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National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020



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ISSN 1328-8091

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BILLS DIGEST NO. 91, 2019-20 16 MARCH 2020

National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020 Dr Hazel Ferguson Social Policy Section

Contents

Purpose of the Bill ........................................................... 3

Background ..................................................................... 3

The Australian Skills Quality Authority ....................... 3

Reasons for the review of ASQA’s governance, policies and culture ................................................... 4

Committee consideration ................................................ 7

Senate Standing Committee for Selection of Bills ...... 7 Senate Standing Committee for the Scrutiny of Bills ........................................................................... 7

Policy position of non-government parties/independents...................................................... 8

Position of major interest groups..................................... 8

Financial implications ...................................................... 8

Statement of Compatibility with Human Rights................ 8

Parliamentary Joint Committee on Human Rights ..... 8 Key issues and provisions ................................................ 9

Office of the National VET Regulator ......................... 9

Appointment arrangements .................................. 10

Conditions for appointment .................................. 11

Staffing arrangements ........................................... 12

Finance Law ........................................................... 12

Advisory Council ...................................................... 12

Appointment arrangements .................................. 14

Conditions for appointment .................................. 14

Advisory Council procedures ................................. 15

Delegation of the Minister’s powers ........................ 16

Other provisions: Information sharing ........................... 17

Date introduced: 13 February 2020

House: House of Representatives

Portfolio: Education, Skills and Employment

Commencement: Parts 1 and 2 of Schedule 1 commence on 1 July 2021, or earlier by proclamation. Part 3 of Schedule 1 commences immediately after Parts 1 and 2 of Schedule 1 commence, or immediately after the commencement of Schedule 1 to the National Vocational Education and Training Regulator Amendment Act 2020 (which will commence on 1 July 2020)—whichever occurs later. Schedules 2 and 3 commence the day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at March 2020.

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National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020 2

Concluding comments ................................................... 17

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National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020 3

Purpose of the Bill The main purpose of the National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020 (the Bill) is to amend the National Vocational Education and Training Regulator Act 2011 (the NVETR Act) to revise the governance structures of the national vocational education and training (VET) regulator, the Australian Skills Quality Authority (ASQA). The Bill would replace the current three-Commissioner leadership structure (in which the Chief Commissioner is also the Chief Executive Officer (CEO)) with a stand-alone National VET Regulator/CEO, supported by a ten-member Advisory Council. According to the Minister’s second reading speech, these changes are in response to early findings from the review of ASQA’s governance, policies and culture, which is due to conclude in March 2020.1

The Bill also includes expanded information sharing provisions for the National Centre for Vocational Education Research (NCVER), which are outlined in the other provisions section of this Bills Digest.

A number of minor consequential amendments to the Education Services for Overseas Students Act 2000 (ESOS Act), Higher Education Support Act 2003, National Vocational Education and Training Regulator (Charges) Act 2012, and VET Student Loans Act 2016, minor amendments as a consequence of the recently legislated National Vocational Education and Training Regulator Amendment Act 2020, and other transitional provisions are contained in the Bill but not discussed in this Bills Digest.2

Background

The Australian Skills Quality Authority The Council of Australian Governments (COAG) agreed to the creation of a National VET Regulator in December 2009, and ASQA was established in 2011 under the NVETR Act.3 All states except Victoria and Western Australia have referred powers for VET regulation to the Commonwealth.4

As the National VET Regulator, ASQA:

• registers training providers

• accredits VET accredited courses and

• registers VET and English language course providers who wish to offer courses to overseas students studying in Australia (CRICOS).5

VET providers based in or offering training in referring states, or to overseas students, must register with ASQA.6

1. S Irons, ‘Second reading speech: National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020’, House of Representatives, Debates, (proof), 13 February 2020, p. 5. 2. More information about the National Vocational Education and Training Regulator Amendment Act 2020 is available from H Ferguson, National Vocational Education and Training Regulator Amendment Bill 2019, Bills digest, 74, 2019-20,

Parliamentary Library, Canberra, 2020. 3. Council of Australian Governments (COAG), Communiqué, COAG Meeting, Brisbane, 7 December 2009, p. 1. 4. National Vocational Education and Training Regulator Act 2011 (the NVETR Act), Part 1, Division 3; Australian Skills Quality

Authority (ASQA), ‘How does an RTO in Western Australia or Victoria become registered with ASQA?’, ASQA website. Providers only offering courses in Victoria or Western Australia, and not intending to enrol overseas students, do not need to register with ASQA. They can register with their relevant state regulator instead (the Victorian Registration and Qualifications Authority and the Western Australian Training Accreditation Council). 5. ASQA, ‘ASQA overview’, ASQA website. 6. National Vocational Education and Training Regulator Act 2011 (the NVETR Act), Part 2; ASQA, ‘Our role’, ASQA website.

