Estimates: Vocational Education

Economics Legislation Committee

Estimates hearings, 15 February 2012

Department of Industry, Innovation, Science, Research and Tertiary Education

• Senator Chris Evans, Minister for Tertiary Education, Skills, Science and Research; Leader of the Government in the Senate
• Ms Maryann Quagliata, General Manager, Tertiary Quality Governance Branch
• Mr Robert Griew, Associate Secretary

Full transcript available here

Senator RHIANNON:  Will states and territories be required to open up their funds to private providers as a condition of the next national agreement for skills and workforce development and national partnership as part of your plans to reform the VET system?

Senator Chris Evans: The negotiations with the states regarding the next national partnership and national agreement on skills are underway currently. I think the next COAG meeting where they will be considered is early in April. Obviously the new agreements are due to come into force on 1 July as the others expire. The Prime Minister has made it clear what her priorities for reform are in that respect. But perhaps I might ask Mr Griew, who is leading for the department in this area, to give you a more detailed response.

Senator RHIANNON: Will there be a release of the terms that are being proposed for the next national agreement before it is actually finalised?

Mr Griew: The first question you asked was about whether the new agreement will change matters to require contestability in the training market. Of course, that is not a new phenomenon. For a long period there has been some degree of competition for various kinds of funding in training. The government has made it clear in the negotiating position with the states that this is recognised. The minister is on record saying that some degree of competition can make the training system more responsive, but that it is very important—and this has been put strongly to the states—that the investment that has been made over time in the public provider is acknowledged, that the specific role of the public provider in regional areas in the traditional trade and in capital intensive training is recognised, and that the way in which states—and I stress that it is states that do this under our system—introduce any change in their systems do not lead to a diminution of the value of the public provider to our overall training system.

Senator RHIANNON: In terms of how these negotiations are being driven, and considering you mentioned that in recent times it has been required that there be some degree of competition, can we assume as part of the negotiations states are being urged to have a greater degree of competition?

Mr Griew: It is not part of the negotiating position that we are urging states to engage in more competition. The primary drivers in the negotiation with the states are about widening access, reinforcing quality, ensuring a greater transparency in the system, making training an entitlement for people who need to either get training to enter the workforce, to upskill within the workforce, and within parameters that are subject to the negotiation. That is what the negotiation is about.

Senator RHIANNON: You just mentioned greater transparency in the system. Does that mean there will be some arrangements for consulting, say, students, teachers, institutions and the wider public before the new national agreement is locked in?

Senator Chris Evans: This is obviously a negotiation with the states, so there is some sense of confidentiality although the Commonwealth has made its objectives very clear both through the Prime Minister, me and through Mr Griew. But I can say that I was concerned about the lack of transparency about these processes in the past, particularly the lack of engagement with key stakeholders in these things. The public service or the Commonwealth and the states meet in what used to be smoke-filled rooms—of course, they are now smoke-free rooms—and batter out a deal and they all come out and claim victory either for the Commonwealth or the states without much input from others.

I have engaged with industry, as has the department, including people like TAFE directors and the TAFE unions, to have a few roundtables to try to engage people as we develop our position, which is not to say they will be at the final negotiation. But as Mr Griew can outline, we have had a range of engagements to try to make sure that whatever the final negotiated agreements are it actually meets industry’s needs and protects the vital public investment in things like the TAFE system, which I am very keen to preserve, because I always acknowledge the fact that the TAFEs provide means of access for rural and regional students, low socioeconomic students, women and migrants in a way that many others do not. They also provide access for capital intensive courses and they are a bedrock of our vocational education system. I want to make it very clear that this government is not at all interested in downgrading or reducing the role of the TAFE system, but we are keen to make sure that we make improvements in the training system if we are going to meet the needs of our emerging economy and make sure we have enough skilled people. Quite frankly, there is need for a reform agenda, and we will be pursuing that.

Senator RHIANNON: You mentioned that there have been meetings with some of the groups involved. Could you provide details of those meetings and who attended?

Senator Chris Evans: We can give you some of them. Obviously, my office is constantly in touch with a range of groups as well in a more informal sense. Did we formally call them roundtables?

