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Monday, 7 February 1994
Page: 465

Senator McMULLAN (Minister for Trade and Minister for Administrative Services) (4.50 p.m.) —I move:

  That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

  Leave granted.

  The speech read as follows

  The training guarantee scheme was established by legislation introduced into the Senate on 18 May 1990, and it came into effect on 1 July 1990. It requires employers to spend a minimum amount on training.

The scheme was introduced as part of the government's policy over the last several years to develop the appropriate environment in which Australian industry can become more competitive internationally. A fundamental step in this process is the development of a highly skilled work force which can adapt quickly to major changes in the economy. The scheme is an additional mechanism to stimulate industry's commitment to training. As the signs of economic recovery strengthen, we must be prepared for an increase in demand for skilled people. The training guarantee provides an important underpinning to achieve this skilled work force.

  This bill amends the principal act to give effect to two amendments promised by the government in the election context and also includes other amendments to minimise compliance costs and give greater flexibility to the scheme. In line with election commitments, the bill provides employers with enhanced flexibility to plan training expenditure over a longer period by allowing excess eligible expenditure incurred in one year to be carried forward to the next year. Although this excess expenditure cannot be carried forward indefinitely, it will assist those employers who have a need to train extensively within a short time frame, but whose training needs may not be so great in the following year.

  At the same time, and in keeping with the same principle, provision is made for employers who have a training expenditure shortfall in one year to make it up through additional training expenditure in the following year. This avoids hasty and unplanned expenditure simply to meet the minimum training requirement.

  The government also committed itself to remove the need for employers to deduct training subsidies provided by government bodies for apprentices and trainees when calculating their net eligible training expenditure. To avoid anomalies, this provision includes any program with training subsidies. As a consequence of this amendment, the minimum allowable apprentice or trainee amount, or `deemed amount' as it is also known, has been doubled to preserve the full incentives effect. It maintains ease of administration for employers who choose to claim the minimum allowable apprentice or trainee amount. Subsequent to the introduction last year of clauses relating to work experience for students and teachers, it became apparent that full-time students 21 years and over were suffering discrimination. The bill removes this anomaly.

  The bill widens the range of entities which can group for the purposes of the act thus giving organisations greater flexibility to maximise their training opportunities. It also specifies that businesses must be related at 30 June to form a group for that year and that a business cannot be a member of more than one group in a particular year. In order to avoid complications concerning responsibility for a shortfall or ownership of an excess, businesses which group will not have access to the carry forward provisions.

  To rectify confusion about who is able to design and approve an eligible training program, the bill simplifies these requirements. It specifies that the person or persons who design or approve the program must, between them, have a working knowledge of the subject area of the program and the skills necessary to design or conduct the relevant type of training program.

  The bill rectifies anomalies about the use of equipment for training by extending the concept of eligible training expenditure. It will now include rental, hire, lease or depreciation expenses on property or equipment for any part of the year during which the employer uses the property or equipment specifically for eligible training programs.

Finally, the bill aligns the training guarantee legislation with a recent amendment to the Australian corporations and securities legislation relating to the appointment of an administrator for liquidation purposes.

  In summary, this bill encompasses a number of measures to make the legislation more business-friendly, especially for the small business sector. These amendments offer significant benefits to business and their retrospectivity to 1 July 1993 will ensure their immediate use on receiving assent. I present the explanatory memorandum to this bill. I commend the bill to the Senate.

  Debate (on motion by Senator McGauran) adjourned.