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National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020 4

As at March 2020, 3,672 registered training organisations (RTOs) were registered with ASQA―the majority of the 4,055 RTOs with current registration.7

Reasons for the review of ASQA’s governance, policies and culture When ASQA was established, its role brought the Commonwealth into greater contact with RTOs.8 Since then, criticisms have circulated about the nature of ASQA’s engagement with RTOs, with leadership structures being one focal point for concern. For example, recruitment of a new Chief Commissioner for ASQA in 2016 was framed as part of restoring confidence in the sector after the upheavals associated with widespread rorting of the former VET FEE-HELP scheme (replaced by VET Student Loans in 2017).9

In 2017, a comprehensive review of the NVETR Act, as well as the broader VET legislative environment, was commissioned by Government, and All Eyes On Quality: Review of the National Vocational Education and Training Regulator Act 2011 Report (the Braithwaite Review) reported in January 2018.10 It found:

Throughout the review, stories arose of students whose experiences of their VET journey could be classed as disappointing if not demoralising…

The review accepts that the establishment of ASQA under the NVETR Act has, on balance, been a helpful start to establishing a VET regulatory framework to clean up such abuses. It has reduced overlap and duplication across the country, and the reforms to ASQA’s audit model augur well for the future. It is also acknowledged that ASQA performs its essential role in a complex and challenging environment. Few regulators in Australian history have cancelled registrations for such a large number of businesses in a relatively short period of time; yet few have faced such major challenges of profound importance to Australia’s future.

11

It then suggested:

… that the Government commit to evaluating ASQA according to its success in driving continuous improvement in the quality of education and training and protection of the rights of students, both of which are integral to desirable student outcomes. 12

In the lead-up to the 2019 election, a broader review of the VET system was commissioned, and Strengthening Skills: Expert Review of Australia's Vocational Education and Training System (the Joyce Review) was delivered in March 2019.13 Drawing on the Braithwaite Review and its own consultations and analysis, the Joyce Review was more explicitly critical of ASQA:

7. Department of Education, Skills and Employment (DESE), ‘Organisation / RTO search’, training.gov.au website (search for all RTOs registered with ASQA, with current registration); DESE, ‘Organisation / RTO search’, training.gov.au website (search for all RTOs registered with Vic VRQA, QLD DETE, SA DFEEST, WA TAC, Tas TQA, NT DET, ACT DET, NSW VETAB, TVET, and ASQA, with current registration). Note: these figures are accurate at the time of writing but will vary slightly over time due to the progress of provider applications for registration, regulatory decisions, and other factors that can cause providers to move in and out of the system.

8. C Kempner, National Vocational Education and Training Regulator Bill 2010, National Vocational Education and Training Regulator (Transitional Provisions) Bill 2010, Bills digest, 61-62, 2010-11, Parliamentary Library, Canberra, 2011, p. 22. 9. J Mitchell, ‘ASQA: the latest target for blame’, The Australian TAFE Teacher, 50(3), Spring 2016, p. 13. 10. V Braithwaite, All eyes on quality: review of the National Vocational Education and Training Regulator Act 2011 report, report

prepared for the Department of Education and Training (DET), Canberra, January 2018. 11. Ibid., p. 9; See also pp. 110-114 for a summary of stakeholder concerns about ASQA’s role. 12. Ibid.

13. S Joyce Strengthening skills: expert review of Australia's vocational education and training system, report prepared for the Department of the Prime Minister and Cabinet (PM&C), Canberra, 2019.

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While there was general acceptance of the need for a robust national regulator, particularly after the damage caused to the reputation of the vocational education sector during the VET FEE-HELP scheme, there was a strong sense that the approach the regulator is taking to its role is causing its own problems. Most concerningly, industries and RTOs in a number of jurisdictions, particularly smaller ones with thin training markets, cited examples of good long-term smaller providers leaving the sector because of the perceived risks and compliance costs associated with the way the ASQA regulatory regime is currently being implemented.

14

Among other recommendations, the Joyce Review recommended ASQA address these issues by taking a more ‘educative approach’ to its engagement with RTOs.15

The Government’s response to the Joyce Review was first announced in the 2019-20 Budget.16 Additional response measures were announced in the Mid-Year Economic and Fiscal Outlook (MYEFO) 2019-20, including $18.1 million to improve ASQA’s regulatory approach.17

Since responsibility for VET is shared between the Commonwealth and state and territory governments, the broader VET agenda was then considered by COAG. Following the return of Parliament after the 2019 election, at the August 2019 COAG meeting, leaders agreed to a new ‘Vision’ for VET which:

a. Provides workforce skills and relevant, up-to-date qualifications that are well-matched to the evolving opportunities and challenges of Australia’s modern economy.

b. Is flexible in providing skills at all points in an individual’s career cycle whether it be foundational training, initial training, upskilling or re-skilling.

c. Delivers high-quality education and training for all learners in recognition that VET and higher education are equally valued pathways into employment.

d. Provides useful and accessible careers information that enables prospective learners and trainees to make informed decisions about their future.

e. Is responsive to the needs of private industry and the public sector, ensuring employers have ready access to a highly skilled and adaptable workforce, while acknowledging industry has shared responsibility for growing a skilled economy.

f. Provides VET qualifications to school students that are valued by employers and provides a clear pathway from school to careers that require VET qualifications.

g. Delivers positive opportunities and outcomes for all Australians regardless of geographic, social or personal circumstances. This includes access for learners in regional, rural and remote areas, and to foundational skills when individuals need them. 18

The COAG Skills Council then considered the Vision at its September 2019 meeting, and tasked officials with developing a roadmap, agreeing on three priorities for VET system improvements:

14. Ibid., p. 36. 15. Ibid., p. 38. 16. Australian Government, Budget measures: budget paper no. 2: 2019-20, pp. 69-70. 17. J Frydenberg (Treasurer) and M Cormann (Minister for Finance and the Public Service), Mid-Year Economic and Fiscal Outlook

2019-20, p. 214; Department of Education, Skills and Employment (DESE), ‘Delivering skills for today and tomorrow’, DESE website, last modified 28 January 2020. 18. COAG, Vocational Education and Training (VET), 9 August 2019.

