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Education and Employment Legislation Committee
23/10/2019
Estimates
EMPLOYMENT, SKILLS, SMALL AND FAMILY BUSINESS
Australian Skills Quality Authority

Australian Skills Quality Authority

[12:38]

CHAIR: I now call representative from the Australian Skills Quality Authority. I welcome Ms Rice, Acting Chief Commissioner and CEO. Ms Rice, do you wish to make an opening statement?

Ms Rice : No, thank you, Chair. I'm happy to go straight to questions.

CHAIR: Okay. I will hand over to Senator Pratt.

Senator PRATT: Thank you, Chair. Ms Rice, you put out a media statement this month, on 14 October, around internal challenges in relation to the timeliness of ASQA and perceptions of consistency in the regulator's decisions. In that context, how important is a comprehensive regulatory compliance and education framework in preventing shonky operators from ripping off students?

Ms Rice : We certainly welcome the opportunity to provide a more sophisticated educative program in relation to ASQA's compliance expectations. We do already provide a significant educative program, which relates to a number of things—fact sheets and webinars. We recently also completed a significant program of provider briefings around all of the states and territories. But we are certainly very well aware of calls across the sector for ASQA to do more in that space, and we certainly welcome the opportunity to do so. We welcome the recent expectations outlined by skills ministers that will certainly see us take on more of a sophisticated educative program. We're looking at working with skills ministers around the mechanisms for doing so in the current period. I note the recent reviews of our legislation by Professor Valerie Braithwaite and also comments and recommendations made by the review by Steven Joyce. They are also very consistent with the feedback that ASQA has received around what's being asked of us. We have a number of updates to our current educative program that are currently in train around a new series of webinars and those sorts of things. We certainly welcome the opportunity to include those as very much the next evolution in our regulatory activities.

Senator PRATT: In terms of the downside of what appears to be a less stringent approach to regulation, audit and compliance in the sector, how do we focus on preventing shonky operators from ripping off students?

Ms Rice : We obviously have our regulatory activity. In recent years we have implemented a risk based approach to regulation. We comprehensively consider a range of risk factors to identify where to target our regulatory focus. We've been very transparent about that regulatory focus. Each year we provide a regulatory strategy where we outline exactly where our areas of focus will be. This year in particular we will be continuing to focus on the areas of international education. We've flagged an area of interest in relation to vocational education and training in schools. We outline a series of qualifications that we are particularly concerned about and keen to focus on. In this year's regulatory strategy we've also outlined a series of standards that of greatest concern and areas for ASQA to focus on when we conduct our regulatory activity. In the last financial year we undertook I think 1,685 audits. More than 600 of those were compliance audits. That's typically where we are applying our risk indicators and ensuring that we're able to undertake the necessary regulatory activity.

Senator PRATT: Does ASQA feel that it's adequately and comprehensively supported by the government in undertaking this regulatory role?

Ms Rice : I would note that in the budget statements of last year it was announced that ASQA was to have an additional budget funding component that was to take effect from 1 July last year. We have certainly been undertaking the activities associated with that additional funding. It has equally seen an increase in the number of compliance audits that we've undertaken to ensure that we are adequately addressing issues that we've identified in the sector.

Senator PRATT: Do you acknowledge that there are inefficiencies or inconsistencies in your regulatory processes or that there is a culture problem at the regulator?

Ms Rice : We have been very transparent in acknowledging challenges that we face in relation to things like timeliness. In relation to consistency, I think that is something that I would expect all regulators would say is a challenge. However, in order to address that challenge, we have significant internal processes to ensure that, as best as possible, we are absolutely ensuring consistency in our decision-making. I might defer to Mr Garner in relation to how a range of them operate at an operational level. There's no doubt that we face challenges, but I think overall we are very transparent about them. We are absolutely working to address key aspects of them. From a consistency point of view, there are a range of internal checks and balances that we have around our decision-making processes. In terms of adverse decision-making, I'd particularly note that decisions about any key sanctions and particularly the major sanctions around cancellation and suspension are taken by commissioners. So, from that point of view, there's another check and balance in relation to the level of decision-making.

