Purpose of the Bill

The purpose of the National Skills Commissioner Bill 2020 (the Bill) is to establish the National Skills Commissioner (the Commissioner). A Commissioner has been in place in an interim capacity since October 2019.[1]

The National Skills Commissioner Act (when enacted) will provide for the Minister with responsibility for vocational education and training (VET) to appoint a Commissioner to advise the Minister or Secretary of the relevant department, currently the Department of Education, Skills and Employment (DESE), about:

• Australia’s current, emerging and future workforce needs
• VET pricing
• public and private return on VET investment
• VET system performance and
• issues affecting Australian and international labour markets.   

It will also require the Commissioner to produce an annual report to the Minister outlining Australia’s current, emerging and future workforce skills needs, which will be tabled in Parliament and published.

The Bill does not:

• confer any authority on the Commissioner to set VET course fees
• impose any specific requirements regarding consultation, collaboration, or coordination with existing state and territory or Commonwealth VET bodies or
• make any reference to the Commissioner’s independence.

Background

Basis for the commitment

The creation of a National Skills Commission (the Commission) was announced in the 2019–20 Budget as part of the Government’s response to the 2019 Strengthening Skills: Expert Review of Australia's Vocational Education and Training System (the Joyce Review).[2]

The Joyce Review described the Commission as the core of its proposed approach to VET, and recommended it have responsibility for:  

• working with the states and territories on VET funding
• administering all Commonwealth funding to the VET sector based on strategic policy direction from the Minister
• developing and updating clearly linked national, state and territory level and regional skills demand forecasts, with departmental skills resources to be transferred into the Commission
• determining nationally consistent subsidy levels for VET study, in partnership with the states and territories, based on averaged actual costs of delivery for providers nationwide and
• determining nationally consistent percentage loadings for rural and remote areas and disadvantaged groups.[3]

The 2019–20 Budget announced:

$48.3 million over four years from 2019–20 for the establishment of a National Skills Commission that will develop efficient pricing for training, informed by the work of the Productivity Commission. The Skills Commission will also oversee Skills Organisations to ensure industry is leading the development of VET qualifications and training products.[4]

Consultation

Consultations on the design of the Commission were conducted between September and December 2019.[5] A discussion paper to inform consultations was released in September.[6]

In response to the discussion paper, 59 submissions, 13 workshops, and two small business roundtables addressed the Commission’s roles and responsibilities, capabilities, and governance structure.[7] A total of 35 individual consultations were also undertaken, including with senior VET officials from each state and territory except Tasmania.[8]   

In May 2020, the DESE released a summary of the consultation feedback.[9] While not providing detailed recommendations or indicating strong consensus among consultation participants, the summary outlines the following broad areas of interest among stakeholders:

• centralised VET information and skills forecasting
• consistent VET pricing, balanced with local flexibility
• setting standards for high quality VET
• system performance monitoring
• a new strategic approach to industry engagement
• promotion of the VET sector and
• oversight of training product development.[10]

The summary also outlines agreement about the need for:

• building partnerships across the VET sector, including state and territory and existing Commonwealth bodies, in order for the Commission to function effectively and
• governance arrangements to enable the Commission to operate as an ‘enduring institution’ with shared responsibility for VET with the states and territories, a close relationship with industry, and the ability to work efficiently without multiple levels of reporting and accountability.[11]

Current architecture of the national VET system

One of the key challenges of creating a new VET body is evident in the consensus among stakeholders about the need for the Commission to build effective partnerships and share responsibility for VET, without being hampered by multiple levels of reporting and accountability.  

In addition to skills policy and program responsibilities within Australian Government and state and territory departments, there are already a large number of other interacting organisations with responsibility for different parts of the VET system, at both national and state and territory level:

