is much more significant than that, but if you look on website you will see people offering that for three to four sessions. These are the work platforms that people work from on sites. The sum total of all of this is, I believe, a lack of confidence in the system and a really blatant misuse of resources. So you have poor skills, you got poor occupational health and safety practice but you also have employers just not trusting the qualifications that are coming through. What has emerged is what is called a verification of competencies. When someone goes to get a job on a site they are asked to have their qualifications reassessed. So you have this parallel system, which is unregulated, of assessments, of checking people's qualifications, because employers do not have confidence in the system. It is a bit of a gravy train.

I have only two more points to make. TAFEs are in a bit of a downward spiral because they cannot compete either. ASQA has put in some good strategic audits that give us some guidelines on where we need to go. Our experience has been that we are better regulated and our providers that have clear links to industry have produced better quality outcomes.

Senator KIM CARR: Thank you all for coming. You have direct practical industrial experience of what is actually happening, and I think that is of immense value to the committee's work. I have read your submission. My first question is about the matter of quality and the consequences of poor quality industrial training. Ms Duggan, you have drawn our attention to the white card issue and your submission also goes to that, but it is not just the union's direct experience here. The submission points to ASQA's investigation, which found that 12 RTOs delivered the bulk of the white card training, some of which was undertaken in as little as 30 minutes, and that 75 per cent of the training providers were found not to be compliant. Your submission goes to the situation in nursing. Eighty per cent of the providers were found to be noncompliant by ASQA for nursing aged care. In asbestos removal, there is a similar sort of pattern. My point to you is: what is the consequence of having people who are not qualified on the job, not just in construction but in community services, health facilities and the like? What is your direct experience of the consequences of having people who have bodgie qualifications on the job?

Mr Curry : If I might, Senator, from a manufacturing industry point of view, and it is an area of particular interest, we worry deeply that the people who are building our bridges, our submarines—hopefully our submarines—and our ships have the skills that are required to produce a product that is sustainable and that will drive the Australian economy. Of course, what we are starting to see with the raft of private providers, the for-profit providers, rolling into the system and chasing public funding is those standards slipping. An example of that was drawn to my attention fairly recently. It concerned a public forum in Whyalla that was conducted by what turned out to be a training broker operating on behalf of, I think, five registered training organisations. One of the courses they were advertising was MEM50105, which is a legitimate national course code. This course was entitled 'Diploma of Engineering—Non-trade'. There is no such course title in the national register of VET. The correct course title is 'Diploma of Engineering—Advanced Trade'. I submit that there is a fair bit of difference between the language of 'non-trade' and 'advanced trade'. That course is on the market on a 'study now, pay later' basis, for $19,990. It references career opportunities as trades assistant, amongst others. This embeds a full trade qualification—it could be in a number of trades—but nests a full-trade qualification and not a non-trade qualification. This would prevent n person from getting an apprenticeship, because it is a qualification well beyond the level of a trade qualification. I have here the full-page marketing—very flash marketing. The person who does this will do it in 12 months, rather than through a training contract arrangement that might give them the skills and practical experience to do the work the economy needs us to be doing.

Setting aside the very significant problems that would arise in terms of the safety of work that might be done in this context, just from an economic point of view it makes no sense. There is no public good created from training people who thereafter cannot put their skills to work in the economy, and it would effectively rule them out from employment in the area the training provider is purporting to train them in. So the consequences are significant.

Senator KIM CARR: Would anyone else like to say something about their particular industry?

Mr Burgess : I will, thank you. In the electrical trades area, our industry is a particularly high-risk trade, as everyone would know. Electricity: you cannot see it, you cannot hear it, you cannot touch it and you cannot smell it. It is a hidden risk, and if there are poor quality training outcomes of certain RTOs that is a major concern for us in our industry, not only for workers' health and safety but also for the community risks and costs, and it could endanger lives. That would be our main concern in that area.