Mr Garner : Commissioner Rice spoke about some of the processes we have in the regulation space. There are a range of measures in place to ensure consistency to the best of our ability. As Commissioner Rice mentioned, consistency is always a challenge for regulators. We have very detailed procedural guidance and template materials to guide our regulatory officers in their work to make sure that they're examining and looking at things consistently. We have regular formal and informal moderation activities such as regular team meetings within each of our regulatory operations teams where people can discuss findings or new trends that they're seeing. We have more formal processes with our regulatory operations managers—the people who manage those teams across the country—where they bring together similar issues to make sure: Are we seeing new trends anywhere? How are we treating them? Are we all doing it the same way?

Senator PRATT: Ms Rice, we know that in July this year the member for Bowman informed the House of Representatives of his nationwide investigation into ASQA's performance in monitoring and regulating the training sector, and he held what he described as 'regulator reform forums' with training providers in each state and territory. He said:

… I know that for these trainers and providers there are enormous concerns about the shortcomings of ASQA.

How has ASQA responded to Mr Laming's investigation and how have your staff reacted?

Ms Rice : We certainly took on board the comments of Mr Laming. In a general sense I think we're very aware of concerns around the extent to which our decision-making might focus on administrative areas. We took a decision—I think from about 2017—to implement a student-centred audit approach that very much focuses on the stages or the phases of the student journey. It begins with marketing and recruitment and then enrolment and what have you. We understand that in the context of applying that regulatory model, while we intended having the standards very much aligned with those phases of the students in that audit approach, the administrative focus can actually begin at a marketing level. We understand that, in the context of the presentation of information back to providers through the audit process, it can very much appear that we might be focusing on administrative noncompliance.

Senator PRATT: Mr Laming, the member for Bowman, has gone through quite a politicised process, but that would be quite hard for you to manage. You have to be an even-handed regulator. Have you raised any concerns about his investigation with the minister? What's been the impact on staff when you've got a member of the government campaigning against the organisation?

Ms Rice : We've certainly taken on board the comments made by Mr Laming, as we always do whenever we receive feedback about our approach. What we've done with it internally is look at the areas that might have been reflected on in the comments that have been made. I'm sure Mr Garner will have some comments in relation to how we've tackled this at an operational level.

Senator PRATT: The concerns—and I haven't looked at them; they may or may not be valid concerns, and I'm not saying that they are or they aren't. But your job as a regulator is not to be swayed by populist debate one way or the other.

Ms Rice : I wouldn't say that we're being swayed. What we're taking on board is feedback in relation to the way that we undertake our role. To the extent that we were able to identify the particular matters that Mr Laming referred to and have been able to piece those together, we would have a different view about aspects of those particular matters. What we were taking on board from the comments that Mr Laming made was the general concern across the sector about—I think he referred to administrivia. That's where we were really looking to, I guess, identify what within our regulatory processes might be fuelling that. The former chief commissioner set about quite publicly in seeking examples of that administrivia so that we could actually take those on board and see the ways that we could address that internally to the extent that we are able to—I'd probably take you back to that educative role, the extent that we are able to better communicate with the sector about what those concerns are.

Senator PRATT: Senator Cash, do you as a minister support the member for Bowman's campaign?

Senator Cash: What campaign are you referring to?

Senator PRATT: He has announced his own nationwide investigation of the performance of ASQA's monitoring and regulating of the training sector.

Senator Cash: The backbenchers are entitled to their opinions. What I can take you through is what the government is doing in relation to ASQA's regulatory approach—in particular, post the Joyce review and the recommendations—

Senator PRATT: No, no, that—

Senator Cash: You've asked me a question and I'm now responding. I think the government is very focused on the importance of having a trusted—

Senator PRATT: My question was in relation to the member for Bowman, not in relation to the overall agenda here.

Senator Cash: But the comments that you have put actually go directly to the overall agenda that the government is already implementing post both the Braithwaite review and the Joyce review, and, in particular—

Senator PRATT: Why are you letting him run around with his own inquiry rather than feeding it into more formal processes?