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• relevance―actions in this area will ensure that VET is relevant and responsive to the job market, employers, industry and learners

• quality―actions in this area will support public confidence in the quality and value of VET for students throughout their lives and move it to parity with the higher education system

• accessibility―actions in this area will ensure all prospective students and employers can access suitable information and training when and where it is required, and include a specific focus on supporting access for disadvantaged Australians.19

At the same meeting, the Skills Council:

[agreed that ASQA] should improve its engagement with the VET sector and expand its educative role…

…[and] called for immediate work to be done to reform ASQA’s regulatory approach, improve confidence in the regulator and support continuous improvement in training provision across the VET sector. 20

Following the meeting, the Australian Government confirmed its commitment to regulatory reforms in response to the Braithwaite Review and the Joyce Review, and announced:

As part of these changes Mark Paterson AO, the Chief Commissioner of ASQA, has decided the proposed shift in direction for ASQA provides an appropriate time for him to step down and pass responsibility for managing the next phase of ASQA’s evolution to others. 21

Mark Paterson was himself appointed at a challenging transitional point for ASQA, and led the regulator as the sector transitioned from VET FEE-HELP to VET Student Loans in 2017.22 Incoming Chief Commissioner Saxon Rice expressed a commitment to a ‘strong and productive relationship’ with the VET sector.23

At the end of October 2019, the Government announced that a ‘rapid review’ into ASQA’s governance, policies and culture had commenced, to inform a 12 to 18 month program of improvements to the regulator.24 According to the Minister’s second reading speech, it is the early findings of this review that have resulted in the governance changes proposed in the Bill.25

The implementation of changes to ASQA’s governance is included as the first action to be completed to achieve ‘high quality education, training and assessment’ in the draft five year roadmap released by the Skills Senior Officials’ Network in February 2020, Vocational Education and Training Reform Roadmap: Consultation Draft―this responds to the COAG Skill’s Council direction that a roadmap be developed to achieve the COAG vision for VET.26

19. COAG Skills Council, Communiqué, COAG Skills Council Meeting, Melbourne, 20 September 2019, p. 1. 20. Ibid. 21. M Cash (Minister for Employment, Skills, Small and Family Business) and S Irons (Assistant Minister for Vocational Education, Training and Apprenticeships), Ministers announce changes to the Australian Skills Quality Authority, media release,

27 September 2019. 22. Ibid.; S Easton, ‘Mark Paterson to lead VET regulator amid student loans overhaul’, The Mandarin, 12 December 2016. 23. S Jenkins, ‘New ASQA boss wants “productive” relationship with VET sector’, The Mandarin, 17 October 2019. 24. M Cash, National vocational education regulator to focus on training excellence, media release, 30 October 2019. 25. S Irons, ‘Second reading speech: National Vocational Education and Training Regulator Amendment (Governance and Other

Matters) Bill 2020’, House of Representatives, Debates, (proof), 13 February 2020, p. 5. 26. Skills Senior Officials’ Network, Vocational Education and Training Reform Roadmap: consultation draft, n.p., February 2020, pp. 2, 6.

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Committee consideration

Senate Standing Committee for Selection of Bills At its meeting of 26 February 2020, the Senate Selection of Bills Committee recommended that the Bill not be referred to a committee for inquiry.27

Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills (the Scrutiny Committee) had concerns in relation to the following:

• Item 34 of Schedule 1 of the Bill amends the existing no-invalidity clause at subsection 157(6) of the NVETR Act so that a failure of the National VET Regulator to take into account advice from the proposed Advisory Council does not invalidate the performance of any of its functions. The Scrutiny Committee noted that ‘there are significant scrutiny concerns’ with such no-invalidity clauses and did not accept the Government’s justification of the need for administrative certainty as sufficient28

• Proposed section 214A of the NVTER Act, inserted by item 3 of Schedule 2 provides for the Minister to make information safeguard rules by legislative instrument (discussed below in this Bills Digest). The Scrutiny Committee noted that ‘significant matters, such as the safeguards for the disclosure of information, should be in primary legislation unless a sound justification for the use of delegated legislation is provided’ and expressed concerns that the making of the rules is not mandatory.29

To this end, the Scrutiny Committee requested the Minister’s advice on the following:

…the rationale for expanding the existing no-invalidity clause in subsection 157(6) so that failure of the National VET Regulator to comply with the requirements in proposed subsection 157(5A) will not affect the validity of the performance of the Regulator's functions.

[and] why it is considered necessary and appropriate to leave the safeguards for the disclosure of information to delegated legislation; and

whether the bill can be amended to:

- include at least high-level guidance regarding the relevant safeguards on the face of the primary legislation; or

- at a minimum, to provide that the minister must, rather than may, make information safeguard rules under proposed section 214A (and to remove references to '(if any)' in proposed paragraphs 210A(3)(a) and (b) and subsection 210B(3)). 30

At the time of writing, the Minister’s response had not been received by the Scrutiny Committee.31

27. Senate Standing Committee for Selection of Bills, Report, 3, 2020, The Senate, Canberra, 27 February 2020. 28. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 3, 2020, The Senate, 26 February 2020, pp. 13-14. 29. Ibid., pp. 14-15. 30. Ibid.