Mr Shipstone : In other sectors, as well. At the hearing today we do not have unions representing workers in the child care and aged care sectors, but we refer to those sectors in our submission. There are obvious safety concerns in the aged care sector and a need to ensure people are properly trained and know how to administer and diagnose properly in hospitals and in aged care facilities. There are obvious safety issues there—just in terms of confidence, as well, for both aged care and child care. Virtually every Australian has either elderly parents in an aged care facility or their children in child care, and there needs to be confidence that people working in those sectors are actually able to do the work the qualification says they can do. At the moment that confidence is not there. There is a reference in our submission to the secretary of the child care union, United Voice, who indicates that it is that bad in the sector at the moment that there are providers who have been blacklisted, because they do not have any confidence in the graduates who are coming out of those particular private training providers.

Senator KIM CARR: The point your submission draws our attention to is this tendency towards the reduction in the number of hours. I have been interested in and active in this area for a long time now. There was this initial argument about the need for flexibility in traditional apprenticeship training. In the interests of flexibility, all sorts of deregulation was introduced. But ASQA is now pointing to the problem whereby a number of providers are allegedly providing training at much reduced rates. What is your view about the issue of the shortening of the qualifications period for the undertaking of training? Do you have an assessment of that?

Mr Shipstone : In many cases, Senator, the courses have been delivered in what we see as unrealistically short time frames. The problem is, again, that the people who are doing this training are not getting the training that they have signed up for. In many cases, if it is being delivered, say, through the VET FEE-HELP scheme, they have signed up to a debt under the VET FEE-HELP scheme and they are not getting the training that they have signed up to. So they have been short-changed, essentially. We do say in our submission that there needs to be more rigour around the volume of learning.

Senator KIM CARR: There has been an experience directly in Victoria, which I know many of you are familiar with, about the question of poor-quality trainers—that people are not qualified to actually undertake the training and that certificates or credentials are being issued which have now had to be withdrawn. Are you able to comment on that experience in terms of the training review in Victoria and the fact that, I think, around 7,000 of those qualifications have had to be withdrawn? Do you have any view about that matter?

Mr Shipstone : Again, it is a real concern that those qualifications have been issued in the first place. The fact they have now been withdrawn shows that there are obvious quality issues there. There is an issue about the students, who should be at the centre of this at least, who have signed up to courses in good faith at what they thought was a reputable provider. It may have been their first experience in vocational education and training. In some cases, they may have been people who did not do so well at school and are giving vocational training a go. They may have been attracted by advertising, marketing, zero up-front fees, study now, pay later and all sorts of promises about the outcomes that will flow from their training. And then in the end, they have been given a qualification which has little or no value to them at all. It has no value if it has been withdrawn, obviously. So our real concern, I guess, is where that leaves the poor students themselves. They have undertaken that training and that may affect their future view of the training they would like to go into.

Senator KIM CARR: In fact, there are regulations that prevent the payment of subsidies for people that have undertaken coursework, which they may not have actually received, but they are then denied access to other legitimate programs. That is the case, is it not?

Mr Shipstone : If you are referring to the entitlement funding system, if it is a once-only entitlement and they have signed up to that entitlement then essentially, in those cases, they have wasted that entitlement.

Senator KIM CARR: Can I turn to the issue of fees that are charged and the relationship between the operations of VET FEE-HELP. Your submission, on page 15, points to:

Standard fees for diplomas tripled … when loans were introduced … from mid-2009.

Is that an experience that you have noticed across the country or is it confined to one particular locality?

Mr Curry : In our experience, it is something that is across the country. We are seeing more of the programs like the one I cited earlier to you, Senator, where qualifications are nested. Generally speaking, trade qualifications are subsidised by states, territories and the Commonwealth and you would not see $20,000 programs for trade apprenticeships. But when you nest those qualifications into a trade diploma you can charge, effectively, what you like. I think the lifetime cap is around $95,000 or something of that order. So this, in many respects, could be seen as a device to access a market where you can promote trade qualifications but not actually deliver a competent tradesperson at the end of the day. The VET sector's job is the production of skilled people who are capable of working in the economy, in my submission at least. We are not producing that through unrealistically short program delivery, a focus on training rather than competence and ticking the boxes for the purposes of getting through process audits, as has been the case for some years. We do welcome the tightening up of some of that regulatory environment, but we have got a ways to go yet.