Senator Cash: He is a backbencher. He is entitled to do as he does.

Senator PRATT: He's also the chair of the Standing Committee on Employment, Education and Training, and he's not pursuing those issues there.

Senator Cash: He is. As I've said, the government already has an approach that it is putting in place. I'm more than happy—because you asked me what the government is doing—to have Ms Williams take you through what the government's approach is, in particular given the recommendations coming out of the Joyce review. One of those recommendations, in summary—I don't have the actual recommendation in front of me—goes exactly to what Ms Rice has referred to, which is to take on a more educative approach. I'm more than happy for—

Senator PRATT: I didn't ask what the government is doing; I asked about the member for Bowman's campaign.

Senator Cash: I think I've responded to you in relation to the member for Bowman. He is a backbencher who is entitled to his opinion, as are all backbenchers. The government is implementing an approach in relation to ASQA and in particular post the recommendations coming out of the Joyce review.

Senator SHELDON: Senator, I just want to be clear: Mr Laming MP is the chair of the Standing Committee on Employment, Education and Training. He also went on to say:

From the highest levels, those who monitor the sector say it has become increasingly difficult to establish any form of rapport with ASQA. This stands in complete contrast to RTO relationships with New Zealand's regulator and Canada's regulator.

The reason we're asking these questions is that we're trying to work out whether Mr Laming MP is coordinating with the minister's office his concerns—obviously the concerns are serious. The investigation hasn't been completed. Is he coordinating with the minister's office?

Senator Cash: I don't, unfortunately, have Mr Laming's speech in front of me, so I will take your word that you are quoting to me correctly.

CHAIR: Could you perhaps table that, if that's the case, Senator? You don't need to do it now.

Senator Cash: Mr Laming has certainly raised concerns with the government, but, again, we actually have undertaken the Joyce review, which made a number of recommendations. Some of those recommendations were in relation to ASQA, and in particular that ASQA—to be fair to ASQA, they are an independent regulator. Certainly post VET FEE-HELP they had to go in and ensure that dodgy providers were found out and removed from the system. I think the government itself, and in particular the recent skills ministers meeting that I had, issued a communique. There are aspects of ASQA's regulatory approach that can and should be improved. The skills ministers themselves in the communique addressed this issue. Certainly the government is making it clear that they also do believe that a more educative approach should be taken.

Senator SHELDON: I appreciate the answer you've given, the outline you've given. The chair of this committee has raised some serious concerns. Are department or government resources being allocated to the member to actually carry out his investigation?

Senator Cash: Not that I am aware of. This is a backbench committee, my understanding is, that you are referring to?

Senator SHELDON: That's correct. His personal investigation—

Senator Cash: You're not talking about this committee as such; you're talking about a government backbench committee?

Senator SHELDON: Yes.

Senator Cash: The answer to that question is no.

Senator SHELDON: Is there any assistance going to the member for Bowman on his investigation?

Senator Cash: No.

Senator SHELDON: Towards ASQA: has the member for Bowman met or spoken with you or written a request to ask for information?

Ms Rice : No.

Senator SHELDON: Are you aware of the comments from the member for Bowman?

Ms Rice : I'm certainly aware of the speech that was made in the House, yes.

Senator SHELDON: So you became aware when the speech was given or shortly after? What date was that?

Ms Rice : Shortly after the speech was given. In relation to the earlier questioning around taking on board the comments, I would note that similar comments were also reiterated by key stakeholders. It's absolutely our duty to take on board the comments of the sector and stakeholders in order to ensure that we have the most contemporary regulatory model and are communicating well with the sector.

Senator SHELDON: So we're clear that the investigation isn't—

Senator Cash: I think that this is a private investigation that Mr Laming is doing based on what you've put to us. Just to not confuse the two issues, because, again, backbenchers are allowed to do what backbenchers do—Chair, it might useful to get on the record exactly what the government is doing in relation to ASQA, in particular post the Joyce review and the recommendations that were made, because this is Mr Laming. He is entitled to his opinion. He is a backbencher. He is entitled to meet with people. But the government is doing what the government will do.