31. Senate Standing Committee for the Scrutiny of Bills, Ministerial responses, The Senate, Canberra, as at 12 March 2020.

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Policy position of non-government parties/independents At the time of writing, non-government parties/independents have not commented on the details of the Bill.

Position of major interest groups The governance changes proposed in the Bill have been welcomed by ASQA, with Chief Commissioner Saxon Rice stating:

The model represents a significant shift and step forward for ASQA, and will support the agency to continuously improve as a regulator while maintaining independence with respect to regulatory decision-making. 32

The Independent Tertiary Education Council Australia (ITECA), a peak body for non-government higher education and vocational education and training providers, has also expressed support for the changes, calling them ‘important reforms’, which address ‘many of the concerns raised’ with the Government.33

Financial implications The Explanatory Memorandum to the Bill states that it has no financial impact on the Commonwealth or ASQA-registered RTOs, but that $18.1 million has been provided through MYEFO 2019-20 to reform ASQA.34

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.35

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights (PJCHR) noted concerns around the right to privacy and the sharing of personal information made possible by the amendments in Schedule 2 of the Bill (discussed below in this Bills Digest). The PJCHR noted it requires further information from the Minister including:

 why it is necessary to disclose identifiable student data in all instances to all of the listed bodies, and whether some, or all, of the objectives of the measure could be achieved by disclosing de-identified student data;

 why it is necessary to enable the disclosure of personal information to each of the bodies listed, 'for the purposes of that body', rather than limiting the disclosure for the purposes of administering the VET sector; and

32. ASQA, ASQA welcomes proposed new governance structure, media release, 13 February 2020. 33. Independent Tertiary Education Council Australia (ITECA), ASQA legislative reform starts to address governance concerns, media release, 13 February 2020. 34. Explanatory Memorandum, National Vocational Education and Training Regulator Amendment (Governance and Other

Matters) Bill 2020, p. 3. 35. The Statement of Compatibility with Human Rights can be found at page 4 of the Explanatory Memorandum to the Bill.

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 why the bill states that the minister 'may' make information safeguard rules, rather than requiring the minister to make such rules, and why such rules would only apply to disclosure to research bodies and not the broader range of disclosures under proposed subsection 210A(1). 36

At the time of writing, the Minister’s response had not been received by the PJCHR.37

Key issues and provisions Schedule 1 of the Bill contains its key amendments, which address ASQA’s governance arrangements, as outlined below.

Office of the National VET Regulator ASQA is currently headed by three Commissioners―a Chief Commissioner, who is also CEO, and two Commissioners, each with their own areas of specialisation and corresponding responsibilities within ASQA’s organisational structure.38 In 2018-19, the Commissioners ‘met formally on 51 occasions to consider regulatory decisions about provider registrations, regulatory policy and other items. The Commissioner, Regulatory Operations held (as a delegate) a further 47 meetings.’39

Items 28 and 29 of Schedule 1 repeal subsections 155(1) and 155(2) as well as section 156, which establish ASQA’s current Commissioner-led structure, and replace them with proposed subsections 155(1) and 155(2), which would establish the National VET Regulator as a single statutory appointment.40

ASQA’s independence is currently guaranteed, subject to limited provision for Ministerial direction, and this would be retained in the proposed arrangements, with additional provision made for the National VET Regulator to also have regard to any advice provided by the Advisory Council, whether or not the advice was given in response to a request by the National VET Regulator or the Minister.41 The Advisory Council is the second of the two major governance changes proposed in the Bill, and is discussed in detail later in this Bills Digest.

There are some parallels between the proposed governance arrangements and those of the higher education regulator, the Tertiary Education Quality and Standards Agency (TEQSA). However, under the Tertiary Education Quality and Standards Agency Act 2011, while the management and administration of TEQSA is the responsibility of a stand-alone CEO, TEQSA consists of a Chief

36. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 3, 2020, The Senate, 26 February 2020, p. 13. 37. Parliamentary Joint Committee on Human Rights, Ministerial responses, Australian Parliament website, as at 12 March 2020. 38. NVETR Act, sections 155, 156, 179 and 180. Under section 156A, for the purposes of the finance law, within the meaning of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) the National VET Regulator is a listed entity and

the Chief Executive Officer (CEO) is the accountable authority. 39. ASQA, Annual report 2018-19, ASQA, 13 September 2019, p. 76. 40. At item 28, proposed subsection 155(1) specifies that there is to be a National VET Regulator, while proposed subsection

155(2) specifies that the National VET Regulator may also be known as the CEO of ASQA. The note to proposed subsection 155(2) refers to the application of proposed section 173 which is discussed below in this Bills Digest. No change is made to subsection 155(3), which requires that each state and territory education Minister must be consulted if the National VET Regulator is to be abolished. 41. NVETR Act, section 159. This independence is subject to Ministerial direction under section 160 of the NVETR Act and 170C of

the ESOS Act. Section 157, which sets out the functions of the National VET Regulator, also requires that regard must be paid to any reports or information it receives about matters related to the NVETR Act (subsection 157(5)). Item 33 inserts proposed subsection 157(5A), which would also require the National VET Regulator to have regard to any advice provided by the Advisory Council, whether or not the advice was given in response to a request by the National VET Regulator or the Minister.

