BILLS;National Vocational Education and Training Regulator (Charges) Bill 2012;Second Reading – 22 Jun 2012

I rise to speak on the National Vocational Education and Training Regulator (Charges) Bill 2012. In March last year, I spoke in this place on the National Vocational Education and Training (Regulator) Bill and associated bills which established, for the first time in Australia’s history, a national regulator for vocational education and training. The establishment of a national regulator for the VET sector was a key recommendation arising from the 2008 review of higher education led by Professor Denise Bradley AO.

I find it unfortunate that those opposite opposed this measure last year, because this key reform has a great many benefits for Australia’s VET sector and its stakeholders. But, if I am going to give the federal opposition credit for anything, it has to be for their consistency. They are consistent in opposing any positive measures to cut red tape and help strengthen the Australian community. I note that the opposition also opposed this bill, the National Vocational Education and Training Regulator (Charges) Bill 2012, in the House, which is no great surprise given that this bill is an important part of the national regulatory framework for the VET sector and they are opposed to sensible national reform.

Unlike those opposite, this government is committed to improving the quality and consistency of training across the VET sector. We now have a national vocational education and training regulator, the Australian Skills Quality Authority, or ASQA, and I am pleased that this important reform was able to pass the parliament despite the relentless negativity of those opposite. ASQA’s functions are: registering training providers as registered training organisations; recommending organisations as providers that can enrol international students; accrediting vocational education and training courses and ensuring that organisations comply with the conditions; and standards for registration, including by carrying out compliance audits.

Of course, those on this side of the Senate understand and appreciate the benefits of a national regulator. We know that there are a number of businesses and industries operating across state borders that require particular vocational skills and are concerned to ensure there is consistency between qualifications, regardless of where those qualifications were obtained. In trying to establish the skills needs of their business or industry, they do not want to have to deal with nine regulators in nine different jurisdictions. Also, in a country that is a world leader in the export of education, this is an important reform to ensure the quality and sustainability of international education in this area. Thirty-seven per cent of international students in Australia are enrolled in vocational education and training, and they deserve to have the confidence that they are receiving a quality product. Having a national system of regulation will help ensure that quality and will improve the marketing of Australian VET courses to students overseas. The other major benefit of national regulation is that it assures the quality of vocational education and training, and the confidence of industry and students in that quality.

So I am pleased that the Bradley review made this recommendation, I am pleased that the majority of the Ministerial Council for Tertiary Education and Employment have signed on to this reform and I am pleased that we have been able to get it through the parliament despite, as I said, the negativity of those opposite. There are, unfortunately, two states that have chosen not to refer their powers and come under the jurisdiction of ASQA, and they are Victoria and Western Australia. However, I am confident that, over time, the benefits of a national system of vocational education and training will become apparent to the governments of Victoria and Western Australia and eventually they will come to the conclusion that it is also in their interests to sign on. But here we are now with a national regulator that has responsibility for the registration and performance-monitoring of registered training organisations, and undertakes various monitoring activities associated with that role.

That brings me to the bill before the Senate today. ASQA levies fees and charges through its monitoring activities on a partial cost recovery basis and will be progressively moving to full cost recovery by 2014-15. ASQA’s fees and charges were subject to extensive consultation throughout 2011. The National Vocational Education and Training Regulator Act authorises fees and charges that are application based, and the purpose of this bill is to authorise charges for services that are not application based—that is, additional monitoring activities. These monitoring activities are important to maintaining the ongoing compliance of RTOs and include compliance audits and complaint investigations initiated by ASQA. I will just go into a little bit more detail about those.

First, with regard to the compliance audits, ASQA uses a range of indicators, such as financial management, governance arrangements and the training provider’s past performance, to assign each provider a rating that indicates its non-compliance risk. Each provider’s risk is rated as low, medium or high, and this determines the level of monitoring that ASQA will apply. For example, a provider that is considered to have a high risk of noncompliance will obviously have more rigorous monitoring applied to it. Complaints may be lodged by any member of the community who is not satisfied with the quality of training delivered by an RTO, but generally it is expected that the complaints would be from students, their parents, employers or other industry representatives. Complaints also provide important information regarding RTO compliance for standards of registration. Following the investigation of a complaint or the conduct of a compliance audit, ASQA has a range of sanctions available to it to enforce compliance. These include fines, suspension of registration and, in the worst case scenario, closure. The charges allowed by this bill for compliance audits and complaints investigations conducted by ASQA will be payable by the provider to which the complaint or investigation relates.

For audits, charges will apply for the cost of the audit. For complaint investigations, the charges are payable for the costs and expenses incurred by ASQA in conducting the investigation and any compliance audit conducted as part of the investigation. However, charges for complaint investigations will only apply where ASQA finds the complaint to have been substantiated. For Senator Mason to imply that the costs will be prohibitive is of great concern to me—

 Senator Mason: I did not say it was prohibitive.

 Senator BILYK: I said ‘imply’ that the costs would be prohibitive. You have got to listen, Senator Mason, rather than chat. If you had listened, you would have understood what I had said. If there has been a complaint and it has been substantiated, I do not understand the concern from the other side. I think it is important that everybody is assured of quality, and this is certainly a way to make sure that that happens.

The charges supported by this bill were subject, as I said, to extensive consultation throughout 2011. I am not certain whether Senator Mason mentioned the consultations. But the consultations included face-to-face meetings with state and territory senior officers, peak RTOs, unions and industry representatives. So it is not as though the government is plucking prices out of mid-air. We have had quite extensive consultations. Public comments were invited regarding the draft schedule of fees and charges and an exposure draft of ASQA’s cost recovery impact statement. The charges were established having regard to the resources required, to effectively audit and investigate an RTO. The feedback received from consultations was extremely helpful in ensuring that the new cost arrangements are appropriate to the sector.

The charges were agreed by the ministerial council on 30 June last year and will now be authorised by legislative instrument. A strong, nationally consistent regulatory framework is key to achieving quality and consistency across the VET sector. The integrity of that framework means you must have a strong regulator—a regulator with teeth. You need a regulator that can ensure that VET providers—registered training organisations—are complying with registration standards at all times. Senator Mason reflected on the fact that occasionally that did not happen. It is imperative that we ensure—and I agree with Senator Mason—that this does happen and that the standard is high. It is an area, as Senator Mason mentioned, that is sometimes disregarded by the media and even by the public. I wholeheartedly agree with that view. I think the way to help overcome that disregard is to make sure that the system is tight and that we have quality standards to offer. The compliance audit and complaint investigation powers of ASQA provide a strong incentive for RTOs to comply. They are an incentive, therefore, for RTOs to improve quality if they need to.

The bill currently before the Senate empowers ASQA to charge for these additional monitoring activities. It provides a schedule of fees and charges that allows ASQA to recover reasonable costs and expenses. It also supports a fair and proportionate framework for ASQA’s cost recovery arrangements.

I note that the bill was referred to the Senate Economics Legislation Committee for inquiry. Despite some concerns around clarification of terms and costs for regional and overseas institutions, the committee recommended that the bill be passed in its current form. The committee expressed the view in its report that adequate explanations had been provided regarding the services provided as part of the registration process. The committee also found that the cost recovery impact statement sufficiently explains all relevant fees and charges and clarifies any uncertainties relating to the extraneous nature of compliance audits and additional monitoring activities. In conclusion, this bill is an important component of the national regulatory framework that this government has established for Australia’s vocational education and training sector. I commend the bill to the Senate.