Senator PRATT: That's not a question that we have asked.

CHAIR: I will ask that question. Labor, you've had roughly 20 minutes. With your permission: if you could answer the question that the minister has put to me.

Senator PRATT: If we're trying to avoid a spillover, it would be good to have some extra time.

CHAIR: It won't take too long, Senator.

Ms N Williams : In response to that question: as the minister said, there have been several reviews into ASQA that relate to better balancing ASQA's regulatory role and the educative role that it can provide within the sector. That includes recommendations from both the Braithwaite review and subsequent recommendations that have occurred through the Joyce review. I might ask Ms McDonald to talk through some of the explicit changes that we're making in this space. The changes in terms of this additional focus on the educative role, changes around transparency—in particular, looking at the recommendations that Professor Braithwaite made with respect to the NVETR Act—areas where we're putting specific focus and looking at those opportunities for ASQA to provide better guidance and structure for the sector in terms of its compliance with the requirements. Ms McDonald, do you have something that you might be able to add there?

Ms McDonald : There's been a lot of work based on both the Braithwaite review and the Joyce review that has been undertaken by the department, working particularly with states and territories. In particular, we have had a look at the fitness for purpose of the legislation in terms of it supporting ASQA's role and its ability to act as a balanced regulator. By that, we mean being clear that it takes compliance action against RTOs where there is an impact on students and it ensures the quality and minimum standards are met. At the same time, it has the flexibility to be able to assist the sector improve its quality, lift the performance and support RTOs with clarity of information. We've worked with states and territories around that. There will be some legislation coming into parliament in this sitting that helps clarify the arrangements and provides better support to ASQA to be able to fulfil its role.

We have also had a look in line with the Joyce and Braithwaite recommendations as to how ASQA could expand its activities in terms of providing more support and education to the sector in terms of quality. There are resource implications for that. We've worked with ASQA in terms of its estimates, as to how it might do it and the models under which it might operate, and we've also worked with the states and territories in that regard. We've provided that advice to government, and that is a matter for government in terms of the next steps. They're probably the main components.

CHAIR: Excellent. Thank you.

Senator SHELDON: To the minister: is the minister aware that, in September 2019, the member for Bowman circulated among training organisations a draft format and suggestion that organisations contact the federal MP in the location where their organisation is based and request that the MP submit their circumstances to the Commonwealth Auditor-General—that they personally request an audit of ASQA's regulatory conduct?

Senator Cash: The member for Bowman is entitled to do what he does, but the government has its very clear direction in relation to where it will be taking ASQA.

Senator PRATT: The question was whether you were aware that was taking place.

Senator Cash: I don't believe so—no. Mr Laming has made a number of comments. I'd need to properly look at exactly what you have in front of you, but I don't believe so—no.

Senator PRATT: Did the minister meet with the member for Bowman about these issues?

Senator Cash: I've had discussions with the member for Bowman—yes. But, again, as I would say to the member for Bowman, as I would say to this committee, and as outlined by both Ms Williams and Ms McDonald, the government has a clear direction in relation to ASQA. This is in particular post the work done with the Braithwaite review but, more recently, the Joyce review. We have made some announcements in that regard and additional work is being done.

Senator SHELDON: Could the minister table any correspondence or communications received by ASQA or the minister or her staff from Mr Laming in relation to ASQA?

Senator Cash: I'd need to take that on notice.

Senator PRATT: Can I ask whether the member for Bowman has the minister's or assistant minister's endorsement of the views expressed in his email, in particular that the ANAO should audit ASQA's regulatory conduct?

Senator Cash: Again, I'd need to have the email provided to me so that I can read it in full.

Senator PRATT: It's pretty obvious. If you've had these meetings with him, were you aware that he was campaigning to send the—

Senator Cash: I am aware that Mr Laming has certain views in relation to ASQA. I think he's made those views—

Senator PRATT: Okay, but why do you need to see the email? If you know that he's campaigning for an audit—

Senator Cash: I don't want to respond to the document without seeing it.