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Commissioner and Commissioners, allowing for multi-member regulatory decision-making even while day-to-day strategic leadership of TEQSA is the responsibility of the CEO.42

While each sector has its own unique history and challenges, the Organisation for Economic Co-operation and Development (OECD) has observed that multi-member decision-making is more common, and considered more reliable, among independent regulators in OECD countries.43

The OECD identifies a number of benefits to a multi-member decision-making, including a reduced likelihood of ‘capture’ by those with an interest in its decision-making, a diversity of wisdom and expertise being brought to the decision-making, collegiate support for strategic decision-making, greater ‘corporate memory’ over time, and reduced susceptibility to government and industry influence.44

The OECD recommends:

Where a single-member decision maker is chosen, it is important to consider the interaction between the role of the regulatory decision maker and the role of the CEO (or equivalent). It may be appropriate for the responsibility for implementing the decisions and administering the regulator to be vested in a separate individual, for workload or other reasons. In either case, the justification for the model chosen should be clearly articulated, preferably publicly.

45

According to the Explanatory Memorandum to the Bill, the change to a single decision-maker will:

enable the National VET Regulator to perform a role more consistent with that of an agency head, including leading the long and short term strategy and making top-level managerial decisions that determine the objectives, resources and policies of ASQA. 46

The appointment arrangements and terms and conditions for the proposed National VET Regulator are set out in the proposed sections inserted by item 40, and detailed in the sections below. These arrangements are in similar terms to those currently in place (in Part 7), which are repealed at item 41 (discussed further below).

Appointment arrangements The National VET Regulator is to be appointed by the Governor-General by written instrument on a full-time basis, for a period not exceeding five years at a time.47 This appointment is to be subject to the Minister being satisfied the person has appropriate qualifications, knowledge, or

42. Tertiary Education Quality and Standards Agency Act 2011, sections 133, 153 and 154. This is not to suggest that there are no single-member decision-maker regulators in Australia. For example, the Aged Care Quality and Safety Commission, established under the Aged Care Quality and Safety Commission Act 2018, is headed by a single Commissioner.

43. Organisation for Economic Co-operation and Development (OECD), The governance of regulators, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, 2014, p. 71. This publication outlines three approaches to independent regulators’ governance. ASQA is currently constituted accord to the second of these approaches, and the Bill proposes that the third approach be adopted: Governance board model - the board is primarily responsible for the oversight, strategic guidance and operational policy of the regulator, with regulatory decision making functions largely delegated by the chief executive officer (CEO) and staff - for example, the United Kingdom’s OFWAT (Water Services Regulation Authority); Commission model - the board itself makes most substantive regulatory decisions - examples include the United States’ Federal Trade Commission and the ACCC; and Single member regulator - an individual is appointed as regulator and makes most substantive regulatory decisions and delegates other decisions to its staff. See p. 69.

44. Ibid., pp. 69-71. 45. Ibid., p. 71. 46. Explanatory Memorandum, National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020, p. 2.

47. Proposed subsections 162(1) and 162(2). Under section 33AA of the Acts Interpretation Act 1901, if an Act confers on a person or body a power to make an appointment, the power is taken to include a power of reappointment.

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experience, and cannot be someone who has at any time in the two years before the appointment been an executive officer of an RTO.48

The Minister may, by written instrument, appoint a person to act as the National VET Regulator during a vacancy in the office, or if the National VET Regulator is absent from duty, from Australia, or unable to perform the duties of the office for any reason.49 The same eligibility limitations apply as for appointment to the role of the National VET Regulator.50

Conditions for appointment Conditions for the National VET Regulator’s appointment are as follows:

• remuneration will be determined by the Remuneration Tribunal, or if no determination is made, by the Minister51 and allowances are to be prescribed by the Regulations,52 subject to the Remuneration Tribunal Act 197353

• recreational leave entitlements are to be determined by the Remuneration Tribunal54

• a leave of absence, other than recreation leave, may be granted by the Minister, on the terms and conditions as to remuneration or otherwise that the Minister determines55

• if the National VET Regulator wishes to engage in paid work outside the duties of their office, it can only be with the Minister’s approval56

• other terms and conditions not covered by the NVETR Act may be imposed on the National VET Regulator’s appointment by the Minister, in writing57

• the National VET Regulator may resign their appointment by giving written notice to the Governor-General, with resignation taking effect the day it is received, or later if specified in the resignation58

• the National VET Regulator may have their appointment terminated by the Governor-General:

- for misbehaviour59 - if they are unable to perform the duties of their office because of physical or mental incapacity60 - if they become bankrupt, apply to take benefit of any law for the relief of bankrupt or

insolvent debtors, compound with their creditors, or make assignment of their remuneration for the benefit of their creditors61 - if they are absent without leave for 14 consecutive days, or for 28 days in any 12 months62 - if they engage in paid work outside their office without the Minister’s approval63 or

48. Proposed subsections 162(3) and 162(4). 49. Proposed subsection 163(1). 50. Proposed subsection 163(2). 51. Proposed subsection 164(1). 52. Proposed subsection 164(2). 53. Proposed subsection 164(3). 54. Proposed subsection 165(1). 55. Proposed subsection 165(2). 56. Proposed section 166. 57. Proposed section 167. 58. Proposed section 168. 59. Proposed paragraph 169(1)(a). 60. Proposed paragraph 169(1)(b). 61. Proposed paragraph 169(2)(a). 62. Proposed paragraph 169(2)(b). 63. Proposed paragraph 169(2)(c).