• the Council of Australian Governments (COAG), through the Skills Council, was responsible for managing the shared interests of Commonwealth and state and territory governments in skills and workforce development.[12] COAG agreed to a shared vision for the VET system (the Vision) on 9 August 2019.[13] Following the Prime Minister’s announcement at the end of May 2020, arrangements to replace COAG with a new National Federation Reform Council are currently being reviewed[14]
• the Australian Industry and Skills Committee (AISC) is responsible for working under the Skills Council to develop and approve national training packages, supported by industry-specific Industry Reference Committees, which have representation from large and small businesses, and peak bodies and unions[15]
• the national VET regulator, the Australian Skills Quality Authority (ASQA) is responsible for registration of training providers, accreditation of VET accredited courses and registration of VET and English language course providers who wish to offer courses to overseas students studying in Australia (CRICOS)^[16]
• the Victorian Registration and Qualifications Authority and the Western Australian Training Accreditation Council regulate providers which only offer courses in Victoria or Western Australia, and do not enrol overseas students—such providers do not need to register with ASQA, while providers in other states and territories must always register with the national regulator[17]
• the National Centre for Vocational Education Research (NCVER) is the nation body responsible for collecting, managing, analysing and communicating research and statistics on Australia’s VET sector[18]
• the National Careers Institute (NCI), established in July 2019 as another of the actions in response to the Joyce Review, is responsible for providing career information and support[19]
• a range of state and territory bodies have responsibility for policy advice, program delivery, and oversight of VET, with various arrangements in place in different jurisdictions.[20]

History of national skills commissions in Australia

Technical and Further Education Commission

In April 1973, in the context of growing concern that Australian Government funding for VET was insufficient to meet skill needs compared with other areas of tertiary education, Minister Kim Beazley outlined ‘an urgent need for a critical examination of all aspects of vocational training in Australia’.[21] The resulting Australian Committee of Technical and Further Education (ACOTAFE) delivered its landmark report, TAFE in Australia: Report on Needs in Technical and Further Education (Kangan Report) in April 1974.[22]

The Kangan Report set out a detailed proposal for an Australian Commission on Technical and Further Education.^[23] It anticipated the new Commission would ‘facilitate consultation with and among the States so as to bring about commonality in the conceptual and philosophic frameworks within which TAFE is developing.’^[24] The proposed Commission would operate through five Standing Committees, specialising in finance, research, statistics, course development, and buildings and equipment.^[25]

In response, in 1975, the Government established the Technical and Further Education Commission (TAFE Commission) under the Technical and Further Education Commission Act 1975. The Minister’s second reading speech framed the TAFE Commission as a complement to the Universities Commission, the Commission on Advanced Education and the Schools Commission, which were already in place at the time, and suggested that it would be the final step in ‘establishing a complete range of expert, independent bodies to advise the Government on needs and priorities in the various sectors of education’.[26]

When established, the TAFE Commission consisted of a Chair, Deputy Chair, and between five and ten other members, appointed by the Governor-General.[27] It was responsible for enquiring into and providing information and advice to the Minister about:

• the development of TAFE in Australia
• desirable standards for buildings, equipment, teaching and other staff and facilities
• the needs, in respect to buildings, equipment, staff and other facilities, of institutions, and priorities for satisfying those needs
• grants of financial assistance to the states and the conditions (if any) for such assistance and
• any other matters referred by the Minister, or which the Commission considered required enquiry.[28]

In recognition of the shared responsibilities for VET, the TAFE Commission was also required to consult with the other commissions, and the state and territory bodies responsible for VET.[29]

Commonwealth Tertiary Education Commission

In 1977, the TAFE Commission, Universities Commission and Commission on Advanced Education were replaced with a single overarching body, the Commonwealth Tertiary Education Commission (CTEC) under the Commonwealth Tertiary Education Commission Act 1977. CTEC took up the advisory and consultation responsibilities of the preceding commissions, with the specialist expertise of each commission transferred to councils under CTEC, VET being represented by the Technical and Further Education Council.[30]

Like the TAFE Commission, CTEC was a multi-member body with membership appointed by the Governor-General.[31] It was made up of a Chair and nine other members, with two representatives with particular responsibility for each sector.[32] The Technical and Further Education Advisory Council Chair and Deputy Chair were part of CTEC, and the Council also included six other members.[33]

CTEC was also responsible for administering funding programs where required or authorised by an Act or where required by the Minister.[34]

National Board of Employment, Education and Training

The commission model came to an end in 1988 as part of the Minister for Employment, Education and Training’s efforts to rationalise advisory structures in the portfolio. The commissions were abolished and replaced by the National Board of Employment, Education and Training (NBEET) under the Employment, Education and Training Act 1988.[35]

Like CTEC, NBEET was a multi-member body, supported by specialist councils for each sector.[36] VET was represented by the Employment and Skills Formation Council.[37] However, NBEET did not make recommendations for the annual allocation of grants, or have responsibility for program administration—these functions instead moved into the department, which represented a shift of power to the Minister.