CHAIR: I think it would assist the minister to answer the question.

Senator PRATT: You're being a bit precious there, Minister Cash.

Senator Cash: More broadly, Mr Laming has raised issues with ASQA.

CHAIR: I think that's harsh.

Senator Cash: I don't think that is news to anybody. He is entitled—

Senator PRATT: No, it's not news to anybody. What we're trying to work out is the extent to which the member for Bowman has tacit approval from the government to run an agenda against ASQA.

Senator Cash: The member for Bowman is a backbencher. The government's response is in relation to evidence that has been gained from the Braithwaite review and, more recently, the Joyce review. The government is responding to those recommendations.

Senator PRATT: Okay. In terms of his campaign to refer ASQA to the Audit Office, do you endorse the idea that ASQA should be audited by the ANAO or not?

Senator Cash: Again, that's a matter for the ANAO in the first instance. The mere fact that a backbencher calls for something does not mean that the government endorses it. I think I've been clear, Ms Williams has been clear and Ms McDonald has been clear in relation to what the government is doing regarding ASQA's regulatory approach but, more particularly, responding to the Joyce recommendations.

Senator PRATT: Okay, but parliamentary committees are able to make referrals and suggestions to the Audit Office, and we have formal processes that all committees can access in making suggestions about what the ANAO should audit. Instead you've got the member for Bowman, Mr Laming, running a campaign quite outside his role as the chair of the Standing Committee on Employment, Education and Training.

Senator Cash: I think he's a backbencher. He is entitled to do what a backbencher does. Again, the government has a clear direction, and that is the policy implementation that we are following.

Senator PRATT: You've said that he's a backbencher, but you've also said you've had a number of meetings with him on these issues.

Senator Cash: Well, I didn't say I'd had a number of meetings. I said that Mr Laming's views are clear. He's articulated them.

Senator PRATT: You said that you'd spoken to him about his views.

Senator Cash: Yes, and again I would have expressed to Mr Laming what I have expressed to this committee: the government is acting upon the recommendations made in particular by the Joyce review, and that is the policy approach the government is taking.

Senator PRATT: Have any resources been provided by the minister's office to Mr Laming for this campaign?

Senator Cash: No, and I've already answered that question. Just to be clear, I have answered that question.

Senator PRATT: Yes, you have. I'm sorry I've jumped over that, because we've just tried to reprioritise our questions. Can you take this on notice: we've asked about the email campaign, but we're interested to know if the minister's office—your office—was previously notified about his intention to do that.

Senator Cash: I've taken that on notice, I believe, in response to Senator Sheldon. But again I would just point out he is a backbencher.

CHAIR: He's a backbencher from Queensland too. Backbenchers from Queensland are particularly vibrant in their views.

Senator Cash: Backbenchers will do what backbenchers will do. The government, though, has a policy and it will implement that policy.

Senator Cash: But I would also say, in terms of that policy, that I don't believe we have the communique here but I'm more than happy to have the communique following on from the recent skills ministers meeting. Even the skills ministers were unanimous in their view that ASQA should take a more educative approach, which goes back to where we started, with the evidence Ms Rice gave the committee right at the very beginning, when this questioning started.

Senator PRATT: Okay. In that context, your annual report, Ms Rice, says the level of ASQA activity in audits has been strong and effective in detecting noncompliance and then applying proportionate regulatory sanctions. I note that the member for Bowman does not seem to agree with this. He said:

It appears to me ASQA is increasingly using the AAT as a vehicle for extinguishing RTOs simply by legal cost, reputational damage and delay.

Ms Rice, as an independent regulator, what do you say in response to the member for Bowman's enormous concern at this so-called 'aggressive and adversarial' conduct of ASQA?