Senator KIM CARR: It has been put that the situation in Victoria is more acute because the contestability argument is more advanced. In your experience, are the problems that have been identified in Victoria confined to Victoria or is there evidence that these are national problems?

Mr Curry : Certainly in my home state the problem has been exacerbated. We may well have finetuned the poor experience that was exhibited in Victoria. We have done exactly the same thing in exactly the same way and are apparently shattered that the result is not different.

Senator KIM CARR: For the purpose of the Hansard, what is your home state?

Mr Curry : South Australia. The Skills for All experiment has failed. The government, to its credit, has recognised that and taken steps to adjust its policy settings. But the damage has been done. An enormous proportion of the budget that should have gone for six years was gone on in less than half that time and we are now left with a substantially reduced capacity to build skills in a state that is struggling. In employment terms, it is hosting the prospect of losing the Holden plant and there is the uncertainty around submarine building and shipbuilding. That is all contributing to a lack of confidence. If you take away the capacity to change people's lives through a well-functioning, well-resourced TAFE sector, you are just putting another stake through the heart of any potential growth in confidence.

Senator KIM CARR: Would any other witnesses like to comment on the extent of this unethical behaviour? Is it confined just to Victoria or, in your experience, are there broader problems across the country?

Mr Shipstone : It has certainly been the most advanced in Victoria, but our submission is that the examples we are talking about are found across the country. Those examples we were talking about of predatory marketing behaviour and targeting vulnerable students at Centrelink offices, in campgrounds and in lower socioeconomic areas can be found across the country. While it is most advanced in Victoria—and there has been a real failure to learn from the experience in Victoria—the same issues have spread. The same policy settings are in place around VET FEE-HELP, entitlement funding and contestability. With further moves to open up the training market in a contestable way, the problems will extend.

ACTING CHAIR: Is the ACTU an RTO or are all your members RTOs?

Mr Shipstone : I would have to take that on notice. I will check.

ACTING CHAIR: Ms Duggan, you might be able to help me on this question. More broadly, perhaps you could take it on notice, Mr Shipstone. How many of your students use the VET FEE-HELP scheme?

Ms Duggan : None of our students.

Senator KIM CARR: Why not?

Ms Duggan : Probably because of the qualifications that we deliver.

ACTING CHAIR: Could you just flesh that out.

Ms Duggan : We deliver to workers mainly within the classifications of the award up to 'trade'. An arrangement we have in Victoria in our industry is that the RTOs of employer associations tend to look after the higher levels. We do go up to a diploma, but we have industry arrangements that fund our training. Most of our training is funded through industry arrangements.

ACTING CHAIR: I would have assumed that you would have a mix of funding for students depending on their personal circumstances.

Ms Duggan : A lot of our students have a difficulty with being eligible for state funding, so we have had to find other ways of providing our students with training. So the industry has worked—

ACTING CHAIR: So it is subsidised by industry, not by government?

Ms Duggan : Yes.

ACTING CHAIR: Mr Shipstone, can you take on notice the other RTOs that sit under the ACTU and whether that is a standard way the RTOs are funded or not.

Mr Shipstone : I will.

ACTING CHAIR: To study with the RTOs, do they have to be a member of a union or can anyone off the street do it?

Ms Duggan : We are a public-private provider, so anyone who asks to do a course is eligible.

ACTING CHAIR: And there is no discount for union members?

Ms Duggan : It is funded through the industry, so if they are part of the industry and part of that funding arrangement, which is done through an industry trust, then they receive the industry subsidy. If they are not in commercial construction—for example, someone who is coming from a different industry—then there would be a full fee.

ACTING CHAIR: What is the full fee?

Ms Duggan : It would depend on the course.

ACTING CHAIR: Could you give us a range.

Ms Duggan : Our white card is $150.

ACTING CHAIR: How long does a white card take to get?

Ms Duggan : A full day.

ACTING CHAIR: Mr Burgess, did you say your union runs an RTO?

Mr Burgess : We do not have our own RTOs, no. We are affiliated with joint people on boards and with employer associations as well, but we do not have our own.

ACTING CHAIR: Could you give me another example of a qualification. Do you have a qualification that is more than a day?

Ms Duggan : Yes.