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- if they fail, without reasonable excuse, to comply with section 29 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), which deals with the duty to disclose interests, or the rules made for that section.64 • In addition, the Minister must terminate the National VET Regulator’s appointment if they

become an executive officer of an RTO.65

Staffing arrangements The Bill makes provision for staff to assist the National VET Regulator from four sources:

• staff engaged directly by the National VET Regulator under the Public Service Act 199966

• officers and employees of agencies and authorities of the Commonwealth, whose services are made available to the National VET Regulator67

• officers or employees of an appropriate state or territory authority or office made available to the National VET Regulator―such an arrangement may involve the Commonwealth reimbursing the state or territory for the services of a person or people68

• consultants engaged directly by the National VET Regulator, on terms determined by the regulator in writing.69

Finance Law The National VET Regulator, members of staff, and consultants engaged by the Regulator are to be the listed entity known as ASQA for the purposes of the finance law under the PGPA Act, and the National VET Regulator is the accountable authority for the listed entity, as well as being (along with staff and consultants) an official of the entity.70 Item 29 repeals current section 156A which provides for the application of the finance law to the current Commissioner-led structure of the National VET Regulator.

Advisory Council ASQA’s structure does not currently include an expert advisory body. The Commissioner (Regulatory Operations) and Commissioner (Risk, Intelligence and Regulatory Support) have responsibility for bringing their expertise to overseeing the key dimensions of ASQA’s work.71 ASQA also engages with key sector bodies, including peak industry and employer groups, and government agencies to inform its work.72 However, the OECD recommends:

Procedures and mechanisms for engagement should be institutionalised as consistent transparent practices. There should be a focus on establishing structured and regular consultation mechanisms with regulated entities. 73

64. Proposed paragraph 169(2)(d). 65. Proposed subsection 169(3). 66. Proposed subsection 170(1). Proposed subsection 170(2) specifies that the National VET Regulator and the staff engaged under proposed subsection 170(1) together constitute a Statutory Agency, and the National VET Regulator is the Head of that

Statutory Agency. 67. Proposed paragraph 171(1)(a). 68. Proposed subsections 171(2) and 171(3). 69. Proposed section 172. 70. Proposed section 173; finance law is defined at section 8 of the PGPA Act as the PGPA Act itself, rules and instruments made

under the PGPA Act and an Appropriation Act. Under the PGPA Act, the accountable authority has responsibility for and control over a listed entity and can issue instructions relating to the finance law that all officials of the entity must adhere to (see: Department of Finance, ‘PGPA glossary: accountable authority’, Department of Finance website, 2019). 71. ASQA, ‘High level organisational chart’, ASQA website. 72. ASQA, ‘How we engage’, ASQA website. 73. OECD, The governance of regulators, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, 2014, p. 90.

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It states that legislated advisory bodies can be a useful form of engagement and consensus-building around regulation:

Some regulators have formal advisory bodies established in legislation, or an explicit power in legislation enabling the minister or the regulator to create such formal advisory bodies from time to time. In some circumstances, formal and explicit recognition of the important role of effective and structured engagement can be a useful mechanism to build a shared commitment to regulatory objectives.

74

Item 41 proposes to repeal Divisions 2 to 6 of Part 7 of the NVETR Act, which deal with:

• the appointment of Commissioners and arrangements for their meetings

• requirements that ASQA cooperate with the Ministerial Council when the Council assesses whether ASQA is complying with the Standards for VET Regulation75

• the role of the CEO, including that the CEO is the Chief Commissioner, and that the Minister may give directions to the CEO

• staffing arrangements, in similar terms to those proposed for the new structure at item 40.

In place of the repealed arrangements, the Bill proposes to establish an Advisory Council (the Council) to provide advice to the National VET Regulator on the Regulator’s functions.76 The advice is to be general in nature,77 and will not relate to:

• the registration of a particular person or body by ASQA

• the accreditation of a particular course as a VET accredited course, or a person in respect of whom a particular VET accredited course is accredited or

• the registration of a particular provider to provide education to overseas students under the ESOS Act

• a particular RTO, whether they are registered with ASQA or not.78

The Council will perform its functions on its own initiative, or at the request of the National VET Regulator or Minister.79

In line with the arrangements currently in place for the Chief Commissioner/CEO, the Minister would be able to give directions to the Council by legislative instrument, about the performance of its functions.80

74. Ibid., p. 92. 75. A requirement in similar terms, that the National VET Regulator cooperate with the Ministerial Council when the Council assesses whether the Regulator continues to comply with the Standards for VET Regulators, is inserted in proposed section 157A at item 36.

76. Proposed section 174 and subsection 175(1). 77. Explanatory Memorandum, National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020, p. 24. 78. Proposed subsection 175(2). Section 3 of NVETR Act defines VET accredited course as a course accredited by ASQA, or

another body delegated by ASQA for this purpose. See ASQA, ‘When to consider course accreditation’, ASQA website. VET accredited courses are nationally recognised and can be developed where a skill need is not covered by a training package, often in the case of a rapidly emerging need, or highly specialised area―training packages are the more commonly used form of VET qualification, and are approved by the COAG Skills Council through a process of consultation led by the Australian Industry and Skills Committee (AISC). For more information on training packages, see DESE, ‘Training packages’, DESE website, last updated 13 January 2020.