The Employment and Skills Formation Council continued to operate as an advisory body under NBEET until 1996, when the new Coalition Government began acting on its election commitment to wind up NBEET.^[38]

Australian National Training Authority

In 1992, alongside the continued operation of NBEET, arrangements again changed following the agreement of the Australian Government and state and territory skills ministers to a set of national goals and objectives for vocational education and training, which was formalised through the establishment of the Australian National Training Authority (ANTA) under the Australian National Training Authority Act 1992.[39]

ANTA’s functions were significantly broader than that of NBEET. It was responsible for formulating, developing and implementing national VET policy, and allocating Commonwealth grants to the states under funding agreements.[40] The VET Ministerial Council had oversight of the operations of ANTA and state and territory training agencies retained responsibility for VET within each jurisdiction’s borders, and ensured that programs were consistent with plans and agreements approved by the Ministerial Council.[41]

Under the ANTA Agreement, arrangements involved multiple layers of administration, including:

• agreed national goals, objectives and priorities
• a national strategic plan, which set out the strategic directions for VET over the medium term (three to five years)
• planning parameters, which set out the targets and priorities a year in advance, and included indicative estimates for the following two years and
• profiles, which set out specific state and territory plans for the provision and support of VET, including course provision, services, and infrastructure.[42]

The 1996 Report of the Review of the ANTA Agreement (Taylor Review) stated that the ANTA Agreement was ‘a major achievement and an example of how federation should work’, but cited ‘no strong sense of ownership of ANTA as an organisation’ among key stakeholders.[43] Although the review recommended retaining ANTA, it also identified issues related to:

• scope, with key government officials not involved in ANTA
• the complexity and bureaucracy of the system, which had come under strong criticism from industry
• regulatory arrangements within states and territories, with regulators also acting as purchasers of training and
• a failure to effectively implement competition, with a lack of recognition of the role of TAFE coupled with a ‘for its own sake’ approach to competition that had not necessarily delivered efficiency.[44]

Following the 2004 election, the Prime Minister announced that ANTA would be abolished from July 2005 and its responsibilities taken into the then Department of Education, Employment and Workplace Relations (DEEWR).[45]

The new arrangements were set in the Skilling Australia’s Workforce Act 2005, which made provision for:

• the Ministerial Council to have oversight of financial assistance under the Act[46]
• Australian Government conditions of funding, both in the Act and through bilateral funding agreements[47] and
• a ‘Skilling Australia’s Workforce Agreement’, to contain national goals and objectives for VET, policies and priorities, planning arrangements, initiatives, and performance measures.[48]

Skills Australia

Following a period without a statutory skills advisory body from 2005, Skills Australia was established in 2008 under the Skills Australia Act 2008, to give effect to the Australian Labor Party’s 2007 election commitment to address skills shortages.[49]

Skills Australia aimed to address skills shortages by supplying expert and independent research, analysis and advice to government on Australia’s workforce development and skill needs, although it was subject to Ministerial direction regarding how it performed its functions.[50] It marked a return to a multi-member Australian Government advisory body without responsibility for program administration or explicit state and territory ownership, but with responsibility to maintain relationships with states and territories and their relevant authorities.[51]

Australian Workforce Productivity Agency

The 2011–12 Budget announced Skills Australia would be replaced by the Australian Workforce and Productivity Agency (AWPA) (initially named the National Workforce and Productivity Agency), with a broader remit than Skills Australia.[52]

The transition from Skills Australia to AWPA was prompted by:

• industry and union calls for an increased focus on workplace productivity and better linkages between skills funding and industry needs and
• a recommendation from Skills Australia (in its national workforce development strategy) that a new partnership approach to workforce development be adopted, involving government, industry and enterprises.[53]

AWPA began operating in an interim capacity in October 2011:

On 21 September 2011, Senator the Hon Chris Evans, the then Minister for Tertiary Education, Skills, Jobs and Workplace Relations, announced that Government will bring forward the work of the National Workforce and Productivity Agency to 1 October 2011. At that time, the Skills Australia Board was joined by three additional Members to form a Skills Australia transition advisory committee which will operate as the interim board of the National Workforce and Productivity Agency. The three additional Members are Mr Paul Howes, Mr Peter Anderson, and Dr John Edwards.[54]

The Skills Australia Amendment (Australian Workforce and Productivity Agency) Act 2012 amended the Skills Australia Act 2008 to establish AWPA in place of Skills Australia, and take on the functions of the previous body. The key functions of the expanded body were to develop sectoral workforce development plans, undertake research, consult industry, disseminate information on workforce planning issues, and administer the $558 million National Workforce Development Fund.[55]