ACTING CHAIR: Give me the other end, then.

Ms Duggan : I suppose most of the qualifications, if we were looking at a ballpark figure, would average about $100 to $150 a day, depending on the length of the course.

ACTING CHAIR: What is your longest course?

Ms Duggan : We have a diploma.

ACTING CHAIR: How long does a diploma take to get?

Ms Duggan : Off the top of my head, about 40 days of face-to-face training.

ACTING CHAIR: So about six grand.

Ms Duggan : Yes, but you will then see what funding mechanisms we can then apply to that. We would then test to see if that person would be eligible for the Victorian government subsidy. We would see if there were any other forms. They might be able to get some language and literacy support. That is done after an interview with the student and an assessment of their learning needs and what is available to them. Some people are eligible for nothing and some people are eligible for the whole thing.

ACTING CHAIR: I just want to ask a quick question about the 30 per cent of public funding and your recommendation about contestability. Under the previous government, when the whole notion of contestability was brought into this sector, national partnership agreements were signed by the Prime Minister at the time. I think it was Prime Minister Gillard; I cannot be sure during that period. I will have to get the dates.

Senator SINODINOS: Maybe it was Kevin.

ACTING CHAIR: I do not know. Let's not go there, Senator Sinodinos. It has been a good day. But I am just wondering if the ACTU and its member organisations made your concerns about the contestability—

Senator KIM CARR: The answer is yes.

ACTING CHAIR: Excuse me, Senator Carr.

Senator KIM CARR: It is just that I know so much about it.

ACTING CHAIR: I do not know if your preselection is completed yet or not, but I am asking questions of the witnesses.

Senator KIM CARR: You are the one with a preselection problem.

ACTING CHAIR: You really do not need to speak for the ACTU, Senator Carr. They are quite capable of speaking for themselves, and I think you should give them that opportunity. Did you make those concerns clear to the previous government?

Mr Shipstone : Yes, I can confirm that the answer is yes. We have made countless submissions on this point. Our position has been consistent on our concerns with contestability.

ACTING CHAIR: So basically what you are saying is that the previous government ignored the ACTU's recommendations about contestability in the vocational education and training sector.

Mr Shipstone : We put our submissions in, and the government made its decisions.

ACTING CHAIR: So the previous government ignored your advice.

Mr Shipstone : I am not aware of whether they ignored the advice or considered it or how you would characterise that.

ACTING CHAIR: You can see the national partnership agreement. There is your advice. There is the national partnership agreement, signed by a Labor Prime Minister. You have a problem with the outcome of the national partnership agreement—yes?

Mr Shipstone : Yes.

ACTING CHAIR: Yes, it is in contradiction to the advice of the ACTU, the peak body representing workers in this country.

Mr Shipstone : Yes, I made that clear. We made a number of submissions on that point.

ACTING CHAIR: It would seem to me that the previous government ignored the ACTU's advice.

Mr Shipstone : It may be the case. There are plenty of examples where Labor governments do not follow the same path the unions necessarily would, so there is no great surprise in it I guess.

Senator RHIANNON: That does not fit in with their scenario.

ACTING CHAIR: No, I am just saying: peak bodies that decide people's preselections, maybe you need to be having a few more conversations around that. This period of time is probably a good time to do that. I will have more questions on RTOs—

Senator KIM CARR: How is your campaign in Indi going?

ACTING CHAIR: Senator Carr, please! Can we focus on the question before the committee and the terms of reference?

Senator KIM CARR: You are the chair; you should not be raising—

ACTING CHAIR: I am raising the issue of contestability, which I thought you were concerned about.

Senator KIM CARR: You are raising the issue of preselections, and I am asking you how yours is going.

ACTING CHAIR: I am raising the issue of the ACTU needing to be assured that its voice is properly heard by the Labor government that it assists in getting elected, and that is only fair. I would be pretty jacked off if I had spent—

Senator KIM CARR: I thought you'd just got a royal commission into this one?

ACTING CHAIR: an amount of time, effort and money in getting someone elected and they did not listen to me. I would be pretty jacked off and I think it is fair question. Anyway, we will move on, Mr Shipstone.