79. Proposed subsection 175(3). 80. Proposed section 176. The note to this proposed subsection clarifies that the direction will not be subject to disallowance and sunsetting under the Legislation Act 2003.

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Appointment arrangements The Council will consist of a Chair and up to nine other members, all appointed on a part-time basis by the Minister, by written instrument.81 The Minister may also make acting appointments to fill vacancies of the Chair or other members.82

Appointments, including acting appointments, to the Council are subject to a number of conditions:

• before any appointment, the Minister must consult with the Ministerial Council (this does not appear to apply to acting appointments)83

• the period of appointment, not exceeding three years at a time, must be specified in the instrument of appointment (acting appointments can be made to fill a vacancy in the Council or to replace an existing member during absence)84

• a person is not eligible for appointment unless the Minister is satisfied they have substantial experience or knowledge in at least one of:

- delivering training - operating or managing RTOs - managing work-based placements for VET students, or employing persons with VET qualifications

- regulating industry sectors and developing and implementing best-practice regulation principles - advocating on behalf of VET students - communicating and engaging with industry and other stakeholders and - any other appropriate field of expertise.85 There do not appear to be any requirements that a mix of these skills is represented on the Council.

Conditions for appointment Conditions for a Council member’s appointment are broadly consistent with those for the National VET Regulator, albeit with adjustments in light of the differing appointment arrangements:

• remuneration will be determined by the Remuneration Tribunal, or if no determination is made, by the Minister86 and allowances are to be prescribed by the Regulations,87 subject to the Remuneration Tribunal Act 1973.88 However, there is no entitlement to remuneration if the member is employed on a full-time basis by the Commonwealth, a territory or a state, a public statutory corporation established by state law that is not a tertiary education institution, or a state- or Commonwealth-owned or controlled company89

81. Proposed sections 177 and 178. 82. Proposed section 179. 83. Proposed subsection 178(2). Section 3 of NVETR Act defines Ministerial Council as the body established by COAG to deal with training and skills or otherwise a body prescribed by the Regulations. Currently this is the COAG Skills Council.

84. Proposed subsections 178(3) and 179(2). Under section 33AA of the Acts Interpretation Act 1901, if an Act confers on a person or body a power to make an appointment, the power is taken to include a power of reappointment. 85. Proposed subsections 178(4) and 179(3). 86. Proposed subsection 180(1). 87. Proposed subsection 180(3). 88. Proposed subsection 180(4). 89. Proposed subsection 180(2) of the NVTER Act and subsection 7(11) of the Remuneration Tribunal Act 1973.

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• the Minister may grant a leave of absence to the Chair on terms and conditions the Minister determines, while the Chair may grant leave of absence to any other Advisory Council member on terms and conditions they determine90

• before any appointment, the person must disclose to the Minister all interests that the person is aware of having in a matter of a kind likely to be considered by the Council.91 If a matter a member has an interest in then comes before the Council, the person must disclose that to the meeting as soon as possible after the relevant facts have come to their knowledge, and the disclosure is to be recorded in the minutes of the meeting.92 Generally, unless the Council determines otherwise, the member will not be involved in any deliberation or decision on the matter―a determination that this requirement does not apply will be made without the involvement of the person with an interest in the issue, and must be recorded in the minutes of the meeting93

• other terms and conditions not covered by the NVETR Act may be imposed on the Council member by the Minister, in writing94

• a Council member may resign their appointment by giving written notice to the Minister, with resignation taking effect the day it is received, or later if specified in the resignation95

• A Council member may have their appointment terminated by the Minister:

- for misbehaviour96 - if they are unable to perform the duties of their office because of physical or mental incapacity97 - if they become bankrupt, apply to take benefit of any law for the relief of bankrupt or

insolvent debtors, compound with their creditors, or make assignment of their remuneration for the benefit of their creditors98 - if they are absent, except by leave, for three consecutive meetings of the Council99 or - if they fail, without excuse, to comply with requirements in relation to disclosure of interests.100

Advisory Council procedures Key meeting and decision-making processes for the proposed Council are also set out in the Bill. These are:

• meetings are to be held at times and places decided by the Chair, as frequently as necessary for the efficient performance of the Council’s functions101

• all meetings must be presided over by the Chair, or a person appointed by them for that purpose, if they are not present102

90. Proposed section 181. 91. Proposed section 182. 92. Proposed subsections 183(1), 183(2) and 183(3). 93. Proposed subsections 183(4), 183(5) and 183(6). 94. Proposed section 184. 95. Proposed section 184A. 96. Proposed paragraph 184B(1)(a). 97. Proposed paragraph 184B(1)(b). 98. Proposed paragraph 184B(2)(a). 99. Proposed paragraph 184B(2)(b). 100. Proposed paragraph 184B(2)(c). 101. Proposed section 184C. 102. Proposed subsections 184D(1) and 184D(2).

