Bills Digest No. 93, 2016–17
PDF version [524KB]
Carol Ey
Social Policy Section
4 May 2017
Contents
Purpose of the Bills
Background
Committee consideration
Policy position of non-government
parties/independents
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
National Vocational Education and
Training Regulator Amendment (Annual Registration Charge) Bill 2017
National Vocational Education and
Training Regulator (Charges) Amendment (Annual Registration Charge) Bill 2017
Concluding comments
Date introduced: 30
March 2017
House: House of
Representatives
Portfolio: Education
and Training
Commencement: 1
July 2017
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page for the National
Vocational Education and Training Regulator Amendment (Annual Registration
Charge) Bill 2017 and for the National
Vocational Education and Training Regulator (Charges) Amendment (Annual
Registration Charge) Bill 2017, 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 May 2017.
Purpose of
the Bills
The purpose of the National Vocational Education and
Training Regulator Amendment (Annual Registration Charge) Bill 2017 (the main
Bill) is to amend the National Vocational
Education and Training Regulator Act 2011 (the Act) and the National Vocational
Education and Training Regulator (Transitional Provisions) Act 2011 to ensure
that the annual registration charges collected by the National Vocational
Education and Training (VET) Regulator are underpinned by appropriate
legislative authority.
The National Vocational Education and Training Regulator
(Charges) Amendment (Annual Registration Charge) Bill 2017 (the Charge Bill)
contains consequential amendments to the National Vocational
Education and Training Regulator (Charges) Act 2012 (the Charges
Act).
Background
The National VET Regulator, the Australian Skills Quality
Authority (ASQA), was established in 2011.[1]
It is responsible for the regulation of:
- vocational education and training providers
- accredited vocational education and training courses and
- the Commonwealth Register of Institutions and Courses for Overseas
Students (CRICOS) providers including those delivering English Language
Intensive Courses to Overseas Students (ELICOS).[2]
ASQA was established on the basis of moving to a full cost
recovery operation and it therefore charges fees for its services.[3]
The Act currently allows the Minister, by legislative instrument, to determine
the quantum of the fees that ASQA may charge for goods or services it provides
in performing its functions (section 232). These fees include a fee on applying
to become a registered training organisation (RTO) (section 16), a registration
assessment fee (section 17) and a registration fee (section 18).[4]
As the Act is founded on a referral of power by the states to the Commonwealth
(section 5), the Minister is required to obtain the approval of the Council of
Australian Governments (COAG) Industry and Skills Council (subsection 232(2))
before making a determination. The Council is comprised of Commonwealth, state
and territory ministers with responsibility for the vocational education and
training (VET) sector.[5]
The Explanatory Memorandum to the main Bill states that ASQA
has recently reviewed its cost recovery arrangements to ensure consistency with
the Australian Government Charging Framework (AGCF).[6]
The AGCF distinguishes between two broad types of cost recovery arrangement—cost
recovery fees and cost recovery levies.[7]
Cost recovery fees are a charge for a good or service provided to a specific
individual or organisation (for example, a fee that is payable when an
organisation or individual applies for registration).[8]
In contrast, cost recovery levies:
... are a charge imposed when a good, service or regulation is
provided to a group of individuals or organisations rather than to a specific
individual or organisation. A cost recovery levy is a tax and is imposed via a
separate taxation Act. It differs from general taxation as it is ‘earmarked’ to
fund activities provided to the group that pays the levy.[9]
As set out in the Explanatory Memorandum to the main Bill,
since its establishment in 2011, ASQA ‘has shifted its regulatory approach to
include activities, such as intelligence collection and data analysis, to
inform targeted monitoring, compliance and enforcement activities’.[10]
These broader functions are not easily tied to the provision by ASQA of a good
or service to a specific individual or organisation. Instead, they provide a
benefit to the VET sector as a whole.[11]
As a result, questions have arisen as to the appropriateness of using cost
recovery fees to fund these broader activities and a risk identified that
‘annual registration fees may now be characterised as a tax and need to be
collected under separate tax legislation’.[12]
To address this risk, the main Bill changes one of the fees currently imposed
by the Act—the registration fee referred to in section 18—into an ‘annual
registration charge’. To comply with section 55 of the Constitution,
which requires that any law dealing with taxation cannot include other matters
and must deal with one subject of taxation only, the charge is imposed as a tax
by the Charge Bill, through amendments to the Charges Act.[13]
Committee
consideration
At the time of writing the Bills had not been referred to
any Committees for further consideration.[14]
Policy
position of non-government parties/independents
The measures in these Bills are essentially technical and
have not attracted any comment from the non-government parties or the independents.