Ms Rice : I would take a different view. ASQA regulates, as at 30 June this year, just under 4,000 providers. In the last financial year we undertook more than 1,600 audits. Within that, as I said earlier, there were more than 600 compliance audits. What we've demonstrated in the annual report, on page 18, is that, relative to the whole sector, there are actually small numbers for noncompliance across the sector. The vast majority of providers are either not triggering ASQA's risk indicators or demonstrating compliance at audit. In relation to what we're talking about, from a serious or critical noncompliance point of view it's actually very few numbers. In the last financial year we undertook 263 cancellation decisions, but, in terms of our proportionate responses to areas of noncompliance, we took significantly more decisions to implement written directions. They are much less of a sanction. They are where areas of noncompliance are identified that need to be addressed but are not up around cancellation or suspension.

Senator PRATT: Thank you. That does help. Leading on from that, because you've partially touched on it: is it true to say that half of decisions that organisations are seeking to have reviewed are simply forwarded to the AAT, and that ASQA gives no alternative and no internal independent review?

Ms Rice : Not at all. There are a number of opportunities throughout the regulatory process to provide additional information or rectification of identified noncompliance, or to demonstrate to ASQA that we might have got the findings wrong. There are a number of processes for that internally. I would emphasise that it is point-in-time regulation. Each time those intervals occur, more information is provided. That's why you might have, either internally or in the case of matters before the AAT, a different decision ultimately, and that will inevitably be because, at the end of the day, there is sufficient evidence provided to demonstrate compliance. So there are a number of processes for that internally, and I would reject—

Senator PRATT: And you would help companies step up to become compliant? It would be pretty extraordinary not to step people through that process?

Ms Rice : I might ask Mr Garner to comment, but throughout the process it is about providers demonstrating how they meet the standards. As I mentioned at the outset, we do provide a range of guidance around our expectations in that area. As to the terms of the actual audit process, would you like some further comment on that?

Senator PRATT: I might leave it, because I know we're short on time. What I will ask is: how many decisions were overturned in internal review and how many decisions by ASQA have been reviewed by the AAT since 1 July 2018?

Ms Rice : You refer to things being overturned internally. After a decision is made there is a reconsideration process for some decisions. As to the number where a different decision was arrived at following a reconsideration process—and, as I say, that follows additional information—in the last financial year there were 166 reconsideration processes, and on 96 occasions the decision was revoked. That's where the decision to implement the original sanction was not applied, on the basis of new material.

Senator PRATT: How many was that?

Ms Rice : Ninety-six.

Mr Garner : It's important to remember that that's not on the basis of saying the original decision was incorrect.

Senator PRATT: No. That's kind of what I meant by 'stepping up'. So clearly it's not clear that you're using the AAT as a vehicle for extinguishing RTOs by legal costs, because clearly once you've got through that process you would have providers that aren't meeting the regulatory standard, and you would have to do something about that, wouldn't you?

Ms Rice : We work through our regulatory processes and ultimately make a decision. The AAT is obviously a mechanism for having merits review of that decision, which is absolutely fine.

You asked earlier about the number of matters before the AAT. At 30 June this year—I think from ASQA's inception in 2011, so some eight years—there had been 484 matters concluded before the AAT. Around 53 per cent of those matters were settled by consent—that is, inevitably, ultimately, reaching compliance and they settled in some mechanism. Again, it's not saying that the original decision was wrong; it's just on the basis of the information at that time.

CHAIR: Being quarter past—

Senator PRATT: Sorry, we just wanted to enable that answer to be completed, which is about the overturning of the finding.

CHAIR: We'll complete the answer and then we'll go to the break.

Ms Rice : There have only been 32 occasions where a matter before the AAT has run its full course and there's been an actual decision by the AAT—that's as at 30 June this year. On 21 occasions, ASQA's decision was affirmed, and on 11 of those occasions ASQA's decision was either set aside or varied.

CHAIR: Being 16 past the hour, that concludes questions for the Australian Skills Quality Authority. Thank you very much. That also concludes the Employment, Skills, Small and Family Business portfolio. All officials are released; please return to your places of work—the secretary has asked me to remind you about that.

Proceedings suspended from 13 : 16 to 14 : 18