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Vocational Education and Training Funding Amendment Bill 1999



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Bills Digest No. 5 1999-2000

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Vocational Education and Training Funding Amendment Bill 1999

Warning:

This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any o fficial legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Contents

 

Passage History

Vocational Education and Training Funding Amendment Bill 1999

Date Introduced:  30 June 1999

House:  House of Representatives

Portfolio:  Education, Training and Youth Affairs

Commencement:  Royal Assent or the day on which Schedule 2 to the Australian National Training Authority Amendment Act 1999 commences, whichever is the later.

Purpose

The amendments proposed by the Bill:

  • supplement 1999 funding for vocational education and training provided to the Australian National Training Authority (ANTA) for distribution to the States and Territories, in line with real price movements; and
  • appropriate vocational education and training funding for the year 2000.

Background

Commonwealth role in the provision and support of vocational education and training (VET)

The Commonwealth provides grants to the States and Territories for the provision and support of vocational educati on and training primarily to the Technical and Further Education system. Approximately one third of public expenditure on the VET sector comes from the Commonwealth government. Arrangements first established under the Vocational Education and Training Funding Act 1992, provide for a single pool of funds comprising the previously separate recurrent expenditure grants and capital expenditure grants to be passed to the Australian National Training Authority (ANTA) for allocation among the States and Territories.(1)

The functions of ANTA include allocating and remitting funding to State and Territory training agencies on the basis of guidelines determined by the Ministerial Council, and administering any programs, agreed by the Ministerial Council as requiring national delivery, within the guidelines approved by the Ministerial Council.

Funding arrangements under the ANTA Agreement

The Australian National Training Authority Act 1992 gave effect to the ANTA agreement, announced by the then Prime Minister on 21 July 1992, between the Commonwealth, States and Territories for the establishment of ANTA. Under the agreement, funding arrangements were made for the 1993-95 triennium. These included the Commonwealth's agreement to maintain its then current financial support for VET; provide an injection of $100 million in recurrent funding provided in the November 1991 One Nation economic statement; and an additional $70 million of growth funding for each year of the triennium. These arrangements were subsequently extended to 1996 and 1997 by the then Labor government.

In the 1996-97 Budget the new Coalition government introduced an efficiency dividend on Commonwealth own-purpose outlays which resulted in a 5% reduction of funding provided to ANTA. In addition, the 5% real growth on base recurrent funding was discontinued.

In its 1997-98 Budget the Commonwealth reduced annual funding to the States and Territories appropriated under the Vocational Education and Training Funding Act 1992 , to provide 'an incentive to the States to achieve efficiency gains in their VET operations'.(2) The reduction, which took effect from 1 January 1998 and was to be carried into subsequent years, was estimated to be approximately $20 million in the 1998 calendar year.

Negotiations for a revised ANTA Agreement took place in 1997.(3) In April 1998 Commonwealth, State and Territory vocational education and training Ministers reached consensus on a three-year funding agreement. Under the revised ANTA Agreement, the Commonwealth is committed to maintain current 1998 funding in real terms ($904.144 million in 1998) for the three years 1998 to 2000. The States and Territories agreed to maintain their level of activities, and to the principle of growth through efficiencies. The revised Agreement therefore locked in the reduction in annual funding announced in the 1997-98 Budget.

Consistent with the Commonwealth's commitment under the revised agreement to maintain real funding in 1998 terms, the current Bill provides supplementation for the 1999 appropriation in accordance with real price movements reflected in Treasury indices, and makes provision for base funding for the year 2000.

Main Provisions

The effect of Item 1 of Schedule 1 is to amend the amounts payable to ANTA under section 9 of the Vocational Education and Training Funding Act 1992 in the following manner:

  • increasing the amount payable for 1999 from $904.144 million to $918.352 million; and
  • providing for base funding appropriation for the year 2000 of $918.352 million.

Endnotes

1.For a brief outline of arrangements prior to this see Ireland, Ia n and Kempner, Carol, 'Vocational Education and Training Funding Amendment Bill 1996', Bills Digest No. 34 , Department of the Parliamentary Library, 1996-97.

2.Budget paper No. 2, 1997-98, p.40.

3.For further background on the revised ANTA Agreement see Bell, Rosemary and Kempner, Carol, 'Australian National Training Authority Amendment Bill 1998', Bills Digest No. 35 , Department of the Parliamentary Library, 1998-99.

Contact Officer

Carol Kempner

20 July 1999

Bills Digest Service

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