Neither do there appear to be any comments from stakeholders.
Financial
implications
There are no financial implications from these Bills.
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
Bills’ 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 Bills are compatible.[15]
At the time of writing, the Parliamentary Joint Committee on Human Rights had
not reported on the Bills.
Key issues
and provisions
National
Vocational Education and Training Regulator Amendment (Annual Registration
Charge) Bill 2017
As explained above, the Act allows ASQA to charge fees for
the provision of specified goods and services. The quantum of these fees is set
by the Minister in a legislative instrument made under section 232 of the Act,
after gaining the approval of the relevant COAG Ministerial Council. One of the
fees specified in the Act is the registration fee under section 18, which is
payable when ASQA decides to register an organisation as an RTO.
Item 1 of Schedule 1 of the main Bill amends
section 18 of the Act so that rather than referring to ‘a registration fee’ it
will refer to ‘a National VET Regulator annual registration charge’ payable
under proposed section 232A for each financial year of registration.
Item 3 inserts new sections 232A and 232B.
Proposed subsection 232A(1) describes who is liable to pay the
annual registration charge. It provides that the charge is payable by RTOs and certain
providers of education services to overseas students, registered under the Education Services
for Overseas Students Act 2000. Proposed subsection 232A(2) specifies
that the charge is imposed by Part 1A of the Charges Act, to be inserted
by item 2 of the Charges Bill (see below). As is the case with the current
registration fee, the annual registration charge may be payable by instalments
(proposed subsection 232A(3)). The charge is payable on a pro-rata basis
if an organisation is not registered for the entire financial year (proposed
subsection 232A(4)).
Proposed subsection 232A(5) provides that the
section also applies in relation to a charge taken to have been imposed under
section 6C of the Charges Act, which is to be inserted by item 2 of the
Charges Bill and is discussed below.
Proposed section 232B specifies that the annual
registration charge is recoverable as a debt due to the Commonwealth.
Section 39 of the Act allows ASQA to cancel an RTO’s
registration in any circumstances that it considers appropriate, including if
the registration fee under section 18 has not been paid. Item 2 will
amend section 39 to remove the reference to the registration fee and instead
specify that appropriate circumstances for cancelling an RTO’s registration may
include (but are not limited to) a failure to pay the annual registration
charge by the due date.
Item 4 inserts a new Schedule at the end of the National Vocational
Education and Training Regulator (Transitional Provisions) Act 2011 to provide
savings arrangements for registration cancellation based on failure to pay an existing
registration fee once the Bill is enacted. As explained above, section 39
currently specifies that it may be appropriate for ASQA to cancel registration
if an organisation has failed to pay a registration fee. Section 39 will be amended
by item 2 of the Bill to replace the reference to registration fee with a reference
to the new annual registration charge.
As set out in the ‘Background’ section of this Digest,
questions have arisen as to the validity of the current registration fee, given
that it has been used to provide services to the VET sector as a whole, rather
than a specific individual or organisation. Item 4 ensures that section
39 as in force immediately before the amendments made by the Bill commence,
continues to apply in relation to a failure to pay the registration fee, even
if the fee was not capable of being validly determined by the Minister under
section 232 of the Act. This ensures that any cancellation of registration by
ASQA on the basis of failure to pay a registration fee will be valid, even if
the determination of that fee may have been invalid. The Charges Bill includes
provisions that retrospectively validate the imposition of the registration fee
and is discussed in more detail below.
National
Vocational Education and Training Regulator (Charges) Amendment (Annual
Registration Charge) Bill 2017
Item 1 of the National Vocational Education and
Training Regulator (Charges) Amendment (Annual Registration Charge) Bill 2017 (the
Charges Bill) changes the long title of the National Vocational
Education and Training Regulator (Charges) Act 2012 (the Charges Act)
to remove the current reference to the imposition of charges under the National
Vocational Education and Training Regulator Act 2011 and instead to refer
to charges ‘in relation to certain functions of the National VET Regulator’.
This is necessary as (as explained above) the annual registration charge will also
apply to providers registered under the Education Services for Overseas
Students Act 2000.
Item 2 inserts a new Part 1A into the Charges
Act, which consists of proposed sections 6A to 6C. Proposed section 6A
imposes the annual registration charge determined under proposed section 6B, as
a tax. Proposed section 6B allows the Minister to determine a National
VET Regulator annual registration charge for a financial year, by legislative
instrument. As is the case with fees imposed under the Act, the Minister must
have the COAG Ministerial Council’s approval to the amount of the charge.
