Chapter 1 - Majority report
1.1
On 15 June
2005, the Senate referred to the Legislation Committee for inquiry,
the Skilling Australia's Workforce Bill 2005 and a related bill. The committee
was asked to report by 18 August. A total of 10 submissions were received.
Policy rationale
1.2
In October 2004, the Prime Minister announced that the
Australian National Training Authority (ANTA) would be abolished from 1 July 2005 and its responsibilities
transferred to the Department of Education, Science and Training (DEST), bringing
about significant administrative savings. In February 2005, DEST released a
'directions paper'[1] which included
three broad principles which would guide the changes and a model for a new
national training system. The principles include that industry and business needs
must drive training policies, there should be better quality training outcomes
through more flexible and accelerated pathways and processes should be
simplified and streamlined.[2]
1.3
The Minister for Vocational and Technical Education,
the Hon. Gary Hardgrave
MP, stated in his second reading speech that the
Skilling Australia's Workforce Bill sets out the objectives for the new
national training system and describes the commitment by the Commonwealth and
state and territory governments to support the new arrangements:
A key feature of [the bill] will be strengthening of the
Australian government's leadership role in vocational and technical education
by tying funding more strongly to a range of conditions and targets for
national training outcomes.
Through this legislation the Australian government will drive genuine
reform by requiring states and territories to increase the flexibility and
responsiveness of training delivery, so that the training system can respond to
the specific challenges that face training and business in the 21st
century.[3]
1.4
Government senators agree with DEST that the vocational
and technical education system makes a significant contribution to Australia's
economic success by providing businesses with highly skilled and productive
workers to enable them to be globally competitive.[4] Government senators believe that the new
system must deliver high quality outcomes and be flexible enough to respond
rapidly to new technologies and work practices and emerging economic and social
priorities. Some of the challenges facing the vocational and education system
include the increasing demand for skills development, the ageing population,
advances in technology and innovation and changing work and employment
patterns.
Purpose and objectives of the bill
1.5
The Skilling Australia's Workforce Bill 2005 provides
for a new funding framework for the provision of $4.4 billion to the states and
territories for vocational education and training (VET) for the period July
2005 to December 2008. This includes an additional $175 million compared to
2004 and an average real increase of 3.2 per cent on that year.[5] While the legislation before parliament will
replace the existing ANTA funding agreement, the new national training system
will build on the achievements of ANTA and will retain and strengthen key
elements of existing arrangements, such as a national approach and industry
leadership.[6] The Skilling Australia's
Workforce (Repeal and Transitional provisions) Bill 2005 will repeal the Australian National Training Authority Act
1992 and the Vocational Education and
Training Funding Act 1992. It will also provide transitional arrangements
for the transfer of functions and responsibilities from ANTA to DEST, including
arrangements for the transfer of assets, liabilities and custody of records to
the Commonwealth.[7]
1.6
Together, the bills are the most significant pieces of
legislation for vocational and technical education in more than a decade. They establish
a new national training system and put in place arrangements to ensure a high
quality, flexible and responsive system which will provide industry and
business with skilled people into the future. According to DEST, the new
national training system will '...provide more appropriate governance,
accountability and operational arrangements, which will focus on current and
future skills needs and will reinvigorate the leadership role of business and
industry'.[8]
1.7
The purpose of the new national training system is
stated clearly in the Skilling Australia's Workforce Bill. The bill will
provide for a new training system:
- to strengthen Australia's
economic base through providing a highly skilled workforce that will meet the
future needs of Australian businesses, industries, communities and individuals;
- to promote a national approach to the delivery of
vocational education and training through collaboration and cooperation between
the Commonwealth, the States and industry; and
- to support a national training system that:
- is responsive to the needs of industry and
employers and in which industry and employers drive the policies, priorities
and delivery of vocational education and training;
- ensures high quality and nationally consistent
vocational education and training, including through providing flexible and
accelerated training delivery; and
- operates through streamlined arrangements, is
simple to access, and encourages more Australians to prefer vocational
education and training options when making career choices.[9]
Key provisions of the bill
1.8
The legislation contains a number of statutory
conditions that the states must meet in order to receive their share of
Commonwealth funding for vocational education and training, three of which are
singled out in this majority report. These include maximising choice for
employers and new apprentices, workplace reforms for TAFE institutions and
competency-based training.