Mr Shipstone : I would note, as I did in my opening statement, that we certainly welcomed the recent announcement that Labor made about looking at rebalancing the contestable model.

ACTING CHAIR: And you did also acknowledge the current government's attempts to address the issue around the iPads, length of time—

Mr Shipstone : Yes; we say we need to go further, but we did acknowledge that.

ACTING CHAIR: Everybody wants quality education across the board. I think that is something we can all agree on, Senator Carr. I will have some more questions once I get your responses to my issues around RTOs, but that will be through the on notice process.

Senator SINODINOS: I just wanted to follow up on a couple of things. In response to some earlier questions, you talked about this issue of the qualifications that people are receiving through private providers. My question is: if someone gets a qualification through a private provider, let us say it was a building related qualification, and they turn up on a building site with that, who would vet whether that is an appropriate qualification?

Ms Duggan : Generally, I think it is the employer's responsibility to ensure that the people who come on to their site and work on their site are competent, so it is the employer who needs to be sure that that is a robust qualification and that that qualification and the competencies that it says they have is current. So the answer is the employer has the ultimate responsibility.

Senator SINODINOS: So they have the responsibility, whether it is building or whether it is nursing, as Senator Carr was referring to before.

Ms Duggan : I would think so, yes; I think that is what the health and safety act would put on to the employer.

Senator SINODINOS: So in the case of nursing, for example, it would be either the public hospital provider or the private provider—whoever employed the nurses. Is that right?

Ms Duggan : That is my understanding.

Senator SINODINOS: From your perspective as a union, do you vet the qualifications of people who come on site? Do you have any say in that process? How does it work? You are saying it is just employers?

Ms Duggan : As a private provider, no, we do not vet the qualifications of people who go on site.

Mr Curry : Senator, at least at one level I would think that manufacturing workers would be very keen to know that the person who is working next to them is competent and we use qualifications as a proxy for that sort of guarantee that the person is capable of doing what they have been trained to do. From a safety point of view, our members certainly would be very interested to ensure that the qualifications people turn up with are real and that the capability they are meant to have exists and can be exercised safely, but we do not have a responsibility for that and nor do we have any control over it. Our members are concerned, and they will often inquire, about the qualifications held by a person. I imagine that will be happening at an increasing level as confidence in this sort of proxy for quality is further damaged.

Ms Duggan : If I could just supplement that answer: the appropriate avenue for that recommendation would be your health and safety rep on the site. They would be someone who would probably advise an employer if they had concerns about what was happening at the site level.

Senator SINODINOS: This is probably not something that you can answer, but it is prompted by what you said: the health and safety legislation in various states—does that lay down requirements in this respect?

Ms Duggan : It has a provision under the duty of care to ensure there is adequate instruction and training for people who carry out tasks.

Mr Curry : And the manufacturing modern award has a provision in it that only allows employers to direct employees to carry out duties that are within the limits of their skills, competence, training et cetera. Everyone has some level of responsibility from a safety point of view, but I think, ultimately, it is the employer who has to vet the quality of the qualification—and having to take that extra step of questioning what is behind that qualification is in itself a very damaging thing for the reputation of Australia's VET sector, which is internationally renowned.

Senator SINODINOS: In relation to TAFE, you talked about this capping arrangement, to cap the contestable part of the market for 30 per cent—is that right?—which would leave 70 per cent to TAFE. Is that the way it would work in practice?

Mr Shipstone : Yes, that is correct.

Senator SINODINOS: My perception of TAFE over the years, and it is very much an outside perspective because I have not been involved in the system—this is going back 20 or 30 years—is that it has often been the poor cousin when it comes to funding.

Mr Shipstone : Yes, that is right.

Senator SINODINOS: Facilities have been run down, the teachers have not always been the best, with respect, and everything else. The issue that comes into this is: let's say we had a cap; how could you guarantee that the funding to the TAFE sector would be appropriate to do the job that I think you are saying it should be doing?