Mr Griew: The minister convened a roundtable, which had not individual sectors but all of them together—all the ones he just mentioned—and we have backed that up with that group again a couple of times. Skills Australia convened a very large meeting of industry stakeholders and senior officers from states and ourselves have held meetings in most capital cities now with regional—

Senator RHIANNON: Was that particularly about the agreement?

Mr Griew: Yes.

Senator RHIANNON: Minister, as there have been a number of negative reports about private providers and given the massive increases in competitive tendering and in government funding going to the private providers, can you explain what additional quality checks have been put in place to ensure that Australian students are protected when providers fail to provide quality education? I am after the additional quality checks, not what you already have in place.

Senator Chris Evans: Part of the answer is that, firstly, no-one would say I am a friend of dodgy providers after my role in immigration and trying to drive them out of the international student market. I am concerned that some of them, particularly in Victoria, have moved into the competitive model that has emerged in Victoria. I have raised my concerns about some of those developments. The Commonwealth set up a new national regulator to deal with these issues, ASQA, and they appear in about 15 minutes time. They will certainly be best placed to take you through the quality measures that they have in place and the means to regulate an industry. But the department might be able to give you a few—

Mr Griew: Ms Quagliata, who has just joined us at the table, has policy responsibility for the process that led to the ASQA establishment but also for quality initiatives that have been quite significant. So perhaps a very quick summary would answer your question.

Senator RHIANNON: Thank you.

Ms Quagliata: In addition to the establishment of ASQA there was the establishment of a new National Standard Skills Council, which is responsible for reviewing, developing and advising the ministerial council on the standards that ASQA will enforce. As well, in July 2010, there was an improvement to the national standards themselves, the AQTF, which was then reflected in the national standards that ASQA enforces. They included the introduction of fit and proper person tests, requirements in relation to financial viability, requirements in relation to the security of student funds that are paid in advance. There was also the strengthening of the Australian qualifications framework, which came into place last year. They now have very specific and thorough specifications on what each qualification type should have in terms of students’ skills, knowledge and capacity in the workplace, and they now be implemented over the next couple of years.

Senator RHIANNON: Do you also look at the number of courses that will be provided in certain areas? I am referring to some of the situations that have occurred in Victoria where there is a proliferation of courses where clearly providers think there is quick money to be made? Or are you just looking at standards within courses?

Mr Griew: I think it is important to distinguish here between the setting of the standards for course delivery and control of the quantity of students that enrol in particular courses. Again, the minister has been on record expressing some concern himself about the proliferation of some particular courses. There is an issue which beyond that, though, does fall more in the regulatory domain, which goes to: what is the worth of those courses? With other state governments through the standards council we are actively looking at what are the appropriate standards around the nature of course offerings. How many days; what kind of intensity; the nature of scrutiny of the skills that people have coming out the other end of courses are issues that we are actively discussing with state governments at the moment. I think it is important that we distinguish what the regulatory levers are and what state government funding arrangements might produce. But we are on the record expressing some of the same kinds of issues you are raising here with those governments.

Senator RHIANNON: Minister, in an earlier statement you said you were not into downgrading the TAFE system. Therefore, I was interested in what your response is considering the considerable decrease in federal government funding? Recent reports show that the government recurrent expenditure per hour of training declined by 15.4 per cent between 2004 and 2009. Then we have the longer trend that has seen funding per hour decline by about 25.7 per cent from 1997. That is a colossal decrease in money—

Senator Chris Evans: It is also not true.

Senator RHIANNON: Why do you dispute those figures? They come from—

Senator Chris Evans: Because the first one is a figure plucked to try to look at training hours and the second one sounded not true, but I am happy for Mr Griew to take you through the record investment we made in vocational education and training.

Senator RHIANNON: That is the report on government services 2011 from the Productivity Commission.

Senator Chris Evans: I do not know which bit, but we have made huge investments through the current national partnership on vocational education and training—I think increasing by almost a third. We have also made huge capital investments in vocational education and training, including in the TAFEs, as a result of one of the stimulus measures taken in response to the global financial crisis.

Senator RHIANNON: I think we had this argument last time as to this issue of figures. The one I am talking about is Skills Australia’s Skills for Prosperity: A Roadmap to VET 2011 on page 150, where Skills Australia acknowledged that with the substantial decline in public funding per hour of training in several states it is apparent that real funding is not being maintained.