Maximising choice
1.9
Government senators believe that employers and
apprentices should be able to select the most suitable training provider for
their needs. The submission from DEST argues that the introduction of choice in
selecting a training provider and delivery method results in improvement in
training outcomes and increases flexibility for employers and employees. Government
senators believe that the user choice provision contained in the legislation is
designed to increase the flexibility and responsiveness of the user choice
policy which was agreed to by the states and the Commonwealth in 1997. Under
this provision, states will be required to take action to maximise choice for
employers and new apprentices. States will be required, for example, to
implement arrangements to introduce genuine competition in the education and
training sector and to ensure that employers and new apprentices have greater
choice and flexibility in relation to their VET provider and the method and
location of the training provided.[10]
Workplace reforms
1.10
An important and innovative feature of the bill is the requirement
for states to introduce a range of workplace reforms and new management practices
in TAFE institutions as a condition for the receipt Commonwealth funding.
Government senators strongly believe that the introduction of flexible and
responsive employment arrangements in TAFE's, including Australian Workplace
Agreements (AWAs) and performance pay, will improve their responsiveness to local
employer and industry needs.[11] It is
important to stress that the bill only requires that TAFE staff be offered an
AWA. As the DEST submission pointed out, the choice of individual or collective
arrangements will be a matter for each staff member. The principle supported by
the Government is that TAFE staff should be given the choice of working
arrangements. This choice should also be supported by a fair and transparent
performance management scheme in TAFE institutions that rewards high
performance and manages underperformance.[12]
Competency-based training
1.11
The legislation requires that states and territories
remove impediments in their awards to enable training qualifications to be
based on competence rather than on length of time. This new approach will offer
more flexible options for students and employers. According to DEST:
In the current arrangement many New Apprentices take up to four
years to complete (and in some cases, even longer) rather than having access to
accelerated and more relevant, competency-based pathways. Rigid time-based
approaches cannot meet the needs of employers of individuals in the rapidly
changing economy.[13]
Issues raised in evidence
1.12
Government senators note that the legislation is
supported by TAFE Directors Australia (TDA), the national peak body
representing TAFE institutes and TAFE divisions of multi-sector institutions,
and the Australian Council for Private Education and Training (ACPET).[14] While the TDA submission actively supported
the objectives of the bill as set in Clause 4, it noted that training providers
are not acknowledged as a key partner in the cooperative process between the
Commonwealth, the states and industry. It proposed an amendment to include
specific reference to training providers as a contributor to the cooperative
arrangements which will bring about a flexible, high quality training system as
set out in clauses 4(a) and 4 (c).[15]
Government senators agree with TDA that much of the inflexibility and non-responsiveness
for which ANTA arrangements were often criticised was due in no small part to
the absence of training providers from relevant consultation and decision
making processes. However, Government senators do not believe that the absence
of any specific mention of training providers at Clause 4 (b) will diminish their
future role under the new arrangements.
1.13
Submissions from both TDA and ACPET supported, with a
few minor reservations, the statutory conditions as set out in the bill. They supported
user choice policy in respect of new apprentices who represent approximately 20
per cent of total TAFE enrolments. They also supported the view that the
workplace reforms will improve the flexibility and responsiveness of TAFE to
local industry and community needs. The TDA submission fully supported the
bill's requirements for a competence-based training approach rather than one
based on length of time. Government senators appreciate TDA's concern that the
provisions of the bill will require careful interpretation and implementation
if its intent is to be successfully realised within the three year funding
period.[16] The ACPET submission
strongly supported the provision relating to the increased utilisation of
publicly funded training infrastructure:
ACPET is strongly supportive of this condition of grant in the
legislation. Third party access increases the use of taxpayer funded facilities
and maximises the return on this publicly funded capital investment. Private
providers are often small and, whilst highly experienced in training and better
suited to meet the specialist training needs of employers and employees, it is
simply impossible to duplicate the expensive infrastructure in the TAFE system.[17]
1.14
Criticism of the legislation by unions focused, not
surprisingly, on the Government's determination to introduce necessary
workplace reforms to the VET sector. Submissions from the ACTU and several
other unions accused the Government of being 'authoritarian' by taking away the
rights of the states and driven by an 'ideological obsession' to have
individual contracts as the primary form of regulation of employment.[18] Rhetorical grand standing of this kind
is misleading and shows that unions are not serious about a high quality,
flexible and responsive vocational education and training system which this
legislation provides for. Government senators reject the proposition that its
legislation erodes states' rights or forces workers to sign individual
contracts. The Government is committed to principles of collaboration with the
states and territories and providing workers with a choice of individual or
collective working arrangements.