Mr Shipstone : That is right. Regarding TAFE's position, there are two issues. One is, as you mentioned, the declining funding that the VET sector gets. There is a great graph—I do not think it is in our written submission—that shows the difference in funding between the four sectors: schools, university, early childhood and VET. VET goes down and all the other sectors go up over the last 10 or 15 years. I think that graph is in the AEU submission. So there is that issue, but then, with the funding pool that is available, TAFE is getting a declining share of that funding. Clearly, we would argue that both those issues need to be addressed.

Senator SINODINOS: But, if you are a student, don't you get VET FEE-HELP if you go to a TAFE provider?

Mr Shipstone : Yes, it is available at TAFE institutes as well, though the evidence shows that most of the VET FEE-HELP funding—I think 75 per cent—has gone to the private providers.

Senator SINODINOS: What I am concerned about here is: if we are saying TAFE should be given, in effect, a more privileged position by having a guaranteed share of the market, how do you make sure that TAFE operates as efficiently, as effectively and as proactively as possible to deliver what we are talking about? The whole idea, I think, around contestability is competitive tension to try and get the best out of everybody in the market, and it has led to more funds coming into the market. That is my concern. If we go down this route and recommend this, how can we guarantee that the TAFE providers will be in the best position to maximise the opportunities?

Mr Curry : The alternative is that we will lose the TAFE sector in a race to the bottom that they are going to lose. The consolidation of TAFE as a public provider creating a public good is what underpins the notion that it needs to be defended. What we have now is it being caught up in the competitive tension that you refer to between private providers that are carving up public money at a rate of knots. We are not getting what we pay for as taxpayers and the public good of having a skilled workforce is something that is worth defending. The best place to do that would be the organisations that are controlled and able to be influenced directly by governments.

Senator SINODINOS: I am not sure governments, in all their wisdom, are the best people to correct anything—

ACTING CHAIR: I think that work sometimes but not others.

Senator SINODINOS: but I understand what you are saying. I am just saying that I think TAFE would need to change in the way they operate as well—

Mr Curry : and I think the states are taking that on.

Senator SINODINOS: because they are not coming across as a really effective, nimble, efficient supplier.

ACTING CHAIR: In all markets.

Senator SINODINOS: I am meant to be asking questions, but—

ACTING CHAIR: And I know Senator Rhiannon has some questions.

Senator RHIANNON: Chair, I do not have much time.

Senator SINODINOS: I will finish on this point. It strikes me that, actually, this area provides an opportunity for unions to do more as training providers—that is my impression.

Senator RHIANNON: That is an extraordinary statement considering what you are doing with the royal commission and trying to get rid of the unions—coming from Senator Sinodinos after all that!

Senator SINODINOS: We love unions!

Senator RHIANNON: Anyway, could I have my question. Thank you very much for your submission and for your evidence today. I have a question about your second recommendation, because the recommendations are very useful for us. Why did you settle on the 30 per cent cap? I am conscious that I am short of time. In the second part of that second recommendation, you talk about 'a guarantee that contestable funding will not go to poor-quality providers'. Do you have any suggestion on how that is defined? So one question is on the 30 per cent and one is on the poor-quality providers.

Mr Shipstone : The 30 per cent cap is a position which has been developed in large part by the AEU, and I know they are appearing later today. The thinking behind the 30 per cent cap is that at the moment the share of contestable funding, I think, is around 43 per cent, but that is skewed in large part by the fact that Victoria and South Australia are far more advanced, with around 70 to 80 per cent of funding that is contestable. If you take them out of it, most of the other jurisdictions are somewhere around that 20 or 30 per cent figure. I think that is some of the thinking behind the 30 per cent cap.

In terms of the second part of the question, about a guarantee, I guess it is a position of principle, to start with, that clearly contestable funding should not go to poor-quality providers. It should be based on the record of those providers. It just appears to us at the moment that the funding seems to go equally to poor providers and to the more reputable providers, and it is damaging the reputation of all those quality providers within a system that public funding also goes to the poor providers in the market.

Senator RHIANNON: Thank you. This is for all of you: I was interested in any complaints that you get from your members. We had some interesting evidence this morning from the Redfern Legal Centre that providers and agents were targeting people in public housing in particular and possibly people at Centrelink offices as well, which was very disturbing. I just wondered if the issue of complaints from your members is something that comes up for you and if you have had to deal with any with regard to private providers.