Senator Chris Evans: But that does not say the Commonwealth funding has been reduced, which was your starting point.

Senator RHIANNON: Yes, but—

Senator Chris Evans: That is what I am saying. The claims you make are not backed by the things you quote, and they are false. If you want the real information I am happy to provide it. But I think you should not repeat those claims, because they are not true.

Senator RHIANNON: I am to have it provided, but the federal government is decreasing its involvement in TAFE.

Senator Chris Evans: No, that is not true.

Senator RHIANNON: We will come back to that, but I would be interested to hear—

Senator Chris Evans: I would ask Mr Griew to give you the answer to that.

Mr Griew: There is a number of different measures that get thrown around here. It is significant that the actual number of hours of delivery delivered through TAFE has grown year on year, including of course therefore the Commonwealth’s share of that funding, including through the period when the private sector has had a kick up in share. Still the number of actual hours delivered through the TAFE system has increased. The figures I think you are quoting come from the report on government services, which the Productivity Commission puts out and which has an attempt to calculate total government spending allocated by state governments broken down on a per hour basis of training. When calculated that way, they show a gradual reduction in the cost per hour that the states then fund across the system. That is not a decline in TAFE share or total number of hours or Commonwealth funding to TAFEs. It would be incorrect to represent it that way.

It is important to understand, of course, that is a very ambitious calculation, because it is an aggregate figure that is also influenced heavily by the mix of qualifications and sectors. Yes, it is a figure that is out there from the Productivity Commission, but it is a very ambitious figure and you could not conclude from that Commonwealth investment in TAFE or total government in TAFE has fallen. The figure the minister is referring to there, if you actually take the Commonwealth government’s investment in VET totally over 2008 to 2011, including capital that is $11.1 billion. If you compare that to the three years previous that is a significant step up from the $7.4 billion that was invested in the three years previous.

Senator RHIANNON: I would like to go on to a specific example to understand again this funding issue. I was just referring here to one of these recent developments in Victoria that involved a private provider offering a certificate IV in outdoor recreation. We saw it play out that the qualification attracts funding for anywhere between 700 to 1,100 hours of delivery, but I understand that in fact it was just about 27 hours over which the course had to run. Can the minister let the committee know what proportion of this funding was federal, how long this provider had been operating and offering these qualifications and how much federal funding was expended by this private provider in this exercise?

Senator Chris Evans: I will see whether the officers can help in a broad sense, but I will make a couple of points first. There was serious concern about the sorts of courses you refer to, and I have made it clear publicly that I was very concerned about that. But it is also the case that the Victorian government has not referred its powers to the national regulator ASQA for the regulation of vocational education and training. There are two states that have not referred their powers, Western Australia and Victoria. Our regulatory role there is limited to international students and where they operate interstate. There are serious concerns about those developments in Victoria. I think the Victorian government has made some attempt now to deal with that. I am not sure whether that is comprehensive enough. I am not sure whether the officers can help you given the specific nature of your reference.

Mr Griew: It would be useful to probably get the details of the case, which we do not—

Senator RHIANNON: It is a vocational training group. I understood that it had a fair bit of publicity. That is why I was hoping you might have had it here.

Mr Griew: We do not have a brief on that particular case. There are a number of cases in Victoria that have gotten a considerable amount of publicity, and I have referred to the issues that we raised with the Victorian government which, to be fair to the officials we deal with there, is concerned about some of those issues as well. Some of the issues are actively in discussion with the states about the nature of what the minimum requirements should be. This is a skills competency based system so we do not necessarily want to go back to a curriculum input sort of model for it, but there are some minimal amounts of, for example, class contact hours or teaching contact hours that might be reasonable. Those sorts of discussions are actively underway. We are in the middle of a negotiation with the states, and I think it is unfair to go into the exact detail of those discussions, but they are active discussions and those are very much the sorts of issues that we are taking up. Perhaps we could get the details of the case that you have in front of you and then we could provide an answer on notice about the particular case.

Senator RHIANNON: Thank you. I will give those to you. I was after the amount of federal funding.

CHAIR: Our time for this session has expired. We now need to turn to the Tertiary Education Quality and Standards Agency, TEQSA, if those officers could come forward.