1.15
Government senators also reject the criticism by unions
that its proposed funding package for the new national training system is
inadequate and that it reflects a lack of vision by government in investing in
the future.[19] This ignores the fact
that the Australian Government's investment in training is currently at record
levels. The Government has committed $2.1 billion in 2005 to vocational education
and training with a further $4.4 billion in new funding for VET to be
appropriated under this new legislation. The Government has called on the
states and territories to match the additional funding provided by the
Commonwealth in 2005. As Minister Hardgrave
stated in his second reading speech to the bill:
This government's strong commitment to vocational and technical
education is illustrated by the significant funding of $4.4 billion provided
through this bill and a further $1.4 billion over four years announced last
year for an integrated and comprehensive suite of policies to reinforce
nation-building skills needs. This lifts the Australian Government contribution
to vocational and technical education to a record 10.1 billion over the next
four years. These initiatives represent one of the most significant boosts to
vocational and technical education ever undertaken by any Australian
Government.[20]
New national training arrangements
1.16
The 'directions paper' for vocational education and
training published by DEST in February 2005 identified two elements which laid
the foundation for a successful training system: national collaboration and
industry engagement.[21] According to
DEST, these elements underpin two key components of the new national training
system: a national governance and accountability framework and a national
skills framework. Added to these components will be business and industry
leadership and engagement operating at all levels of training.
1.17
The national governance and accountability framework establishes
decision making processes and bodies responsible for training. Of note is the
Ministerial Council for Vocational Educational and Training and the National
Senior Officials Committee. The Ministerial Council replaces the ANTA
Ministerial Council and has responsibility for the operation of the national
training system, including setting national priorities and standards, planning
for the operation of the national system and monitoring and accountability roles.
The National Senior Officials Committee is the administrative arm of the Ministerial
Council, performing such roles as establishing work plans for the Council,
coordinating the preparation of proposals and ensuring that Council decisions
are executed. According to DEST, a focus on
performance and governance is vital to ensure that the national training system
remains high quality and responsive. Also included in the accountability
framework are bilateral funding agreements between the Australian Government
and the states.
1.18
The national skills framework is the second component
of the new training system, setting out the requirements for quality and
national consistency of qualifications and the delivery of training. Government
senators believe that the new training system should include strong quality
assurance mechanisms to ensure consistency and high quality training across a
range of different learning environments. Not only will this provide
opportunities for Australian employers and students; it will also enhance Australia's
reputation overseas and increase its share of the international training
market. The new framework will see a continuing role for the Skills Councils,
the establishment of a new Ministerial-owned company to manage training
materials and products, the amalgamation of the National VET Quality Agency and
the National Skills Agency, and public reporting of the performance of
Registered Training Organisations.[22]
Conclusion and recommendation
1.19
The Australian Government is committed to building Australia's
skills. Legislation before the parliament is intended to establish a new
streamlined and high quality national training system. While the Skilling
Australia's Workforce Bill 2005 and a related bill retain successful elements
of the existing arrangements, their effectiveness will be enhanced through a
range of new measures, including a new national governance and accountability
framework and a new national skills framework. Together, the bills are the most
significant pieces of legislation for vocational and technical education in more
than a decade, representing one of the most significant boosts to vocational
and technical education ever undertaken by any Australian Government.
1.20
The committee majority commends these bills to the
Senate and recommends their passage without amendment.
Senator Judith Troeth
Chair
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