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• quorum is constituted by half the Council members holding office at that time, unless a member is required not to be involved in deliberations or a decision due to a conflict of interest, in which case a quorum can be constituted by one fewer than the usual number of members for the purposes of discussion of that matter103

• a question arising at a meeting is to be determined by a majority of votes of members present and voting, with the person presiding to have a deliberative, and, if required, casting vote104

• minutes of meetings must be kept by the Council105

• proceedings of meetings are otherwise for the decision of the Advisory Council. 106 A note to proposed subsection 184D(5) specifies that section 33B of the Acts Interpretation Act 1901, which deals with participation in meetings by telephone, closed-circuit television, or other means of communication, contains further information about the ways in which members may participate in meetings

• decisions may be taken without a meeting if all the Advisory Council members are informed of the proposed decision, and a majority of members who are entitled to vote on the proposed decision indicate agreement to the decision, in a manner determined by the Chair.107

Delegation of the Minister’s powers Currently, under section 223, the Minister may delegate any or all of their powers under the NVETR Act to the Chief Commissioner or Secretary, with the exception of powers under section 91 (which deals with nominating a Judge to be an issuing officer for the purposes of the Act), section 160 (which deals with giving directions to the National VET Regulator) or section 172 (which allows the Minister to appoint a person to act as a Commissioner).

Item 56 repeals this section, and replaces it with proposed section 223, which provides updated wording to refer to the National VET Regulator in place of the Chief Commissioner. The exceptions for section 91 and 160 remain,108 and the following exceptions are added:

• subsection 162(3), which is the proposed subsection dealing with the Minister being satisfied as to the qualifications, knowledge, or experience of a person before they are appointed as the National VET Regulator

• section 163, which is the proposed section dealing with acting National VET Regulator appointments by the Minister

• section 169, which is the proposed section dealing with the termination of the appointment of the National VET Regulator by the Governor-General or the Minister under certain circumstances

• section 176, which is the proposed section dealing with the Minister’s directions to the Council

• section 178, which is the proposed section dealing with the appointment of members of the Council and

• section 184B, which is the proposed section dealing with the termination of appointments to the Council under certain circumstances.

103. Proposed subsections 184D(3) and 184D(4). 104. Proposed section 184E. 105. Proposed section 184F. 106. Proposed subsection 184D(5). 107. Proposed section 184G. 108. Reference to section 172 is not retained as it has been repealed by item 41. A similar exemption is provided by the reference

to proposed section 178, which deals with the appointment of members of the Council.

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This means the Minister may delegate some of their powers in relation to the National VET Regulator and Council, including granting leave in some circumstances, approving paid work by the National VET Regulator, and imposing any other conditions not covered by the NVETR Act, to the Secretary or National VET Regulator.

Other provisions: Information sharing Schedule 2 of the Bill is focused on information sharing arrangements for the National Centre for Vocational Education Research (NCVER).

NCVER is the national body responsible for Australian VET research and statistics, including data on VET students and courses, apprentices and trainees, VET graduate outcomes, VET finance, and VET in schools.109 Under section 205 of the NVETR Act, the National VET Regulator may disclose information to a range of bodies, including the NCVER, for the purposes of administering laws relating to VET. However, the NCVER’s own disclosure of information is not dealt with. Item 2 inserts proposed section 210A, which deals with this issue by allowing NCVER to disclose information collected in accordance with Data Provision Requirements made by the Minister under section 187 (currently the Data Provision Requirements 2012) or equivalent requirements in a non-referring state:

• to the department, another Commonwealth authority, a state or territory authority with responsibility for VET (other than a RTO), or a VET regulator and

• to a person engaged by the NCVER to conduct research on its behalf, if the NCVER and the person satisfy the requirements prescribed in the information safeguard rules.

Proposed section 214A at item 3 specifies that the information safeguard rules may be made by the Minister by legislative instrument, to prescribe matters required or permitted by the NVETR Act to be prescribed by these rules, as agreed by the Ministerial Council.

Proposed section 210B deals with disclosure by the NCVER to the department with responsibility for VET (currently the Department of Education, Skills and Employment), under the circumstances described above. The proposed arrangements would allow the Secretary to disclose the information provided by the NCVER to a Commonwealth Authority, or a person engaged by the Secretary to carry out an activity on behalf of the department, if the person satisfies the requirements prescribed by the information safeguard rules.

Proposed section 210C specifies that these amendments are not intended to limit the disclosure of information, which may be authorised in other circumstances, including under the Privacy Act 1988.

As outlined above in this Digest, the Scrutiny Committee and the PJCHR expressed some concerns with regards to the amendments proposed in Schedule 2.

Concluding comments The primary objective of this Bill is to revise ASQA’s governance arrangements to replace the current three-Commissioner leadership structure with a single decision-maker who will be appointed as the National VET Regulator and the CEO, and be supported by Council with up to ten members.

109. National Centre for Vocational Education Research (NCVER), ‘About us’, NCVER website, 1 January 2019; NCVER, ‘About our data’, NCVER website, 1 January 2019. The NCVER is an independent not-for-profit company owned by the Commonwealth, state and territory ministers responsible for VET.

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Based on the events outlined in the background to this Bills Digest, it is not immediately clear why revising the leadership structure of ASQA emerged as a priority action in the program of work being progressed through COAG in response to the Braithwaite and Joyce reviews, although historically a new CEO/Chief Commissioner has often accompanied a period of significant reform or change to ASQA’s work.

While the creation of the Council appears to be an improvement over the current Commissioner-focused structure in terms of more structured engagement, there are risks associated with the proposal to replace the Commissioners’ multi-member decision-making with a single regulatory decision-maker. At the time of writing, it is not clear from published materials if these risks are justified.

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