In July 2014, the work and staff of AWPA was transferred into the Department of Industry, as part of Smaller Government reforms, beginning the current period without a statutory skills advisory body.[56] Despite initial support for the establishment of Skills Australia and evidence that the agency’s advice was generally well regarded, there appears to have been little public commentary on the decision to abolish AWPA.[57]

Committee consideration

Senate Selection of Bills Committee

At its meeting of 13 May 2020, the Senate Selection of Bills Committee deferred consideration of the Bill to its next meeting.[58]

Senate Standing Committee for the Scrutiny of Bills

At the time of writing, the Senate Standing Committee for the Scrutiny of Bills had not considered the Bill.[59]

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

TAFE Directors Australia (TDA), representing public TAFE and university VET providers, cautiously welcomed the announcement of the Commission in the 2019–20 Budget, stating:

In a plan that some in the sector may liken to bringing back the Australian National Training Authority, the Government will establish a National Skills Commission which will look at the skills and knowledge needed for the future and develop efficient pricing for training in conjunction with the Productivity Commission... job projections show that the majority of new jobs need VET-trained entrants, so the task before it will be clear in terms of current training demand.[60]

Independent Tertiary Education Council Australia (ITECA), which represents private providers in the higher education and VET sectors, has welcomed the introduction of the Bill, stating:

The analysis by the National Skills Commissioner will provide independent [Registered Training Organisations] RTOs with clear guidance that the Australian Government is making the right investment in skills at the right time. The Commissioner’s guidance will provide certainty to independent RTOs as they plan for the future of their business.[61]

Financial implications

The Explanatory Memorandum to the Bill affirms that $48.3 million has been budgeted for the establishment of the Commission, as announced in the 2019–20 Budget.[62]

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.[63]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights had no comments on the Bill.[64]

Key issues and provisions

The National Skills Commissioner

Part 2 of the Bill deals with the establishment and functions of the Commissioner.

Clause 5 provides a simplified outline of Part 2.

Establishment and functions

Clause 6 establishes the Commissioner.

Clause 7 sets out the functions of the Commissioner:

• to provide advice to the Minister or to the Secretary in relation to:
  • Australia’s current, emerging and future workforce skills needs
  • the development of efficient prices for VET courses
  • the public and private return on government investment in VET qualifications
  • the performance of Australia’s system for providing VET
  • issues affecting the state of the Australian and international labour markets
• to, in relation to the matters listed above, in addition to advising the Minister or Secretary:
  • inform the public about these matters
  • collect, analyse, share and publish data and other information about these matters to inform policy development and program delivery and
• any other function that is conferred on the Commissioner by the rules, by this Act or by any other law of the Commonwealth, or is incidental or conducive to the performance of the above functions.

Reporting requirements

Under subclause 7(2), from 1 January 2021, the Commissioner will be required to prepare and provide to the Minister an annual report on Australia’s current, emerging and future workforce skills needs, before the end of the calendar year. Under subclause 7(3), the Minister will be required to table the report in Parliament as soon as practicable after receiving it. After the report is tabled, the Commissioner will be required to publish it on the department’s website, or in a manner specified in the rules, under subclause 7(4).

Advisory committees

Clause 8 allows for the establishment of advisory committees to assist the Commissioner, at the discretion of the Minister.

Subclause 8(1) allows the Minster to establish, in writing, advisory committees to advise the Commissioner in relation to the performance of the Commissioner’s functions. Subclause 8(2) allows the Minister to determine an advisory committee’s:

• terms of reference
• terms and conditions of appointment for members and
• procedures.

If such an advisory committee is established, subclause 8(3) requires the Commissioner to have regard to any advice it provides. However, subclause 8(4) clarifies that this requirement is not intended to limit the matters the Commissioner may consider. 

Clause 9 specifies arrangements for the appointment, remuneration, impartiality, resignation, and termination, of advisory committee members.

Ministerial direction

Clause 10 allows the Minister to direct, by legislative instrument, the way in which the Commissioner carries out their functions, and requires the Commissioner to comply with such directions. The note to subclause 10(1) clarifies that a legislative instrument made for this purpose will not be subject to disallowance or sunsetting.

Administrative matters

Part 3 of the Bill deals with administrative matters.

Clause 11 provides a simplified outline of Part 3.