As with item 4 of the main Bill, proposed section 6C
responds to concerns that the current registration fee may not be valid. Proposed
subsection 6C(1) specifies that the section applies to each amount of registration
fee that a person was required to pay under the Act, before the commencement of
the Bills, to the extent that the fee could not be validly determined under
section 232 of that Act (for the reasons discussed in the Background section of
this Digest). Proposed subsection 6C(2) imposes (as a tax) a charge
equal to the invalid fee. Proposed subsection 6C(3) ensures that a person’s
liability under subsection 6C(2) is reduced by any fees already paid and any
amounts that ASQA has waived.
In effect, section 6C retrospectively validates
registration fees that may not have been validly imposed. The Explanatory
Memorandum describes section 6C as ‘a proactive legislative measure to mitigate
legal and constitutional risk’.[16]
The Senate Standing Committee for the Scrutiny of Bills has previously
commented on legislation that sought to retrospectively validate fees and charges:
It is a fundamental principle that no pecuniary burden can be
imposed upon individuals without clear and distinct legal authority.
Retrospective validation of the imposition of fees and charges undermines this principle. In cases
where this approach is proposed in a Bill the explanatory memorandum should
provide a detailed explanation as to why it is considered necessary to
retrospectively validate fees that may have been invalid at the time they were
levied. [17]
Concluding comments
These Bills are described as largely mechanical and are
designed to ensure that the cost recovery arrangements for ASQA are consistent
with the Australian Government Charging Framework, and that they are
constitutionally supported. The Bills retrospectively validate registration
fees that may not have been validly imposed, and registration cancellations
made in reliance on non-payment of such fees.
[1]. For
more information on the establishment of the Australian
Skills Quality Authority (ASQA), see C Kempner, National
Vocational Education and Training Regulator Bill 2010 [and] National Vocational
Education and Training Regulator (Transitional Provisions) Bill 2010, Bills
digest, 61–2, 2010–11, Parliamentary Library, Canberra, 9 February 2011.
[2]. Australian Skills Quality
Authority (ASQA), ‘Agency overview’, ASQA website.
[3]. ASQA,
‘Fees and charges’,
ASQA website.
[4]. The
relevant legislative instruments are Australian Skills
Quality Authority instrument fixing fees No. 1 of 2011 and the Australian Skills
Quality Authority Instrument Fixing Fees No. 1 of 2013.
[5]. Department
of Industry, Innovation and Science (DIIS), ‘Council
of Australian Governments (COAG) industry and skills council’, DIIS website.
[6]. Explanatory
Memorandum, National Vocational Education and Training Regulator Amendment
(Annual Registration Charge) Bill 2017, p. 2; Department of Finance (DoF),
‘Australian
Government charging framework’, DoF website.
[7]. DoF,
Australian
Government Charging Framework, Resource Management Guide, 302,
DoF, Canberra, 2015, p. 6.
[8]. Ibid.,
p. 12.
[9]. Ibid.,
p. 12.
[10]. Explanatory
Memorandum, National Vocational Education and Training Regulator Amendment
(Annual Registration Charge) Bill 2017, p. 2.
[11]. K
Andrews, ‘Second
reading speech: National Vocational Education and Training Regulator Amendment
(Annual Registration Charge) Bill 2017’, House of Representatives, Debates,
30 March 2017, p. 3806.
[12]. Explanatory
Memorandum, National Vocational Education and Training Regulator Amendment
(Annual Registration Charge) Bill 2017, p. 3.
[13]. Constitution,
section 55.
[14]. Senate
Standing Committee for Selection of Bills, Report,
4, 2017, 30 March 2017, p. 4.
[15]. The
Statements of Compatibility with Human Rights can be found at pages 5–7 of the Explanatory
Memorandum to the National Vocational Education and Training Regulator
Amendment (Annual Registration Charge) Bill 2017 and at pages 5–6 of the Explanatory
Memorandum to the National Vocational Education and Training Regulator
(Charges) Amendment (Annual Registration Charge) Bill 2017.
[16]. Explanatory
Memorandum to the National Vocational Education and Training Regulator
(Charges) Amendment (Annual Registration Charge) Bill 2017, p. 11.
[17]. Senate
Standing Committee for the Scrutiny of Bills, Report,
5, 2014, The Senate, Canberra, 14 May 2014, pp. 227–228.
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