Mr Curry : We do get complaints from members. We get complaints from apprentices. We have just concluded a survey attempting to capture that data. We are just in the process of collating that data. So I could not give you examples of specifics, but we get a number of complaints about people who variously are not released for training or are released for training and turn up for the training to find that the equipment to learn on is not available and things like that. There is the speed with which some training is delivered. But we would probably be in a better position to address that question in coming weeks, when we have collated the rest of our data.

Senator RHIANNON: So you could provide that to us then.

Mr Curry : I think we could, yes, and I am sure there will be useful data amongst that.

Senator RHIANNON: Thanks.

Ms Duggan : We have anecdotal evidence of areas; I am just trying to think of a couple of examples. One example was of a person going onto a work site with a dogging ticket, which is to dog a crane—to give directions to a crane operator. They had their ticket, but they had got their ticket without actually having a crane to dog. When they were asked to do that work and they did not feel confident when they realised what it involved, they were disciplined by the employer for not being able to carry out that work. We have had examples where people—

Senator RHIANNON: Can I just understand that. So they arrive at the job. They have a ticket apparently to do the job.

Ms Duggan : Yes.

Senator RHIANNON: They do not feel confident to do the job, and they say something, and then they are penalised.

Ms Duggan : I have an example of that, yes. I have had an example of a worker coming voluntarily to us and asking if they can do one of our high-risk courses because, again, they did not feel confident in the skills that they had. So they have repeated a course that they already had a ticket for. When we were doing some interviews for our recent intake of pre-apprenticeship, we had people that were ineligible. One student had a diploma in building, and he really could not answer the very basic health and safety questions that we had for pre-apprenticeship, which is at a certificate II level. So there are those sorts of examples that we frequently get.

Senator RHIANNON: We are talking about serious safety issues here, with cranes et cetera.

Ms Duggan : Absolutely.

Senator RHIANNON: So, if you were not providing that training or the union were not there providing this alternative, we could have some very serious situations developing: people either doing work that they are not equipped to do or just leaving the job because they are worried about their own safety.

Ms Duggan : It is a significant issue, and the longer this goes on and the more entrenched it becomes in our training system the more we will have an absence of people with the skills and the formal background to be able to pass skills on. Senator Carr asked the question about the effects at the work site. It is not just health and safety, although that is paramount. There are fatalities and serious injuries, but there is also silly waste of plant and equipment. People turn scissor lifts over because they have not had the proper training in how to operate them, and it just goes on. It is a real multiplier effect in terms of the consequences of poor-quality training.

Senator RHIANNON: Mr Burgess?

Mr Burgess : Yes, we do have examples of complaints from our members, but unfortunately it is not only with private RTOs; there are also instances where TAFE funding has been cut. In New South Wales, down in the Wollongong area, courses which used to run face-to-face time over 1,000 hours have been reduced by around 25 per cent in the face-to-face time of their off-the-job training component, so they are not getting the same quality of outcomes because of that.

Senator RHIANNON: Do you mean that because TAFE are not able to give the full course—it is a truncated course—your members or electricians are coming up to the job with inadequate training?

Mr Burgess : It is going to go down that path, yes. They are delivering the same course but with 200 hours less face-to-face time.

Senator RHIANNON: Two hundred hours less time?

Mr Burgess : Up to that, yes. So you are not going to get the same—

Senator RHIANNON: What is the number of hours in the full course?

Mr Burgess : It was 1,040, I think from memory.

Senator RHIANNON: That is significant.

Mr Burgess : It has gone down to about 800. With that amount of face-to-face time, you literally cannot get through the qualification in such a way as to take it all in and have the quality off-the-job training component.

ACTING CHAIR: I have a few questions too, but I will put them on notice. In terms of the industry agreements that you have, I am still struggling with the VET FEE-HELP assistance for your diploma students. Could I just get an understanding of that. Do you have an example of the industry agreement or how that relationship works, on notice?

Ms Duggan : We are not a VET FEE-HELP provider.

ACTING CHAIR: Yes, but could you just provide that on notice. Thank you very much for your time.

Proceedings suspended from 13:02 to 14:00