Clauses 12 to 19 specify arrangements for the appointment, acting appointment, remuneration, leave of absence, paid work, other terms and conditions as determined by the Minister, resignation, and termination, of the Commissioner:

• the Commissioner is to be appointed by the Minister by written instrument, on a full-time basis, for a period not exceeding five years, and may be reappointed—the Minister must be satisfied the person has appropriate qualifications, knowledge or experience (clause 12)
• if there is a vacancy in the Office of the National Skills Commissioner, or the Commissioner is absent from duty or from Australia, or otherwise unable to perform their duties, the Minister may, by written instrument, appoint a person to act as the Commissioner—the Minister must be satisfied the person has appropriate qualifications, knowledge or experience (clause 13)
• remuneration is to be set by the Remuneration Tribunal, or if no determination by the Tribunal is in operation, remuneration will be as prescribed in the rules (subclause 14(1))
• allowances are to be prescribed by the rules (subclause 14(2))
• recreation leave is to be set by the Remuneration Tribunal (subclause 15(1))
• the Commissioner may take a leave of absence (other than recreation leave), with the Minister’s approval, on terms and conditions that the Minister determines (subclause 15(2))
• the Commissioner may only engage in paid work outside their office with the Minister’s approval (clause 16)
• other terms and conditions of the Commissioner’s appointment, not covered in the Act, may be determined by the Minister (clause 17)
• the Commissioner’s appointment may be terminated by the Minister:
  • for misbehaviour
  • if the Commissioner is unable to perform the duties of their office due to physical or mental incapacity
  • if the Commissioner becomes bankrupt, applies to take the benefit of laws for relief of bankrupt or insolvent debtors, makes an agreement with their creditors, or makes an assignment of their remuneration for the benefit of their creditors
  • if the Commissioner is absent without leave for 14 consecutive days, or 28 days in any 12 months
  • if the Commissioner engages in paid work outside their duties without permission or
  • if the Commissioner does not comply with section 29 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), which deals with the duty to disclose interests, or any rules made for that section.

Clause 20 specifies that the Commissioner is taken to be an official of the Department (currently DESE) for the purposes of the finance law (an Appropriation Act and the PGPA Act, rules and instruments made under that Act) and that the Department’s annual report, prepared under section 46 of the PGPA Act, must include information on the performance of the Commissioner’s functions, and the exercise of the Commissioner’s powers, during the period.

Certain duties of officials are set out in Division 3 of Part 2-2 of the PGPA Act, including a duty of care and diligence, a duty to act honestly, in good faith and for a proper purpose, a duty not to improperly use his or her position to gain a benefit or advantage, and a duty not to improperly use information.

Clause 21 provides that APS employees of the Department be made available to assist the Commissioner. The Commissioner may also be assisted by staff of other agencies (clause 22) and consultants (clause 23).[65]

Other matters

Part 4 deals with miscellaneous provisions.

Clause 24 provides a simplified overview of Part 4.

Clause 25 deals with delegations. It provides that:

• the Minister may, in writing, delegate their powers to appoint an acting Commissioner, or to grant the Commissioner a leave of absence, other than recreation leave, to the Secretary of the Department, or an SES or acting SES employee of the Department and
• the Commissioner may, in writing, delegate any or all of their functions or powers under the Act to a member of staff assisting the Commissioner, or person from another agency who is assisting the Commissioner, providing the person holds at least an acting Executive Level 2 position, or equivalent.

Clause 26 provides that the Minister may, by legislative instrument, make rules prescribing matters required or permitted by the Act, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. The rules may not create an offence or civil penalty, provide powers of arrest, detention, entry, search or seizure, impose a tax, set an amount to be appropriated, or directly amend the Act.

Concluding comments

This Bill proposes to give effect to the 2019–20 Budget commitment to create a National Skills Commission, by establishing a National Skills Commissioner, supported by advisory committees.

As outlined in the background to this Bills Digest, statutory skills advisory bodies have a long history in Australia, although they have had varying degrees of independence and levels of responsibility. The model proposed in the Bill stands out as the first time a single commissioner structure has been proposed. This approach is broadly consistent with the changes proposed in the National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020, which would see ASQA’s current three-Commissioner leadership structure replaced with a stand-alone National VET Regulator/CEO, supported by a ten-member Advisory Council.[66]

Stakeholder consultation suggests that in a crowded administrative landscape with a large number of existing VET bodies, the Commissioner’s success will depend in large part on their capacity to work effectively across stakeholder groups.[67]